管理層發言
Thank you for standing by, and welcome to the Codere Online First Quarter 2025 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I'd now like to turn the call over to Guillermo Lancha, Head of Investor Relations. You may begin.
Thanks, operator, and welcome everyone to Codere Online's earnings call for the first quarter of 2025. Today, you will hear from our CEO, Aviv Sher, and CFO, Oscar Iglesias. Our Executive Vice Chairman, Moshe Edree, will also join us in the Q&A section. Before turning the call over to Aviv, I'd like to remind everyone that during this call, we will be referring to a presentation we uploaded to our website earlier today, which includes non-IFRS preliminary and unaudited financial metrics, such as net gaming revenue, adjusted EBITDA, and constant currency figures, for which you can find reconciliations or disclaimers in the appendix of the presentation. These non-IFRS financial measures should be considered in addition to and not as a substitute for our IFRS results. Please note that all growth rates discussed during this call are year-on-year comparisons unless noted otherwise. Let me also remind you that our accounting information is prepared under IFRS accounting standards and that throughout this presentation, all monetary figures will be in Euro unless expressed otherwise.
During this call, we will make forward-looking statements, including those related to our net gaming revenue and adjusted EBITDA outlooks, which are subject to numerous risks and uncertainties, including those discussed in our earnings press release and other documents filed with the SEC, and which could cause actual results to differ materially from those anticipated by these statements. These forward-looking statements reflect our current expectations based on our beliefs, assumptions, and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call. Finally, please note that a replay and transcript of this call will be available on our website at codereonline.com, where you can also sign up for our investor email alerts. With that, I will go ahead and pass the call on to Aviv.
Thanks, Guillermo, and thanks, everyone, for joining us today. Before we dive into first quarter earnings, let me please provide a quick update on where we stand in regards to our Nasdaq compliance issue. So, first and foremost, we filed our 2023 annual report on Form 20-F on May 1. That is within the extended deadline granted to us by Nasdaq, and thereby, we regained compliance with applicable listing requirements. This was formally confirmed in a letter we received yesterday from Nasdaq. As you know, since engaging MaloneBailey as our new auditor on December 31, we have been working on both our 2023 and 2024 audits in parallel, but in the back half of April, we decided to focus most of our efforts on completing the 2023 audit to ensure that we meet Nasdaq's deadline for filing our 2023 annual report, which was both the source of our compliance issue and, as you would expect, our top priority.
As a consequence, however, we have not yet been able to complete the work on the 2024 audit. And as a result, we are not able to file our 2024 annual report by May 15, which is within the 15-day grace period provided. Unlike last year, however, in which Nasdaq first issued a delinquency notice and provided us with the time to submit a plan to regain compliance, and given that we are currently under a one-year mandatory monitoring period, we understand that Nasdaq will be sending us a new delisting notice over the coming days. Certainly, following receipt of that delisting notice, we will be appealing this new delisting determination and requesting both a new hearing panel and further stay of any trading suspension. That said, and as already disclosed to the market, we expect to file our 2024 annual report by the end of May. So, we would expect to regain compliance with Nasdaq listing requirements ahead of any hearing actually taking place.
In short, while we may still have a couple of noisy weeks ahead of us, given the communication we are required to make to the market, we expect to finally be putting this issue behind us soon. As always, we appreciate the patience and understanding that all of you have shown us throughout this process and look forward to getting back to business as usual. Moving now to the highlights of the first quarter of 2025 on Page 8. We delivered €57 million in net gaming revenue, 8% above Q1 2024. As in prior two quarters, net gaming revenue was negatively impacted by a weaker Mexican peso. In constant currency terms, net gaming revenue would have been €62 million in the first quarter, 17% above the prior-year period. In terms of product mix, the contribution from our casino segment came in at 61% of our total net gaming revenue in the first quarter due to not only the focus we have placed on this segment in recent years but also a lower sports margin in Mexico.
This growth in net gaming revenue was driven by a 13% increase in the number of average monthly active users, while the average monthly spend per active customer dropped 5% to €118. In regards to customer acquisition, we had a very strong quarter with 91,000 first-time depositors, 21% above the 75,000 acquired in the prior-year period and 25% higher than in Q4 2024. This increase resulted in an average CPA in the quarter of approximately €200, making it two consecutive quarters of moderation in our CPA level, which are back to the levels we had in 2023. Finally, as announced last quarter, we put in place a one-year share buyback plan for up to $5 million that was approved by our shareholders on March 3. Through May 15, we have repurchased around 68,000 shares for approximately $0.5 million under this plan. With this, I will now turn the call over to Oscar to cover the financial highlights of the quarter.
