Codere Online Luxembourg (CDRO) Q3 Earnings call transcript Nov 27, 2024

In the latest earnings call for the third quarter of 2024, Codere Online demonstrated resilience in the face of currency headwinds, reporting a net gaming revenue of EUR 52 million, marking a 20% increase over the previous year. This growth, despite the impact of the weaker Mexican peso, underscores the company's strategic focus on expanding its casino segment and enhancing customer engagement.

Strategic Growth and Customer Acquisition

Aviv Sher, the CEO, highlighted the significant increase in average monthly spend per active customer and the number of monthly active customers, contributing to the overall revenue growth. The company's focus on customer acquisition, particularly the 67,000 first-time depositors, shows a clear commitment to expanding its customer base. However, the average cost per acquisition has been on an upward trend due to increased investment in Spain and Mexico, with a shift towards acquiring "casino-first" customers.

Financial Highlights and Future Outlook

Oscar Iglesias, the CFO, provided a detailed analysis of the financial performance, including the positive adjusted EBITDA of EUR 1.5 million, driven by the Spanish and Mexican businesses. Despite the challenges posed by the Mexican peso devaluation, the company remains optimistic about its performance, expecting to finish the year in the upper part of the guidance range for net gaming revenue and adjusted EBITDA.

Navigating Competitive Landscape and Currency Risks

The earnings call also touched on the competitive landscape, particularly in Mexico, where new entrants have emerged. Aviv Sher addressed concerns about the impact of these competitors on customer acquisition and retention, expressing confidence in the company's ability to retain players through brand building and investment in operational efficiency. Additionally, the company is considering hedging mechanisms to mitigate currency risks in the medium to long term.

Looking Ahead

As Codere Online moves forward, it remains focused on executing its growth strategy, particularly in its core markets of Spain and Mexico. The company is also exploring potential M&A opportunities and expansion into new markets, subject to disciplined capital allocation. The strategic investments in its casino segment and customer engagement strategies have positioned Codere Online for continued growth, despite the challenges posed by currency fluctuations and competitive pressures.