• Net Gaming Revenue: EUR 53 million in Q4 2024, a 5% increase from Q4 2023.
• Constant Currency Net Gaming Revenue: EUR 57 million, a 15% increase from the prior year period.
• Spanish Business Revenue: EUR 23 million, a 10% increase from the prior year.
• Mexican Business Revenue: EUR 25 million, flat compared to the prior year.
• Adjusted EBITDA: Positive EUR 1.9 million in Q4 2024.
• Full Year Adjusted EBITDA: EUR 6.4 million for 2024.
• Average Monthly Active Customers: 6% increase in Q4 2024.
• Average Monthly Spend per Active Customer: Approximately EUR 120.
• First-Time Depositors (FTDs): 71,000 in Q4 2024, a sequential increase from 67,000 in Q3 2024.
• Average Cost Per Acquisition (CPA): EUR 211, the lowest since Q4 2023.
• Total Cash on Balance Sheet: EUR 40 million as of December 31, 2024.
• Net Working Capital Position: Negative EUR 17.5 million.
• 2025 Net Gaming Revenue Outlook: EUR 220 million to EUR 230 million.
• 2025 Adjusted EBITDA Outlook: EUR 10 million to EUR 15 million.

• Warning! GuruFocus has detected 7 Warning Signs with CDRO.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Codere Online Luxembourg SA (NASDAQ:CDRO) reported a 5% increase in net gaming revenue for Q4 2024, reaching EUR 53 million.
• The company's Spanish business saw a 10% revenue growth, contributing significantly to the overall performance.
• Adjusted EBITDA was positive at EUR 1.9 million for the fourth quarter, marking consistent profitability throughout 2024.
• The company experienced a 6% increase in average monthly active customers, indicating strong customer retention and engagement.
• A share buyback plan of up to EUR 5 million was approved, reflecting confidence in the company's financial position and future prospects.

Negative Points

• The Mexican Peso's devaluation by 14% negatively impacted net gaming revenue, which would have been 15% higher on a constant currency basis.
• The company faces challenges from a new tax on deposits in Colombia, which could affect future investments in the region.
• Despite a 6% increase in active customers, first-time depositors (FTDs) dropped by 10% compared to the previous year.
• The competitive landscape in Mexico remains challenging, with a lower sports betting margin impacting revenue.
• The company's guidance for 2025 reflects a conservative outlook due to potential headwinds, including currency fluctuations and regulatory changes.

Q & A Highlights

Q: Can you share the Mexican peso assumption embedded in the 2025 guidance and the implied constant currency growth relative to the 6% reported guidance? A: We don't have the specific FX forecast numbers at hand, but we can provide them after the call. The guidance reflects the impact of currency fluctuations, particularly the Mexican peso. Oscar Iglesias, CFO

Q: The implied flow-through to EBITDA is about 46%, similar to 2024. Is this due to conservatism around user acquisition investments or other factors? A: The guidance reflects potential marketing investments around events like the Club World Cup, where we sponsor teams. Additionally, the new tax on deposits in Colombia is a factor, though Colombia is a small part of our business. Oscar Iglesias, CFO

Q: Can you explain the decrease in CPA to EUR 211 during the quarter despite competitive pressures? A: In Mexico, some competitors reduced their investment, and we resolved technical issues improving our marketing efficiency. This led to a decrease in CPA. Aviv Sher, CEO

Q: Have competitors shifted focus to Brazil, affecting competition in Mexico? A: Some European competitors in Mexico have not succeeded as expected and may have shifted focus. However, we anticipate competition will return with the upcoming World Cup. Aviv Sher, CEO

Q: Are there growth investments planned outside of Mexico in 2025? A: While Brazil is a significant opportunity, we are cautious due to high marketing budgets required. Our focus remains on maximizing ROI in core markets like Mexico and Spain. Aviv Sher, CEO

Q: What is the status of your operations in Argentina? A: We face challenges entering the province of Buenos Aires, which limits our growth. We continue to seek opportunities for a provincial license. Aviv Sher, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.