Thanks, Aviv. Turning now to the financial performance for the quarter on Page 10. Consolidated net gaming revenue grew by 8% to €57 million. This was driven primarily by our Mexican business, where revenue grew 15% to €30 million. In Spain, net gaming revenue was roughly flat versus the prior-year period at €22 million. Adjusted EBITDA, meanwhile, was positive €1.8 million in the first quarter and included a contribution of €5.5 million from our Spanish business and €1.8 million from Mexico, its best performance to date. This marks our fifth consecutive quarter of positive adjusted EBITDA at the consolidated level. Looking now at our P&L on Page 11, adjusted EBITDA was in line with the first quarter of 2024 despite the €4 million increase in net gaming revenue due to a higher level of marketing investment in the quarter together with other investments made in the business and further into future growth.
Turning now to the consolidated figures on Page 12, the 8% increase in net gaming revenue was driven by a 13% increase in active customers, primarily in Mexico. On a constant currency basis, net gaming revenue would have grown 17% in the quarter instead of the reported 8%. As Aviv mentioned, we had a significant uptick in FTDs, which grew 21% to 91,000 in the quarter and were driven mostly by Mexico, where, in recent months, we've been testing a number of new customer acquisition channels. Turning to the Spanish operating and financial metrics, net gaming revenue in the first quarter was nearly flat at €22 million, driven by a lower spend practice. On a positive note, we managed to increase the number of active customers by 4% versus the prior year and 7% sequentially, getting back to 52,000 average monthly actives, the level we had prior to the reintroduction of welcome bonuses in the second quarter of 2024.
While adapting our promotional activity to this new competitive landscape in Spain has been challenging, we have made significant progress in regards to improving the quality of the customers we acquire, both in terms of player value and retention. In Mexico, net gaming revenue was €30.5 million in the first quarter, 15% above the prior-year period. The Mexican peso devalued by more than 16% in the first quarter of 2025, resulting in a €5 million headwind to our net gaming revenue, an even higher impact than the €3 million we had in both the third and fourth quarters of 2024. On a constant currency basis, our net gaming revenue in Mexico would have grown 34%. So, the underlying growth trend in this market is still very impressive. As in the fourth quarter, the sports betting margin was a bit lower than our target, this time equivalent to about 1 percentage point, which impacted NGR by about €1.5 million.
As mentioned before, we had a significant increase in average monthly active customers to 82,000, 31% above Q1 2024, and 19% above the prior quarter, albeit with lower player values than what we had seen previously, but also with lower acquisition costs. Going forward, we will continue to explore and optimize all sources of customer traffic and otherwise continue to believe that the opportunity to invest and grow in Mexico is still very compelling. On Page 15, we are including again the evolution of the Mexican peso against the euro, which had been relatively stable throughout the first quarter but more volatile since April on the back of trade tensions and other uncertainties. When comparing to the first quarter of 2024, the Mexican peso weakened by 6% in the first quarter of 2025. Looking ahead, the exchange rate headwind will continue but should begin to lessen after the second quarter as we begin to lap the significant devaluation of the peso following federal elections in Mexico in mid-2024.
In short, we are expecting a difficult comparison for the second quarter results, but less of an impact thereafter. Turning to the balance sheet on Page 16, as of March 31, we had €42 million of total cash on the balance sheet, of which approximately €37 million was available. In terms of our net working capital position, we ended the quarter with negative €18 million or around 8% of our LTM net gaming revenue, which continues to reflect the longer-term trend that we've spoken about of more restrictive trade terms with suppliers. Notwithstanding that, we believe that we are currently operating with a normalized level of working capital. Looking at our cash flow on Page 17, in the first quarter of 2025, we generated €2.2 million of available cash, partially offset by €0.9 million negative FX impact on ending cash balances due to the devaluation of both the Mexican peso and the U.S. dollar on cash we hold in both currencies.
Touching briefly on our outlook for 2025 on Page 19, we are reiterating our expectation to generate net gaming revenue between €220 million and €230 million and adjusted EBITDA in the range of €10 million to €15 million. Despite generating only €1.8 million in adjusted EBITDA in the first quarter, we are confident that our operating and investment plan for the remainder of the year, including around the Club World Cup taking place from mid-June to mid-July, will allow us to meet our full-year guidance. That's all from my end. I will now hand it back over to Aviv for closing remarks.
