Codere Online Luxembourg, S.A. Q3 FY2023 earnings call

• Delivered $43 million in net gaming revenue, a 41% growth y-o-y despite sector-wide sport betting margin issues. • Casino segment contributed 58% of net gaming revenue. • Active customers increased 19% to nearly 124,000, average monthly spend per customer up to €116. • Mexico drove most growth in active customers (38% increase y-o-y). • First time deposits declined 20% y-o-y, but core markets (Spain and Mexico) saw an increase in first time deposits. • Adjusted EBITDA was breakeven in Q3, vs negative $13 million last year. • Spain's adjusted EBITDA contribution was €8 million, up 71% y-o-y. • Mexico's adjusted EBITDA loss improved from negative $8.1 million to $2.6 million. • Cash on balance sheet as of September 30 was $43 million, with $37 million available.

Consolidated net gaming revenue grew 41% to over $43 million in the third quarter. The Casino segment accounted for 58% of net gaming revenue. Spain: net gaming revenue increased 27% y-o-y, with 55% of revenue from casino, active customers up 17%, and spend per active up 9%. Mexico: net gaming revenue reached $21 million, up 63% y-o-y, active customers up 38%, and spend per active up 18%. Colombia: net gaming revenue remained around $2 million, focusing on improving customer quality without significant marketing investment.

• Increased net gaming revenue guidance to $155-165 million (10% improvement vs initial 2023 outlook). • Adjusted EBITDA guidance: negative $10 million to $18 million. • Expect adjusted EBITDA and cash flow positive for the full year in 2024. • Specific 2024 guidance to be provided when reporting Q4 earnings in February.

• Regulatory changes in Spain could impact profitability. • Competition and legal disputes in Mexico could affect market share. • Overregulation in Spain could drive players to black market.

Q: Pat McCann asked about components of distributed/headquarter operating expenses and Spain's performance.

A: Aviv Sher and Oscar Iglesias discussed operating expenses and Spain's growth drivers, noting organic market growth and product improvements.

Q: Jeff Stantial asked about Q4 guidance, Spain's EBITDA margin, Spanish regulation, Mexico's market share, and Mendoza launch.

A: Aviv Sher and Oscar Iglesias responded on guidance, margins, regulation, Mexico's market, and Mendoza plans.

Q: Unidentified Analyst asked about free cash flow uses.

A: Oscar Iglesias discussed using free cash flow for marketing in Spain and Mexico to maintain momentum in core markets.