Codere Online Luxembourg SA Q2 FY2024 earnings call

• Strong Q2 net gaming revenue: Delivered €54 million in net gaming revenue, a 13% increase from Q2 2023 and a sequential uplift from Q1. Casino segment contribution reached a record 59% of total net gaming revenue.
• Customer metrics: 73,000 first-time depositors with an average CPA of €236. Average monthly spend per customer was €225 (20% increase) and average monthly active customers increased 16%.
• Board changes: 3 new board members joined, with Gonzaga Higuero succeeding Pat Ramsey as Chairman.
• Financial highlights: Adjusted EBITDA was positive €1.3 million in Q2, nearly €6 million better than Q2 2023. Cash balance as of June 30 was €41 million, with approximately €35 million available.

In the second quarter of 2024, Codere Online's consolidated net gaming revenue grew to €54 million, a 39% increase year-on-year. The Mexican business was a key driver, with net gaming revenue up 57% to €28 million. Spain also saw significant growth, with net gaming revenue up 25% to nearly €22 million. The casino segment contributed a record high of 59% of total net gaming revenue. In Spain, net gaming revenue in Q2 increased 24% year-on-year, driven by a 27% increase in active customers to 52,000. Mexico's net gaming revenue was €28 million in Q2, a 57% year-on-year increase, with a 26% increase in active customers and 25% higher spend per active customer.

• Net gaming revenue outlook revised: Increased the lower end by €10 million and upper end by €5 million, now ranging from €205 million to €215 million, implying 22% growth vs 2023.
• Adjusted EBITDA range: Established between €2.5 million and €7.5 million for the year, with flexibility due to summer sports calendar and monitoring Mexican peso devaluation risks.

• Mexican peso devaluation: Could affect revenue trajectory for the back half of the year.
• Competitive landscape: Increasing competition in Mexico from new international players.
• Regulatory uncertainties: Potential regulatory reform in Mexico and evolving regulations in Spain.

Q: Jeff Stantial asked about the EBITDA guide, margin expansion, Mexico regulation, CAC, and impact of Spain/Real Madrid/Alcaraz wins.

A: Oscar and Aviv discussed margin impact from sports events, Mexican regulatory speculation, CAC driven by casino-first customers, and interplay between sports and casino segments.

Q: Ryan Sigdahl asked about trends in Eurocup/Copa, CAC, and Peru.

A: Aviv discussed product features, CAC driven by casino-first strategy, and focus on core markets with Peru not a short-term priority.

Q: Michael Kupinski asked about second half guidance, M&A, and Spain regulations.

A: Aviv discussed revenue caution due to Mexican peso, EBITDA flexibility, M&A interest but no immediate deals, and Spain regulatory monitoring.

Q: Mike Hickey asked about market share, product innovation, and cash flow.

A: Aviv discussed market share estimates, product advantages, and cash flow considerations including working capital and tax management