Thanks, Oscar. Before we move to Q&A, I want to thank the Codere Online team, as always, for their dedication and hard work in the recent months. As always, thank you to our investors, analysts, and market participants for your support and interest. We look forward to speaking with you again soon. With that said, we'll turn it back to the operator to open the call to Q&A.
分析師問答
Thank you. We will now begin the question-and-answer session. Your first question comes from the line of Jeffrey Stantial from Stifel. Your line is open.
Hey, great. Good morning, guys. Thanks for taking our questions. Starting off, it looks like CAC was down 6% quarter-on-quarter, even though, as you touched on, user acquisition was up quite nicely. Aviv, could you just talk about the competitive environment a bit more, if that's not really what's driving that? Just what is allowing you to continue to acquire more users at lower cost? Thanks.
Can you hear me? Can you hear me?
We can hear you.
We are constantly testing new traffic sources and trying different experiments. Recently, we had a positive experience with one of our channels, which we tested for about a quarter. This led to a decrease in cost per acquisition (CPA) and an increase in the number of players. However, these players had a lower spending value. We have many such sources to test, and this particular one did not yield compelling results. Ultimately, the contribution of these players to our revenue, as well as our projected future revenue from them, was lower than anticipated. Consequently, while we saw a reduction in CPA and an increase in first-time deposits (FTDs), the overall revenue impact was modest. I believe that in the upcoming quarter, we will return to our planned player acquisition rates and the familiar values we have seen before.
Hi, Aviv. Can you hear us now? We got disconnected there for a few seconds. Can you hear us now?
Yes.
Okay. Great. Sorry about that.
That's great. We can hear you, Aviv, on our end as well.
Okay. Perfect. Thanks, Jeff.
That's helpful. Thank you for that. And then, just turning to Spain, flattish net revenue growth in the quarter, that's obviously a bit of a deceleration quarter-on-quarter, both on a year-on-year and on a two-year stack basis. I just want to confirm, Oscar, is that mostly higher competition coming back in the market after some of the restrictions paired back off or if there's something else driving that? And then, as a corollary to that, are you hearing anything in terms of efforts to bring back some of those marketing restrictions via more formal legislation this time? Thanks.
Yeah. As you point out, the first quarter comparison is difficult because the reintroduction of the welcome bonus happened in April of last year. So, this is the last quarter where we have this difficult comparison with the prior-year period. So, yes, it's the impact of the new competitive landscape on the reintroduction of the welcome bonus and some other promotional strategies that now are permitted and that were previously prohibited activities. So, I think that's the primary driver. I can say that even though the first quarter was flat or slightly down, we are seeing some positive trends. We've made some changes, especially in the first quarter, focusing our promotional strategies where it needs to be focused on our higher-value customers, and it is showing good results in April and in the first few days of May. It's still a little bit too early to say with conviction, but within the more competitive landscape in Spain, I think increasingly we're going to find better ways to compete.
And to your second question, our understanding is that the government continues to pursue avenues to put the restriction back into place that were there pursuant to the original executive decree, but they haven't found a way of doing that. So, there are various legislative initiatives, one that we thought was close back in February through a healthcare law that we thought would go through, it ultimately didn't. But our understanding is the current government continues to work and requires cooperation with its coalition partners to get any legislation passed. So, that obviously would be upside for us. We're not counting on it, at least not in our short/medium term. We're assuming that the current environment is the one we have to operate in, but obviously, the reintroduction of that restriction on welcome bonuses would be good for us and good for the whole sector.
Okay. Perfect. And then, if I could just squeeze in one more, Oscar. I think you talked about average revenue per active being down on my math about 5%. Some of that is going to be a mix shift from Spain to Mexico given the lower player values there, but it looks like if you just evaluate each of those individually, the average revenue per player was down at a market level. So, can you just expand a bit further on what's driving that?
Yeah. I think in Spain, it's the issues that we talked about that our existing portfolio, the spend per active is a bit lower than obviously what it would have been before the reintroduction of welcome bonus, as well as the lower player values given the competitive bonusing and promotional environment that we have. The player values for new acquisitions are also lower. So that's the Spain impact. In Mexico, it's a little bit what we discussed and maybe Aviv already touched on this, but especially in the first quarter, the last month of '24 in the fringe of the first quarter of '25 where we were testing out some new acquisition channels. Those were with lower acquisition costs, but also at least initially what we're seeing is lower player value. So, that incrementally contributes and brings down the average spend per active in the period. We don't have enough data points to know conclusively whether what we found there.
