Codere Online recorded strong financial results for Q3 2024, with total net gaming revenue reaching €51.7 million, a 20% increase compared to the same period last year. This growth was driven by standout performances in Spain and Mexico, the operator’s two largest markets.
Spain: Increased Revenue, Heightened Competition
In Spain, net gaming revenue climbed to €20.9 million, an 11% increase from Q3 2023. Codere Online also saw an 18% rise in monthly active players, reaching an average of 48,500 during the quarter. However, the reintroduction of welcome bonuses following the Supreme Court’s partial rollback of advertising restrictions in April has intensified competition.
CFO Oscar Iglesias explained that while welcome bonuses provide an advantage for newer or more aggressive competitors, they have also slightly impacted profit margins for incumbents. “When we were operating without a welcome bonus, [it]
really favoured the top five, six, seven incumbents,” Iglesias said. Despite these pressures, he emphasized that unit economics in Spain remain robust.
CEO Aviv Sher acknowledged the challenge of higher customer acquisition costs (CPA), stating that increased competition in both traditional and digital media is driving up CPAs and potentially slowing return on investment (ROI). Still, he noted the company’s ability to attract higher-value players with better retention rates, a critical factor in maintaining long-term profitability.
Shifts in Spain’s Advertising Landscape
Spain’s advertising rules for gambling operators, which were initially tightened under Royal Decree 958/2020, have become more lenient since the Supreme Court’s decision. Operators can now market to players with accounts less than 30 days old, offer welcome bonuses, and use celebrity endorsements—practices previously prohibited. While these changes have heightened competition, Iglesias suggested that further legislative action could reinstate some restrictions. “There are initiatives underway where there could be legislation next year… to achieve the same legislative initiatives,” he told analysts.
Mexico Leads LatAm Growth
Codere Online’s largest market, Mexico, delivered €26.7 million in net gaming revenue during Q3, marking a 27% year-over-year increase. Adjusted for currency fluctuations, the growth would have been even more impressive at 43%. Monthly active players in the country also rose by 23%, underscoring Mexico’s pivotal role in Codere Online’s LatAm strategy.
Codere Online’s presence extends to other Latin American markets, including Colombia, Panama, and Buenos Aires, Argentina. Looking ahead, the operator is exploring potential acquisitions and market entries across the region to drive long-term growth. “One of the things we are considering is some kind of an M&A or entering a new growth market,” Sher said.
A Steady Outlook for 2024
The company achieved €1.5 million in adjusted EBITDA during Q3, marking its third consecutive quarter of positive earnings. With €44 million in cash reserves as of September 30, Codere Online is on track to meet its full-year guidance, targeting net gaming revenue of €205–215 million and adjusted EBITDA of €2.5–7.5 million.
Despite a delisting notice from Nasdaq due to delays in filing its 2023 financial statements, Codere Online remains optimistic. Iglesias affirmed that the company expects to finish 2024 at the upper end of its projections, supported by continued momentum in its core markets.
Codere Online’s ability to navigate a competitive landscape while maintaining growth highlights its adaptability and strategic focus as it continues to expand in Spain, Latin America, and beyond.
Sources:
“Codere Online Reports Financial Results for the Third Quarter 2024“, codereonline.com, November 27, 2024.