Codere Online CEO Aviv Sher has attributed a “very strong start” to 2023 to significant investment made during the FIFA World Cup, resulting in first quarter revenue growing year-over-year by over 50 per cent.
CFO Oscar Iglesias added that the operator was able to make a “significant improvement” to adjusted EBITDA, following a “lower level of marketing spend”, and reaffirmed the guidance outlook for the year ahead.
World Cup & cross-sell have positive impact
For Q1, Codere Online reported total revenue of €37.6m, up 57 per cent YoY (Q1 2022: €23.9m) while net gaming revenue rose by 55 per cent to €39.5m (2022: €25.5m) with 53 per cent of NGR coming from casino operations.
NGR is also up 5 per cent compared to the €37.7m achieved in Q4 2022, despite the tough comparatives with the World Cup competition taking place during the measuring period.
Average monthly active players increased during Q1 as well, rising by 22 per cent YoY to 123,900 (2022: 101,800).
Sher credited the NGR and engagement increase to Codere Online’s investment efforts during the World Cup in the previous quarter, as well as the cross-sell steps taken between sports betting and casino.
“We are off to a very strong start in 2023, with net gaming revenue growing by 55 per cent in the first quarter to nearly €40m,” commented the CEO.
“The significant investment that we made in the prior quarter around the World Cup allowed us to meaningfully grow our customer base versus pre-World Cup levels. These customers remained engaged throughout the first quarter, in particular in Spain and Mexico.
“Also, our cross-sell efforts between sports betting and casino played an important role in that engagement, with the latter contributing 53 per cent of our net gaming revenue.”
Mexico operations rise significantly
Every country of operations for Codere Online improved in NGR and average monthly active players during Q1, with Mexico witnessing the biggest rise in both categories.
Operations in Mexico achieved €15.8m in revenue during the quarter, while NGR rose by 75 per cent to €17.6m (2022: €10m) and the country’s average monthly active players grew by 48 per cent to 49,600 (2022: 33,400)
Colombia operations earned €2.4m in revenue, with NGR increasing by 55 per cent YoY to €2.3m (2022: €1.5m) and average monthly active players rising by 5fiveper cent to 25,200 (2022: 24,000).
Spain operations reported revenue and NGR of €18.4m with the latter rising by 40 per cent YoY (2022: €13.2m) with average monthly active players growing by 2 per cent to 40,200 (2022: 39,300), which Sher noted reflects “a higher quality portfolio of customers”.
During Q1 in Argentina, Codere Online was awarded a licence by the Province of Mendoza, is pursuing a licence in the Province of Buenos Aires and has withdrawn from the Province of Córdoba tender process “due to lack of a viable tax structure”.
In March, Deborah Guivisdalsky was also announced as Codere Online’s COO, who was previously Head of CRM/VIP for the company.
Positive EBITDA by 2024
Codere Online’s adjusted EBITDA in Q1 was a €2.3m loss, an 82 per cent increase YoY (2022: €13.2m loss).
The company reported a net loss for the quarter of €1.3m, up compared to the net loss of €10.1m in Q1 2022, and a total cash position of over €49m.
Iglesias stated: “We are excited to be presenting both strong top-line growth in the quarter and, more importantly, a significant improvement in adjusted EBITDA. This was partially driven by the lower level of marketing spend in the quarter in furtherance of our plans to deliver sustainable growth for our shareholders.”
Looking ahead, the CFO reiterated the 2023 guidance Codere Online published at the end of Q4, with NGR expectations between €140m-€150m and an adjusted EBITDA outlook of negative €20m-€30m.
Iglesias added that due to the strong Q1 performance, the company expects to be at the higher end of the range and is “well on track to deliver positive EBITDA and cash flow for the full year in 2024”.