Again, it's a higher or lower what we said. Customer acquisition cost is neither good nor bad. It's a function of the strength of the customer, the average customer that you're acquiring and the player values and the revenue that you're expecting to generate over longer terms. So, we're only three, four, five months in some cases in. So, the verdict is still out, but that's part of what you're seeing in terms of, at the consolidated level, the lower spend per active in the period.
That's great. Thank you both for all the color. I'll pass it on.
Your next question comes from the line of Michael Kupinski from Noble. Your line is open.
Thank you, and thanks for taking my questions. I just have a couple here. I was just wondering, in terms of your investments, it seems like you're getting still very favorable returns in Mexico. Are there market dynamics that are starting to improve in other markets to where you may step up investment spend, whether it be Argentina or wherever it might be? I just wanted to get your color on other potential markets to which you might invest?
Aviv, do you want to jump in?
Yes. So, basically, we started to see good results in Colombia. And I think everybody knows what happened in Colombia in the past few months with the VAT regime that they introduced. So, we had to stop our efforts over there. We do see some improvement in Panama in recent months. So, we have some expectations to mitigate some of the issues that we have in Colombia with Panama. In the coming months, we will see our investment increase a little bit in Mexico in order to reach our targets. In terms of new markets, our new big investment, currently, we are, let's say, staying defensive with our business plan, maybe just to mitigate a little bit with Colombia to see what's going on over there, because it's hurting us a little bit. And going forward, to next year with the World Cup, we will have a more aggressive budget to be able to capitalize on this large event and to continue to maintain our position in Mexico.
Yeah. I would just add one point on Spain that even though since April of last year, the unit economics, the player values have weakened directionally in that market, the unit economics are still very attractive. So, the level of investment that we've made in that market, even at the higher levels this year versus last year, are, in our mind, still very justified in terms of a return profile of the customers we're acquiring. So, it's still a very good market. It just went from a great market to a very good market.
Got you. That leads into my next question. Regarding your guidance for the full year, it seems you're expecting some sporting events to boost results in the latter half. I'm curious about how you view the various segments. Will Spain begin to contribute, can Mexico maintain its strong performance, and do you anticipate gains from other markets to help meet your full-year expectations? Could you share some insights on how you expect to achieve your targets geographically?
I think it's reasonable to expect improvement across most markets. Colombia remains uncertain regarding how we will address the tax on deposits. However, Panama is performing well due to product changes and new developments that have made our offerings more appealing to customers, and we are beginning to see results. In Argentina, the focus is less on top-line performance, especially with the lifting of capital controls and the recent significant devaluation of the peso. It's challenging, but we are no longer sponsors of the River Plate Club in Argentina as of March, which will reduce expenses at the EBITDA level. We will see some relief starting in the second quarter and definitely in the latter half of the year. Our expectations for Spain and Mexico remain strong, and we are also seeing positive signs in Panama and Argentina that support our belief in achieving our full year guidance.
Got you. Well, you got a good start to the year. Congratulations.
Thanks, Mike.
Thank you.
Your next question comes from the line of Ryan Sigdahl from Craig-Hallum. Your line is open.
Hey, good day guys. I want to stay on kind of the topic of new market potentially, and it doesn't sound like in the near term, but the parent company, Grupo Codere, just made an acquisition in Italy of an Italian land-based operator. Curious, you guys exited the Italian operations a few years ago. Curious how you think about new markets in the construct of maybe what your parent company is doing and specifically as it relates to Italy.
Yeah. So...
It's Moshe here. Ryan, how are you? Regarding Italy, a few years ago, we attempted to enter that market based on our operational experience there and the value of a strong player. However, as a non-brand in Italy, we struggled to establish ourselves and ultimately decided to withdraw, especially since it wasn't our core business, we lacked our own technology, and we didn't have a license back then. The group's current decision to pursue a partnership and a license is more aligned with the group's overall strategy rather than our company's specific strategy. As Aviv mentioned earlier, our main focus is on maintaining our position in Mexico, which we consider our core market with significant growth potential. It's crucial for us to retain our market share, particularly as new competitors are entering the space. We believe it's better to solidify our standing rather than divert our efforts to other markets. In Mexico, we still benefit from our omnichannel activities with the group, which is advantageous. Furthermore, we have managed to increase our marketing spend while maintaining a consistent ratio between CPA and player value, which is a positive indicator of growth potential.
Then just switching back to Spain specifically, I appreciate kind of all of the moving pieces there. Are you willing to comment specifically within your guidance if you expect that market to return to revenue growth for the rest of the year?
I mean that's our objective. Yes, if you're talking about year-on-year growth, yes, we would be expecting to resume growth in Spain, yes.
