Codere Online (CDRO) Q2 FY26 earnings call: guidance and Q&A

Asked about retention and cross-sell of 40,000 new World Cup customers and why CAC decreased despite increased competition.

Retention is looking "okay" and "better than expected" but it's too early to give exact figures, with summer and player finances impacting immediate post-tournament activity. CAC decreased because the company invested "around" the World Cup rather than directly in expensive broadcasts, leveraging its brand strength and prior investments.

“We didn't invest directly into the World Cup broadcast, which was extremely high, extremely expensive. We tried to keep the money around the World Cup. And I think the strategy proved well. So we saw that the CPA went down.”

asked by Jeffrey Stantial · answered by Aviv Sher

Noted implied 5% EBITDA flow-through in H2 vs. mid-30% in H1 and asked for drivers and long-term operating leverage expectations.

No substantial differentiation expected between H1 and H2 flow-through. Explained that gaming taxes and platform/content costs are variable, while marketing and overheads offer leverage. Expects continued progress in reducing marketing as a percentage of NGR and some additional leverage from other expenses.

“Over time, as we've seen so far, I think the conversation mostly when we had it with you guys is that there's a lot of focus on marketing. There is a little bit of leverage as well over time in other expenses. So big picture is that we think we progress both from keeping marketing as a lower percent of sort of NGR, but there's also probably a little bit of additional sort of leverage, operating leverage in the other expenses in the P&L.”

asked by Jeffrey Stantial · answered by Marcus Arildsson

Asked about investment plans in Colombia given VAT tax removal and ongoing tax uncertainty.

The current tax situation allows for good CRM and retention but is not favorable enough for marketing investment due to ROI. The company is in "wait and see" mode for further tax changes. If additional taxes are removed, they would reconsider marketing investment.

“It's not good enough to start marketing in terms of ROI. So hopefully, with the political change there, we will see maybe more business-oriented presidents, sorry. And with that, if another layer of tax will be removed and we are back to the prior tax levels, then we can discuss marketing investment back again.”

asked by Jeffrey Stantial · answered by Aviv Sher

Inquired about the percentage of new World Cup activations that also play iCasino and how it compares to expectations.

Approximately 30% to 40% of new users cross-activate to iGaming, primarily table games. This profile fits expectations, but it's still early to confirm long-term behavior.

“we see around 30% to 40% cross-activation. So far, by the way, the new users fit into this profile... There is around 30% to 40% that are playing iGaming, more table games, by the way, if it's interesting for the audience to hear than slots.”

asked by Ryan Sigdahl · answered by Aviv Sher

Asked for more color on the competitive environment in Mexico, especially regarding promotional intensity during and after the World Cup, given two major competitors are out.

While two competitors are out, four new big competitors have entered, making the environment "harsh" and "getting crowded." The company benefits from increased market exposure due to new entrants and its strong brand. Promotional activity is high with competitors offering significant free money, but Codere Online relies on its strong brand, retention schemes, and promotions for core/VIP customers.

“The competitive environment is harsh, is harsh. We see good competitors coming in with good products with spending a lot of money. If you are talking about the promotional activity, giving a lot of free money, let's say, around $100 free, $150 free, which are very big amounts and allow the customers to test their product.”

asked by Michael Kupinski · answered by Aviv Sher

Asked about the "normal state" marketing spend as a percentage of revenue for the business, comparing to competitors in the 15%-25% range.

The company will progressively decrease marketing as a percentage of NGR over time, aiming for the higher end of the 22%-28% range seen in mature regulated markets. Mexico is still a growth market requiring higher spend, while Spain is closer to the target range. The decision balances growth with profitability and shareholder value.

“I think for us as a company, we are aiming for the higher end of, let's say, around 25%, plus/minus 5% in order to optimize our investment and keep maintaining our position.”

asked by Arthur Roulac · answered by Aviv Sher

Asked how Codere Online achieved nearly 25% growth in the mature Spanish market.

Attributed growth to the market itself growing double digits, the company growing faster than the market, and improved platform stability and technology (AI) enabling better execution of plans, player retention, and player value. Also noted strategic investment of excess EBITDA back into the Spanish market. Acknowledged upcoming minor regulatory bumps but expressed confidence in overcoming them.

“I think we are growing more than the market at this stage. We managed over the past year, and this can be quoted to stabilize better the platform, AI here because I didn't hear any questions about AI throughout the whole session, but AI here in terms of technology helped us a lot to achieve stability that we were seeking for a long time in order for us to execute our plans and maintain our players and build the player value around it.”

asked by Arthur Roulac · answered by Aviv Sher