Codere Online continues growth trajectory in Q3 with positive results across all markets
Net gaming revenue during the three months to 30 September at Codere Online was €51.7 million (£43.1 million/$54.4 million). This surpasses last year’s $43.2 million but falls 5% short of €54.4 million in Q2 this year.
Analysing its performance, Codere Online reported significant increases across all its regional operations. These comprise Mexico, Spain and other, which includes Colombia, Panama and Buenos Aires in Argentina.
Mexico led the way with €26.7 million in revenue, up 27.1% from last year. This is despite a devaluation of the Mexican peso following the presidential election in June. The operator saw average monthly active player numbers increase 23% year-on-year to 637,000.
“Our company delivered another quarter of strong results,” CEO Aviv Sher said. “In Mexico, net gaming revenue was above the prior year period, despite the significant devaluation of the Mexican peso following the presidential election in June. In constant currency terms, our net gaming revenue in the country would have grown by 43%.”
Elsewhere, revenue in Spain in Q3 increased 10.6% to €20.9 million. Again, this was helped by a rise in average monthly active players to 485,000, up 18.3% from the previous year.
Codere Online also posted a 24.2% rise in revenue from operations in other regions. Activity across Colombia, Panama and Buenos Aires generated €4.1 million.
Net loss remains despite adjusted EBITDA success in Q3
Spending-wise, costs were higher almost across the board in Q3. The largest outgoing for the operator remains marketing at €22.4 million, some 13.7% more than last year.
However, revenue growth helped to offset this, meaning EBITDA for Q3 was €1.4 million, in contrast to last year’s €7.4 million loss. On top of this, adjusted EBITDA reached €1.5 million, compared to breakeven in 2023.
“This is now the third consecutive quarter of positive adjusted EBITDA and brings the year-to-date total to €4.5 million,” CFO Oscar Iglesias said.
In terms of its bottom line, Codere Online paid €2.1 million in income tax and accounted for €2.0 million worth of interest expense. After also including depreciation and amortisation costs, net loss for Q3 was €2.8 million, wider than last year’s €1.8 million.
Codere Online eyes upper end of guidance range
Looking at year-to-date performance, revenue in the nine months to the end of September hit €159.1 million, a rise of 30.6%.
Costs were higher in all areas, but EBITDA still reached a positive of €3 million, compared to last year’s €15.4 million loss. Adjusted EBITDA was also positive at €4.5 million, in contrast to a $7.6 million loss in 2023.
As for bottom line, income tax payments hit €3 million and warrants €5.8 million, although Codere Online did recoup €2.8 million through interest income. This left a net loss of €3 million, compared to €2.1 million in the previous year.
Looking ahead, CFO Iglesias is confident about full-year performance. He said based on Q3 and the preceding two quarters, Codere Online will likely finish at the upper end of its guidance range for 2024.
Nasdaq delisting appeal set for January
The Q3 results announcement also referenced news that broke earlier this month about its delisting from the Nasdaq Stock Market.
Nasdaq wrote to Codere Online on 12 November informing the operator of its ruling. This came after Codere Online did not file its Form 20-F for the year ended 31 December 2023, as required by Nasdaq Listing Rule 5250(c)(1).
Codere Online formally requested a hearing to appeal the decision on 18 November, saying it is working to complete and file the form. Nasdaq this week granted this request, with the hearing set for 16 January.