Super Group (SGHC) Limited (SGHC) Earnings

Management highlights

### Core Business Performance & Customer Metrics - Q2 2026 was an exceptional period that set new records for revenue, adjusted EBITDA, deposits, and wagering activity, driven by strong momentum and elevated customer engagement during the FIFA World Cup. - Average monthly active customers reached 6.2 million, up 13% year-over-year. Total wagering increased 8% for sports and 15% for casino year-over-year. - New customer acquisition during the World Cup increased more than threefold compared to the prior World Cup period; 50% of new World Cup customers were cross-sold to casino, up from 23% in the 2022 World Cup. - The company maintains a focus on acquiring and retaining customers that generate sustainable long-term value via its persistent annuity revenue model, which produces predictable revenues and profits with healthy unit economics. ### Strategic Partnerships & Brand Building - Closed a landmark partnership with Manchester United, making Betway the club's principal partner and exclusive global betting partner for the upcoming English Premier League season. The partnership aligns with long-term growth objectives, especially in Africa where Manchester United is the most popular football club. The company now holds exclusive global betting partner rights to the top three finishing teams from the 2025-26 EPL season: Arsenal, Manchester City, and Manchester United. ### Market Expansion & Regulatory Updates - Namibia is on track for a Q4 2026 launch, with strong existing brand recognition due to its proximity to South Africa and Botswana. The company targets 1-3 new market launches per year, with additional adjacent African markets under evaluation pending favorable regulatory and tax frameworks. - A full product suite, including slots, is scheduled to launch in Germany in August 2026. - Alberta's regulated market launched on July 13, 2026, with a disciplined phased rollout focused on user experience and retention of high-value customers, unlike the big-bang approach used in Ontario. Management expects a more rational competitive environment in Alberta compared to Ontario. - The company is preparing for local licensing and a seamless transition to a regulated market in New Zealand. ### Product & Fintech Development - Continued development of ZAR supercoin, including expanding wallet functionality, broadening exchange access, and advancing a phased rollout to build infrastructure for broader adoption and remittance services across key African markets. ### Capital & Balance Sheet - Ended the quarter with $548 million in cash, up 39% year-over-year, even after returning $25 million to shareholders in Q2 and $218 million over the prior 12 months. Pre-tax cash flow conversion reached 68% in the first half of 2026. - Management and the board are actively evaluating the most effective ways to deploy excess cash to maximize long-term shareholder value, while maintaining a robust balance sheet. The company has minimal debt and retains full financial flexibility.

Guidance

- Management raised full year 2026 guidance following strong first half performance and a solid start to Q3 2026. The updated guidance calls for total revenue greater than $2.6 billion and adjusted EBITDA greater than $710 million, up from prior targets. - Marketing spend is expected to return to a 21% to 22% of revenue range for the remainder of 2026, after coming in ~1% lower year-over-year in Q2 due to seasonal factors and non-ideal World Cup time zones for the company's customer base. - Guidance includes embedded assumptions for the UK iGaming tax increase and new Alberta taxes effective July 2026, and maintains conservative assumptions for sports-related volatility, consistent with prior guidance. - Management expects medium-term EBITDA margins to trend towards 30% in 2027, driven by operating leverage as revenue grows faster than the company's cost base and broad-based operational efficiencies. - Q3 2026 started with strong positive momentum carried over from the World Cup, with solid July performance driven by the return of regular seasonal club football competition which supports the company's popular parlay product.

Segment performance

Total Q2 2026 revenue: $684 million, up 18% year-over-year. Total adjusted EBITDA: $204 million, up 30% year-over-year, with adjusted EBITDA margin expanding to 30% from 27% in the prior year period. 1. Africa: Revenue grew 36% year-over-year. Adjusted EBITDA increased 47% to $133 million, contributing 65.2% of total adjusted EBITDA. Sports wagering rose 5% year-over-year, casino wagering rose 28% year-over-year. Sports margin hit a record 17% for the quarter. 2. International: Revenue grew 7% year-over-year (12% excluding the US). Adjusted EBITDA held steady at $84 million, contributing 41.2% of total adjusted EBITDA. Strong underlying growth was offset by UK tax impacts and short-term costs of strategic marketing campaigns. - Europe: Revenue grew 22% year-over-year, led by a 34% increase in the UK which delivered record revenue in May; Italy was up 18% year-over-year. - North America (excluding US): Revenue grew 9% year-over-year. Canada (excluding Ontario) delivered 11% revenue growth, while Alberta revenue was up 8% year-over-year ahead of its July 13 regulated market launch. - Rest of World: Revenue increased 6% year-over-year, led by 14% growth in New Zealand despite reduced marketing spend.

Risks & headwinds

- Non-ideal time zones for the 2026 FIFA World Cup reduced the event's upside relative to a more ideally timed tournament, and limited parlay betting volume. - Higher regulatory taxes in the UK and Alberta create margin pressure that requires ongoing operational efficiency optimization to offset. - Expansion into new African markets is contingent on establishing favorable regulatory, tax, and banking frameworks, creating uncertainty around launch timelines. - Sports results create inherent volatility for guidance, so management maintains conservative forecasting assumptions for sports-related outcomes. - The company faces strong competition from established market leaders with existing retail footprints in large high-potential markets like Nigeria.

Analyst Q&A

• Q: Sequential MAU decline and lower-than-expected marketing spend in Q2 – what is driving these trends and should we be concerned? /

  A: The sequential MAU decline is driven by normal seasonality: the World Cup only spanned the final two weeks of Q2, with no major soccer action in the preceding three weeks. Lower marketing spend (~1% down year-over-year) also reflects seasonality (Q2 is typically a slower marketing period for the company) and the non-ideal World Cup time zones for most of the customer base. Management expects MAU growth to resume in Q3 and Q4 supported by the new EPL season and Manchester United partnership, and remains focused on profitable revenue per customer rather than raw MAU growth. Marketing spend will return to its historical 21%-22% of revenue range for the back half of the year.

• Q: With excess cash on the balance sheet, how are you approaching capital allocation and M&A priorities now? /

  A: There has been no change to the company's disciplined approach to capital allocation. The priority remains high-return organic growth opportunities, with dividends and share buybacks always top of mind for returning excess capital to shareholders. For M&A, management remains highly selective, will not overpay for targets, and only pursues deals that strengthen the core business. The company has minimal debt, retains full financial flexibility, and is in no rush to complete transactions.

• Q: What drove the much higher World Cup sports margin versus the 2022 World Cup, and what drove the large increase in casino cross-sell? /

  A: The margin improvement is largely structural, driven by growing parlay adoption, better pricing and risk management, and the larger scale of the higher-margin Africa business today compared to 2022. The 53% cross-sell rate (up from 23% in 2022) was a deliberate strategic priority: because World Cup time zones were not ideal for the company's core customer base, management focused heavily on retaining new customers within the Supergroup ecosystem by pushing casino products. Management expects normal full-year combined sports margins to hold between 13%-14%.

• Q: How has the UK business performed following the April iGaming tax increase, and how is mitigation progressing? /

  A: UK revenue growth has been better than expected, with the UK delivering record revenue in May driven by recent product improvements. Management has optimized marketing spend and improved overall operational efficiency to offset the higher tax burden, and is pleased with current performance. Ongoing efficiency improvements will continue to support margins in the UK market going forward.