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Codere Online raises forecast again after first breakeven quarter

| By Richard Mulligan
Gaming group Codere Online has achieved its first breakeven quarter some two years after listing in the US.

Strong growth in its largest markets, Mexico and Spain, contributed towards a double-digit uptick in Codere Online’s net gaming revenue (NGR). The Q3 period to 30 September also saw the NASDAQ-listed group avoid posting negative EBITDA for the first time.

On the back of the Q3 performance, Codere Online has raised its forecast for the second successive quarter. It now expects NGR in 2023 to be between €155m and €165m, up from €150m-€160m. Adjusted EBITDA is now forecast to be negative €10m-€18m, rather than €15m-€25m.

Codere Online lifted by huge gains in Mexico

In Q3, Codere Online achieved NGR of €43.2m ($47.0m/£37.6m), which was up 41% year-on-year. Codere Online said Mexico exceeded expectations with revenue growth of 63%, reaching €21.0m and consolidating its position as its largest market by revenue. Spain, its second biggest market, saw NGR of €18.9m, which was up 27%. Its smallest categorised market, Colombia, saw a year-on-year drop of 5% to €1.5m.

Casino expanded its position as the group’s most lucrative segment. Some 58% of Q3 2023 NGR came from Casino, compared to 53% last year, with 42% from Sports Betting.

Codere Online’s growth was aided by a 19% rise in average monthly active players to 124,500. There were 39% more players in Mexico and 16% more in Spain.

Codere Online reins in marketing spend

The group enthusiastically reported its first-ever breakeven quarter in terms of adjusted EBITDA. This compared to a negative €12.8m in the same period last year.

As well as the increase in revenue, the EBITDA figure was aided by a cut in marketing, its largest area of expenditure. During the period, marketing outgoings were €19.7m compared to €24.3m a year ago. Marketing accounted for around 80% of NGR in Q3 2022 but just 46% in Q3 2023.

Path to profitability

Aviv Sher, CEO of Codere Online, said the quarter saw the group take “a significant step in our path to profitability”.

Oscar Iglesias, CFO of Codere Online, said: “Our third quarter results have shown that the combination of a strong brand, high-quality customer acquisitions and an attractive product offering has allowed us to deliver not only strong top line growth but also a significant improvement in profitability, with our first quarter of breakeven adjusted EBITDA less than two years following our US listing.”

Codere Online said that if it hits its new adjusted EBITDA target it will have reduced losses by 70% year-on-year. It posted a negative €51.2m in 2022 and €23.8m in 2021. The group reiterated that it remains on track to become adjusted EBITDA and cash flow positive for full-year 2024.

For the nine months to 30 September, Codere Online’s NGR is up 43% to €121.8m. Adjusted EBITDA is up 79.2% to a negative €7.6m compared to negative €36.5m in Q1-Q3 2022.

Codere Online debuted on the NASDAQ in December 2021 following the completion of its merger with special purpose acquisition company DD3 Acquisition Corp II.

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