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Spanish online gaming group Codere Online expects to be EBITDA positive in 2024 after Q4 2022 revenue climbed 70% year-on-year to €35.6m.

Topline numbers

Codere Online debuted on the US Nasdaq in December 2021, making 2022 the company’s first full year as a publicly listed business.

The company generated revenue of €35.6m in Q4 2022, 70% higher than the prior corresponding period.

The group’s Mexico revenue hit €14.5m in Q4 2022, more than double that of Q4 2021, amid a rise of 107%.

Meanwhile, Spain revenue rose to €17.8m in Q4 2022, up from €12.6m, marking a 42% increase year-on-year.

In Colombia, meanwhile, net gaming revenue (NGR) increased by 56% year-on-year to reach €2.3m.

For the full year 2022, revenue increased 45% to nearly €116m.

However, the company still reported a net loss of €17.4m in Q4 2022, rising to €45.9m for the entire year.

News nugget

CEO Moshe Edree has stepped down from his position, effective today (1 March), but will continue to be involved in the company as executive vice chairman of the board.

Aviv Sher, who previously served as COO, has taken over the CEO position. Sher boasts more than 15 years of industry experience, having held positions as COO of NeoGames and CEO of Prime Gaming.

“I am very proud of what we have accomplished together in our first year as a public company, and I am grateful for the opportunity to have served as CEO during such a critical phase of expansion and growth,” Edree said.

“Aviv and I have been working together for over a decade, and he has played a critical role in our success. I have full confidence in his leadership and his ability to build on our achievements, and take the company to even greater heights,” he added.

Edree stated the group’s Q4 and 2022 performance was better than expected.

“The World Cup undoubtedly played a significant role in keeping existing customers engaged but also attracting new customers during this quarter in which we had 54% more active players than in the same period of 2021,” he added.

Focus on profitability

In the earnings call, Edree said that in 2022, the company utilised a significant portion of the proceeds raised from the public listing to focus primarily on revenue growth through a significant increase in marketing investment.

However, in 2023, the company will gradually shift its focus towards profitability.

This transition is driven by current investor preference for cash-flow generating businesses or high-growth businesses with lower spend.

Therefore, in 2023, Codere Online plans to reduce its marketing investment and prioritise certain geographies.

Argentina remains firmly on the business’ agenda. The group expects to begin operations in the Province of Córdoba this year and will also continue pursuing licences in both the Provinces of Buenos Aires and Mendoza.

From a business mix perspective, Codere Online’s full-year revenue was evenly split between sports betting and casino games in comparison to a higher 56% contribution from sports betting in 2021.

In 2023, the company plans to leverage opportunities to cross-sell its casino product to sports betting customers.

Best quote 

Codere Online CFO Oscar Iglesias: “We continue to be very excited about the future and the opportunities that lie ahead, particularly in Argentina, where we are making significant progress towards starting operations in several new regions this year.”

Best question

Michael Kupinski, director of research at Noble Financial Capital Markets, enquired about the company’s plan for Brazil.

Edree responded that for the time being, the company’s focus remains on its core markets, which are Spain, Mexico, and Argentina.

However, as a Latin American brand, the company is carefully considering the Brazilian market, but legislative issues are a concern, as is the fact the current big brands in Brazil operate under a dot com licence.

Stressing that it’s not on the agenda at the moment, a possibility would be for Codere Online to enter the market in partnership with a local marketing agency to accelerate its efforts.

Current trading & outlook 

In 2023, the operator has set its sights on generating NGR of between €140m and €150m. NGR for 2022 came in at €122.9m.

It simultaneously intends to cut its Adjusted EBITDA losses by half, which is still projected to be negative at somewhere between €20m and €30m.

The group expects to be EBITDA positive in 2024.

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