As the digital playground of online betting and casino gaming continues to evolve, Codere Online, a notable name in the industry, has once again scaled up its financial forecasts following an exceptionally robust third quarter performance. The NASDAQ-listed company has reported a noteworthy net gaming revenue surge underpinned by vigorous growth in its two principal markets: Mexico and Spain. The period ending on 30th September marks a historical milestone for the group, as it achieved a breakeven quarter in terms of adjusted EBITDA for the very first time.
These encouraging figures have prompted Codere Online to revise its financial expectations for 2023. Previously, net gaming revenue (NGR) was anticipated to fall between €150 million and €160 million. However, the company has raised this projection and now expects NGR to reach somewhere between €155 million and €165 million. The adjusted EBITDA forecast has also been modified, with the new range set between negative €10 million and negative €18 million, an improvement from the earlier estimate of negative €15 million to negative €25 million.
The third-quarter triumph was no small feat for Codere Online, as it saw NGR soar to €43.2 million, representing an impressive 41% year-on-year uptick. Mexico, serving as the group’s largest market revenue-wise, surpassed expectations with a staggering 63% growth in revenue, culminating in €21.0 million. Spain, which holds the position of the second largest market, also reported a solid increase with NGR reaching €18.9 million, up by 27%. In contrast, Colombia, though smaller in comparison, experienced a 5% decline, falling to €1.5 million.
Looking at the various sectors within Codere Online’s portfolio, the casino segment continued to expand its dominance as the company’s most profitable avenue. Casino operations contributed to 58% of the NGR in the third quarter of 2023, climbing from 53% in the previous year. Sports betting, on the other hand, was responsible for the remaining 42%.
Another significant factor contributing to the robust growth was the 19% rise in the average monthly active players, which reached 124,500. This included a 39% increase in players from Mexico and a 16% rise in Spain, indicating a strong player base expansion.
Notably, this third quarter marked Codere Online’s first-ever breakeven period in terms of adjusted EBITDA. This is an encouraging sign, illustrating a sharp contrast to the negative €12.8 million recorded in the same period last year. A key component behind this positive shift was a substantial reduction in marketing costs, the group’s previously largest area of expenditure. Marketing outlay in the third quarter of 2023 was reduced to €19.7 million from €24.3 million last year.
Aviv Sher, the Chief Executive Officer of Codere Online, expressed enthusiasm over the company’s performance, describing the third quarter as a significant leap towards profitability. Similarly, Chief Financial Officer Oscar Iglesias highlighted the interplay of a strong brand, high-quality customer acquisitions, and appealing product offerings as major drivers behind Codere Online’s top line growth and profitability improvements.
The company is optimistic about continuing this positive trajectory and if it meets the revised adjusted EBITDA target, it will have successfully reduced its year-on-year losses by 70%. This would mark a significant reduction from a negative €51.2 million in 2022 and €23.8 million in 2021. Codere Online also reiterated its confidence in reaching adjusted EBITDA and cash flow positivity for the full-year 2024.
Total NGR for the first nine months leading up to 30th September has climbed 43% to reach €121.8 million. Meanwhile, adjusted EBITDA improved by 79.2% to negative €7.6 million in comparison to negative €36.5 million during the same period in 2022.
Codere Online’s steady incline towards financial health was initiated following its debut on the NASDAQ in December 2021, subsequent to completing a merger with special purpose acquisition company DD3 Acquisition Corp II. The company’s recent success in its Q3 financials is a testimony to its strategic growth plans and operational fortitude, positioning it as a noteworthy entity in the online gaming and betting landscape.
