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01/11 16:17
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture with strong revenue growth but concerns over negative cash flow and working capital. The Q&A section highlights management's lack of clarity on margin expansion and regulatory impacts, indicating potential risks. Despite increased revenue guidance and cash position, these concerns, coupled with high CPA and negative working capital, suggest a negative sentiment, likely leading to a stock price decline.
Net Gaming Revenue €54 million, up €15 million or 39% year-over-year, driven by strong performance in Mexico (57% growth) and Spain (25% growth).
Adjusted EBITDA €1.3 million, an improvement of nearly €6 million year-over-year, primarily due to a €15.3 million increase in net gaming revenue, despite higher marketing expenses related to Eurocup and Copa America.
Cash Position €41 million total cash, with €35 million available, an increase of €2 million from Q1 2024.
Active Customers in Spain 52,000, a 27% increase year-over-year, contributing to the 24% growth in net gaming revenue.
Active Customers in Mexico 26% increase in the number of active customers, contributing to a 57% increase in net gaming revenue.
Cost Per Acquisition (CPA) €236, reflecting an increased focus on casino-first customer acquisitions in Spain and Mexico.
Negative Working Capital Negative €19 million, around 9% of LTM net gaming revenue, reflecting a new normal level of working capital.
Cash Utilization in H1 2024 €1.5 million utilized, including a €0.2 million negative impact from FX on ending cash balances.
Casino Segment Contribution: The casino segment reached a record high of 59% of total net gaming revenue in Q2 2024.
Customer Acquisition: 73,000 first-time depositors were acquired with an average CPA of €236.
Net Gaming Revenue Growth: Net gaming revenue grew by 39% to €54 million, driven by a 57% increase in Mexico and a 25% increase in Spain.
Active Customers: There was a 16% increase in average monthly active customers.
Adjusted EBITDA: Adjusted EBITDA was positive €1.3 million, nearly €6 million better than Q2 2023.
Cash Position: Total cash increased to €41 million, with €35 million available.
Board Changes: Three new board members were appointed, with Gonzaga Higuero succeeding Pat Ramsey as Chairman.
2024 Outlook: Net gaming revenue outlook increased to €205 million to €215 million, reflecting a 22% growth versus 2023.
Competitive Pressures: The company faces competitive pressures in the online gaming market, particularly in Spain and Mexico, where customer acquisition costs (CPA) have increased due to a focus on casino-first customer acquisitions.
Regulatory Issues: The company operates in a highly regulated environment, which can pose risks related to compliance and potential changes in gaming laws that may affect operations.
Supply Chain Challenges: There are challenges related to increasingly restricted trade terms from suppliers, which have impacted the company's working capital position.
Economic Factors: The performance of the business is influenced by economic factors, including customer spending behavior and the impact of favorable sports results on betting margins.
Marketing and Investment Costs: The company has incurred higher marketing and investment costs leading up to major sports events, which may affect profitability.
Cash Flow Management: The company reported a negative cash flow in the first half of the year, which could pose risks to liquidity and operational flexibility.
Customer Acquisition Strategy: Increased focus on casino first customer acquisitions in Spain and Mexico, leading to higher CPA but better returns on investment.
Board Changes: Three new board members appointed, with Gonzaga Higuero succeeding Pat Ramsey as Chairman.
Product Mix: Casino segment reached a record high of 59% of total net gaming revenue, driving customer engagement.
Net Gaming Revenue Outlook: Increased outlook for net gaming revenue from €195 million - €210 million to €205 million - €215 million, implying 22% growth versus 2023.
Adjusted EBITDA Outlook: Established adjusted EBITDA range for the year between €2.5 million and €7.5 million, reflecting positive outlook for the back half of the year.
Shareholder Return Plan: The company is establishing a range for adjusted EBITDA between €2.5 million and €7.5 million for the year, indicating a focus on creating meaningful value for shareholders.
Cash Position: As of June 30, the company had €41 million in total cash, with approximately €35 million available, reflecting an increase in cash from the previous quarter.
Net Gaming Revenue Outlook: The company increased its net gaming revenue outlook for 2024 to a range of €205 million to €215 million, implying a 22% growth versus 2023.
The earnings call indicates mixed signals: stable NGR with currency impacts, a challenging Spanish market, and positive EBITDA. The Q&A highlights regulatory challenges and cautious optimism in Mexico. The share buyback and potential profitability improvements are positive, but concerns about Colombia's VAT impact and unclear guidance on its viability add uncertainty. Overall, the sentiment is balanced, leading to a neutral stock price expectation.
The earnings call presents a mixed outlook. While there is growth in key metrics like net gaming revenue and active users, challenges such as regulatory compliance issues, currency exchange risks, and competitive pressures in Spain temper optimism. The share buyback plan is a positive, but its limited execution so far reduces impact. The Q&A reveals management's lack of clarity on certain issues, which may raise investor concerns. Overall, the mixed signals and uncertainty result in a neutral stock price prediction.
The earnings call presents a mixed picture: strong net gaming revenue growth and improved EBITDA are positives, but the negative working capital and currency headwinds pose risks. The lack of a share buyback program and the cautious approach to hedging currency risk add uncertainty. The Q&A section reveals competitive pressures and management's non-specific answers on key issues, tempering optimism. Overall, the stock price is likely to remain stable, with no significant catalysts to drive a major move in either direction.
The earnings call presents a mixed picture with strong revenue growth but concerns over negative cash flow and working capital. The Q&A section highlights management's lack of clarity on margin expansion and regulatory impacts, indicating potential risks. Despite increased revenue guidance and cash position, these concerns, coupled with high CPA and negative working capital, suggest a negative sentiment, likely leading to a stock price decline.
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