Codere Online (CDRO) Q2 2026: Net Gaming Revenue Jumps 27% as Mexico and Spain Drive Guidance Hike
Codere Online delivered a record quarter, with robust growth in both core and emerging markets, driving a substantial guidance raise for 2026. Disciplined marketing spend and strong customer engagement, especially around the World Cup, underpinned margin expansion and cash generation. Management signaled increasing strategic flexibility, with M&A and new market opportunities in focus as cash builds and competitive intensity rises in Latin America.
Summary
- Mexico and Spain Outperform: Core markets delivered above-expectation growth, fueling a full-year guidance raise.
- Marketing Leverage Evident: Spend efficiency improved as customer quality and retention rose despite competitive pressure.
- Strategic Flexibility Expands: Cash generation and a debt-free balance sheet position Codere Online for M&A and new market entry.
Business Overview
Codere Online operates regulated online gaming and sports betting platforms across Spain, Mexico, Colombia, Panama, and Buenos Aires. The company generates revenue from net gaming revenue (NGR), the difference between customer bets and payouts, with casino products contributing 62% and sports betting 38% of Q2 revenue. Spain and Mexico are the largest and most profitable markets, while Colombia, Panama, and Buenos Aires represent smaller but fast-growing segments. Codere monetizes through a mix of customer acquisition, retention, and cross-sell between casino and sports offerings.
Performance Analysis
Codere Online posted its highest-ever quarterly revenue, with net gaming revenue (NGR) up 27% year-over-year, driven by strong execution in both Spain and Mexico. Spain grew NGR by nearly 25%, benefiting from healthy customer acquisition and improved player values, while Mexico delivered 24% NGR growth, despite a sequential decline in active users as the company focused on customer quality over volume. Other markets, notably Colombia and Panama, posted over 50% NGR growth, with Colombia rebounding after the removal of a 19% VAT on deposits.
Profitability improved sharply, with adjusted EBITDA more than doubling and margin expanding to 8.4%. Marketing expense rose in absolute terms but fell as a percentage of revenue, reflecting efficiency gains and a disciplined approach to investment. Customer engagement metrics were strong: average monthly active customers rose 12% and spend per customer increased 13%, supported by World Cup-driven activity and effective cross-sell into casino products.
- World Cup Effect: Event drove 40,000 new customers and a 180% increase in stakes versus the prior tournament, with strong cross-activation into casino.
- Cost Discipline: Cost per acquisition (CPA) improved to €200, and marketing as a share of NGR declined, supporting margin expansion.
- Cash Generation: Operating cash flow reached €6.9 million, with €58 million in available cash and no financial debt, enhancing strategic optionality.
Management raised full-year guidance for both NGR and EBITDA, citing broad-based momentum, favorable market dynamics, and operational leverage across the portfolio.
Executive Commentary
"We delivered our highest quarterly revenue to date alongside strong profitability and cash generation. Revenue growth accelerated meaningfully versus an already strong first quarter... Most importantly, based on strong performance delivered in the quarter and the momentum we continue to see across the business, we are raising our guidance for the full year of 2026."
Aviv Sher, Chief Executive Officer
"Both Spain and Mexico delivered excellent performances and were the primary drivers of growth... The attractive market in Panama continued to perform very strongly during the quarter, ahead of our expectations and especially during the World Cup."
Marcus Arildsson, Chief Financial Officer
Strategic Positioning
1. Core Market Scaling and Profitability
Spain and Mexico remain the engines of growth and profitability, with Spain benefiting from improved platform stability, AI-driven retention, and increased marketing ROI. Mexico’s growth is increasingly driven by higher-value customers, as the company intentionally prunes lower-quality users and focuses on retention and cross-sell, particularly in a more rational competitive environment.
2. Marketing Efficiency and Customer Quality
Marketing spend is becoming more efficient, with cost per acquisition down and marketing as a percentage of NGR declining. Management is targeting a long-term marketing spend of 25% of NGR, in line with peers, and is prioritizing digital and performance marketing to support high-quality acquisition and retention.
