Codere Online cuts net loss as revenue rises in Q1

Codere posted year-on-year growth across all its operating markets in the three months to 31 March, with each regional operation experiencing a double-digit increase in revenue.

Chief executive Aviv Sher praised the impact of investment around the Fifa World Cup in the previous quarter, which allowed the business to grow its customer base, with many of these players having remained active during Q1.

“We are off to a very strong start in 2023, with net gaming revenue growing by 55% in the first quarter to nearly €40.0m,” Sher said. “The significant investment that we made in the prior quarter around the World Cup allowed us to meaningfully grow our customer base versus pre-World Cup levels. 

“These customers remained engaged throughout the first quarter, in particular in Spain and Mexico. Also, our cross-sell efforts between sports betting and casino played an important role in that engagement, with the latter contributing 53% of our net gaming revenue.”

Q1

Revenue in Q1 amounted to €39.5m (£34.4m/$43.1m), up from €25.5m in the same period last year.

Codere’s operations in Spain were the primary source of revenue, generating €18.4m in Q1, up 39.4% year-on-year. This was despite the number of average monthly active customers being only slightly higher at 40,193, compared to 38,287 last year.

The operator experienced the highest level of growth in Mexico, where revenue was 76.0% higher at €17.6m. This was driven by a rise in average monthly active customers from 33,382 to 49,556.

Elsewhere, Colombia revenue jumped 53.3% year-on-year to €2.3m, while activities in other regions generated €1.2m in revenue, an increase of 50.0%.

In terms of spending, marketing was the main outgoing at €19.8m, although this was 10.4% lower than €22.1m last year. However, platform and content expenses were 24.4% higher at €10.7m, while personnel costs increased 40.7% to €3.8m and gaming taxes 64.1% to €6.4m.

After also including €1.1m in other costs, this left an adjusted EBITDA loss of €2.3m, although this was an improvement on the €13.2m loss posted at the same point last year.

Codere did not publish a full breakdown of its remaining finances for the quarter but did note that net loss was slashed from €10.1m to €1.1m, while its cash position at the end of Q1 was more than €49.0m.

“We are excited to be presenting both strong top line growth in the quarter and, more importantly, a significant improvement in adjusted EBITDA,” Codere Online’s chief financial officer, Oscar Iglesias, said. “This was partially driven by the lower level of marketing spend in the quarter in furtherance of our plans to deliver sustainable growth for our shareholders. 

“For the full year, we continue to expect to generate between €140.0m to €150.0m of net gaming revenue and adjusted EBITDA of negative €20.0m to €30.0m, although given our strong performance in Q1, we now expect to be at the higher end of the range and are well on track to deliver positive EBITDA and cash flow for the full year in 2024.”