Codere Online ((CDRO)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Codere Online presented a balanced sentiment, reflecting steady growth despite notable challenges. The company announced positive metrics in net gaming revenue and emphasized strategic initiatives such as a share buyback plan. However, issues like currency devaluation in Mexico and regulatory hurdles in Colombia and Argentina were identified as areas of concern.
Net Gaming Revenue Growth
Codere Online reported an impressive growth in net gaming revenues, achieving €53 million, which marks a 5% increase compared to Q4 2023. Notably, in constant currency terms, net gaming revenue would have been €57 million, representing a substantial 15% year-on-year increase. This demonstrates the company’s resilience and ability to adapt to market conditions.
Successful Customer Acquisition
The company successfully acquired 71,000 first-time depositors in Q4 2024, up from 67,000 in the previous quarter. This increase came with the lowest cost per acquisition (CPA) since Q4 2023, at €211, showcasing efficient marketing strategies and customer engagement efforts.
Positive Adjusted EBITDA
Codere Online reported a positive adjusted EBITDA of €1.9 million for Q4 2024, contributing to a total of €6.4 million for the full year. This reflects effective cost management and operational efficiencies that have strengthened the company’s financial position.
Spanish Market Performance
The Spanish market showed significant improvement, with a 10% growth in revenue to €23 million in Q4 2024. Additionally, there was a 3% increase in active customers, highlighting the market’s robust performance and strategic importance for Codere Online.
Share Buyback Plan
Demonstrating confidence in its future cash flow generation, the board approved a one-year share buyback plan for up to $5 million. This move suggests a strategic focus on enhancing shareholder value and maintaining financial flexibility.
Weaker Mexican Peso Impact
The devaluation of the Mexican peso by 14% in Q4 2024 posed a significant currency headwind, reducing reported net gaming revenue by €3.4 million. However, the company indicated that constant currency growth would have been 14%, highlighting the underlying strength of its operations.
Challenges in Colombia
Codere Online faces regulatory challenges in Colombia due to a newly imposed tax on deposits. This development could impact business operations and investment decisions, underscoring the regulatory risks in the region.
Argentina Market Limitations
The inability to obtain a license in the Argentine province limits Codere Online’s growth potential in the region. This regulatory constraint poses a challenge to the company’s expansion plans in Argentina.
Forward-Looking Guidance
Looking ahead, Codere Online anticipates net gaming revenue between €220 million and €230 million for 2025, reflecting a 6% increase at the midpoint. The company also expects adjusted EBITDA of €10 million to €15 million, signaling optimism for future growth despite recognizing potential headwinds, including the new tax in Colombia and ongoing currency challenges.
In summary, Codere Online’s latest earnings call provided a balanced view of the company’s current standing and future prospects. While the sentiment reflected steady growth and strategic confidence, challenges in key markets such as Mexico, Colombia, and Argentina were highlighted as critical areas requiring attention. Overall, the earnings call emphasized the company’s resilience and adaptability in a dynamic market environment.