3. Capital Allocation and Strategic Flexibility
Strong cash generation and a debt-free balance sheet provide Codere Online with the flexibility to pursue M&A, new licenses, and market entry, particularly in Latin America. Share repurchase remains an option, though management is signaling a preference for investing in growth and new markets as regulatory frameworks evolve.
4. Product and Market Diversification
Casino remains the largest revenue contributor, but sports betting is growing, especially during major events. Cross-sell between verticals is robust, with 30-40% of new sports bettors also engaging in casino games, supporting higher player values and lifetime value.
5. Regulatory and Competitive Adaptation
Codere Online is adept at navigating regulatory shifts, as seen in Colombia’s rapid recovery post-VAT removal. Competitive intensity is rising, especially in Mexico, but Codere’s brand strength, retention programs, and prudent promotional strategy are offsetting aggressive new entrant activity.
Key Considerations
This quarter marked a turning point for Codere Online, with the business demonstrating operating leverage, improved marketing efficiency, and strategic optionality as cash builds. Investors should monitor how these strengths translate into sustained growth and margin improvement as competitive and regulatory dynamics shift.
Key Considerations:
- Marketing Spend Discipline: Ongoing reduction in marketing as a percentage of revenue is key to margin expansion and long-term profitability.
- Customer Quality Over Volume: Intentional pruning of low-value users in Mexico and Spain supports higher ARPU and stickier cohorts.
- Regulatory Risk Management: Rapid adaptation to tax changes in Colombia and proactive positioning for new Latin American markets are critical for future growth.
- Capital Deployment Optionality: Cash reserves and no debt provide a platform for M&A and market expansion, but execution risk remains as new opportunities are pursued.
Risks
Codere Online faces rising competitive intensity, particularly in Mexico, where new entrants are deploying heavy promotional spend. Regulatory changes remain a persistent risk, as seen in Colombia and potential new markets. Marketing efficiency gains must be sustained, as a misstep could erode recent margin improvements. Currency volatility, particularly in Latin America, can also impact reported results and cost structure.
Forward Outlook
For Q3 2026, Codere Online guided to:
- Continued NGR growth, supported by customer engagement and retention
- Adjusted EBITDA margin improvement as marketing efficiency gains persist
For full-year 2026, management raised guidance:
- Net gaming revenue of €255–265 million (prior: €235–245 million)
- Adjusted EBITDA of €20–25 million (prior: €15–20 million)
Management highlighted several factors that support the improved outlook:
- Colombia’s recovery post-VAT removal and strong player re-engagement
- Spain’s sustained outperformance and higher player values
- Favorable competitive environment in Mexico and currency tailwinds
Takeaways
Codere Online’s Q2 results confirm the company’s ability to scale profitably, with core markets outperforming and marketing discipline driving margin gains. Strategic flexibility is rising as cash builds, but management will need to execute on M&A and new market entry to sustain momentum.
- Margin Expansion on Track: Marketing leverage and higher-quality customer cohorts are translating into sustainable profit growth.
- Execution Strength in Core Markets: Spain and Mexico continue to outperform, providing a stable base for further investment.
- Watch for M&A and New Licenses: The next phase of growth will depend on successful capital deployment and regulatory navigation in Latin America.
Conclusion
Codere Online’s Q2 2026 results reinforce its position as a leading operator in regulated online gaming, with core markets scaling and profitability improving. The business is well positioned to capitalize on new opportunities, but must maintain marketing discipline and adapt to evolving competitive and regulatory conditions to drive continued value creation.
Industry Read-Through
Codere Online’s results highlight several broader industry trends: Marketing efficiency and customer quality are becoming the key battlegrounds as markets mature and promotional intensity rises. Regulatory agility is essential, with rapid adaptation to tax and compliance changes separating winners from laggards. Operators with strong brands and balance sheets are positioned to consolidate share as new markets in Latin America regulate and open. For peers, the focus will increasingly shift to profitable growth, disciplined capital allocation, and the ability to cross-sell and retain high-value customers in a crowded landscape.