The signals that we are getting from the KPIs are, let's say, I can't say back to normal, but positive enough to make us confident with the results that we will deliver.
Your next question comes from the line of Arthur Roulac from Three Court. Your line is open.
Hey, guys. Good morning.
Hey, Art.
A couple of questions. First would be, you mentioned some, I guess, additional investments in 1Q on the marketing front. Were those sort of one-time in nature, or is this something else that you're doing that's, I guess, ongoing?
Yeah. I think that's a little bit of a mix of, on the margin, additional investments that we've made in terms of growing the team, personnel, as well as on the platform front. There's a number of initiatives. As you know, we operate on the Codere platform in all the jurisdictions other than Mexico and things that we're doing there to increase stability performance but also give us more functionality on the product front, especially payments, which is critical in Latin America. So, a little bit on that front. I think on the personnel front, the team has grown as well. We're always mindful of keeping personnel expense growth below the growth of the top line of the business, but there have been some areas where we've had to invest and some savings we see medium-term from greater automation as it relates to certain aspects of our business, customer verification and some of the other things we do. But today, given the scale and the growth of the business that we've had in the last year or two, there were some areas that we needed to reinforce. So, that's the type of investment, but nothing major there. It's really on the margin.
Marginal, yeah, I agree. Marginal. It's a marginal investment.
From a straight marketing perspective, I think last year, you guys spent like high €80 million in a euro perspective. The first quarter was sort of run-rating at €95 million- and-change. Would we expect that number to step back down into the high €80 millions, especially in light of the devaluation in Mexico, meaning that, I guess, your euro-dollar effectively is going further from a buy perspective there?
Yeah. So, you know that we are forecasting full year, but the spend on each quarter is not divided equally. Usually in the summer, we are lowering our marketing investment. So probably, we will be more of the same of what we had last year, maybe a little bit higher. Of course, we are generating more revenues, and we have the constraints of our EBITDA guidance. So, within those perimeters, which are very small fluctuations, we should spend more as expected.
Similar levels.
Yeah, similar level, plus the third quarter usually is a little bit with less investment because of the summer and the lack of sporting events. So, it's not a straight line going from first quarter to the fourth in terms of how to look at our marketing investment.
Got it. And then, I think I may sort of missed this. I guess, the River Plate sponsorship may be like rolling off and you said that might be some, I don't know, €1 million of cost savings in the back half of the year. Is that accurate?
Correct.
Yes.
And then, another thing I may have missed, did you say that there's sort of like a negative sport outcome in 1Q that was like about €1.5 million hit. Was that focused in Spain or Mexico, or is it a mix?
Specifically Mexico.
Mexico.
And it wasn't a major. I think last quarter, it was about 2 percentage points of margin. It was a little bit more significant. 1 percentage point is within the band of a normal margin. But yes, that's equivalent to about €1.5 million of NGR in Mexico. We saw that other competitors also reported the NFL season was very favorable with a very low margin. It impacted, let's say, I can't say the whole industry, but any sports betting bookie that has some focus in the United States was impacted by NFL results during the first quarter.
Yeah. No, it's been consistent across the group. I just have two more and then I'll let someone else jump on. The one thing I was confused about is this dynamic regarding the share repurchase. Thank you for putting it in, and thank you for beginning to execute it. But I guess the shareholders have approved a $10 million share repurchase, and the Board has approved $5 million. Is there a reason for that? I haven't seen that dynamic before as to why it was structured this way.
The share buyback involves a broader authorization from the shareholders. The Board's decision on how to implement this authorization can change over time. Initially, the Board approved a share buyback program of up to US$5 million, which we announced in the market, but it operates within the broader shareholder authorization. The Board has the flexibility to adjust this, whether that means increasing or decreasing the amount. Essentially, shareholders provide a wider framework, and the Board is responsible for executing in the best interest of all shareholders. Currently, we are following the management team's direction under the US$5 million buyback plan from the Board of Directors.
Got it. My final question, and then I will stop. Has there been any progress in this Argentina license acquisition? Or does it sort of remain stymied over price of the license?
Yeah, more the latter. We're still open to the opportunity, but nothing that's developed currently.
Got it. Thank you. Thank you guys very much.
Thanks, Art. Talk to you soon.
And there are no further questions at this time. Guillermo, I turn the call back over to you.
Okay. We have no questions coming in through the webcast either. So, unless anybody else would like to ask a question, I guess we can leave it here. We will be speaking again towards the end of July with our Q2 earnings. And anyone feel free to reach out if you have any follow-ups. Thank you.
This concludes today's conference call. Thank you for your participation. You may now disconnect.