CDRO — H1 2026 Financial Report Analysis

Codere Online H1 2026: revenue up 18% and a swing to profit, though non-cash accounting gains did a lot of the work below the operating line

Codere Online, the Nasdaq-listed online sportsbook and casino arm of Spain's Codere Group, grew IFRS revenue 18.4% to €124.7 million in the six months to June 30, 2026. It reported net income of €5.6 million, against a €3.1 million loss a year earlier. Online casino did most of the growing. The World Cup lifted betting activity in the second quarter, and management raised its full-year outlook on July 30. The two figures that matter most for the next year, though, are not in the headline: Mexico, its largest market, still loses money at the segment level, and about half of the year-on-year swing in net income came from finance-line items unrelated to taking bets.

At a glance

• €124.7m revenue, +18.4%. Spain grew 20.7% and Mexico 15.6%. Online casino revenue (€76.2m, +20.1%) grew faster than sports betting (€48.4m, +15.6%) and is now 61% of the total.
• Operating income of €5.3m (4.2% margin), up from €3.0m (2.9%). Operating margin is the share of revenue left after running the business, before interest and tax. It improved even after a €6.2m charge for management share awards, which had been a €0.5m credit a year earlier.
• €16.7m operating cash flow, roughly three times net income. Most of the gap came from paying suppliers later and from customer balances, not from profit. Cash ended at €62.5m, with no financial debt.

Results table

Net gaming revenue (NGR) is the company's preferred top-line measure. It adds back about €9.1m of accounting adjustments: the treatment of certain partner and affiliate agreements in Colombia, VAT on service fees in Mexico, and inflation accounting in Argentina. "n.m." = not meaningful, because the prior year was a loss.

Takeaway: Revenue growth and operating profit both improved, but the swing to a net profit depends heavily on the finance line. A €2.7m non-cash gain from Argentina's hyperinflation accounting, plus a €3.2m smaller currency loss than last year, account for most of the €6.5m improvement in finance results. Operating income rose by a more modest €2.3m. Meanwhile Mexico's segment EBITDA worsened to a €1.8m loss. The investment case still depends on Mexico reaching profitability, not on Spain.

Spain carries the profit, Mexico carries the growth bill

Codere reports two main segments, Spain and Mexico, with Colombia, Panama and Argentina grouped as "Other". Segment EBITDA (earnings before interest, tax, depreciation and amortization, the measure management uses to judge each market) tells a lopsided story:

• Spain grew revenue by €9.1m, yet segment EBITDA fell 8.5% to €6.8m because its operating costs rose 26% (€44.7m vs €35.4m), faster than sales. Average monthly active players in Spain rose 12% to 56,700, per the Q2 earnings release. The pattern suggests heavier customer-acquisition spending around the World Cup. The filing does not break marketing out by country, though, so the exact split is unknown.
• Mexico is the biggest market by revenue but spent nearly all of it: operating costs were €62.5m against €62.2m of revenue, so the EBITDA loss doubled to €1.8m. Mexico's NGR rose 19% for the half (24% in Q2), with active players up 11%. After the period, Codere signed a multi-year deal (announced September 10) to become the NFL's official betting partner in Mexico, including the November 22 Mexico City game and Super Bowl LXI. That deal adds marketing cost to the same market that is already losing money, in exchange for brand reach.
• Other markets nearly broke even (−€0.1m vs −€0.5m). Separately, Codere stopped offering online gaming in Argentina's Mendoza province on August 10, 2026. On September 17 the provincial regulator approved the transfer of its licence stake to Cela, S.A. and Vital, S.A.

Where the money went

Total operating expenses rose 16.7% to €119.4m, slightly slower than revenue. By line, from the expense notes:

• Marketing: €49.8m, +8.1%. It remains the largest single cost at 40% of revenue, but it grew less than half as fast as sales. That gap is the main source of operating leverage this half.
• Professional services and other (platform, odds feeds, payment processing, streaming): €34.8m, +10.7%.
• Gambling taxes: €11.7m, +4.8%.
• Casino licence royalties: €5.1m, +26.8%, tracking the shift toward casino revenue.
• Personnel: €17.3m, nearly double (€8.7m). The entire jump comes from a €6.2m long-term incentive plan (LTIP) charge for executive share awards. Wages and salaries alone rose a more normal 27% to €8.1m.

What the headline numbers hide

• The net-income swing leans on non-cash finance items. Net financial results moved from a €4.9m cost to a €1.6m gain. The components: Argentina hyperinflation accounting (a required restatement of Argentine peso results for inflation, which is non-cash) added €2.7m, against €0.2m last year. Currency losses shrank to €0.1m from €3.3m. The fair-value charge on the company's public warrants was €1.1m, against €1.9m. Interest income was a negligible €0.1m. Excluding the hyperinflation gain alone, pre-tax income would have been about €4.2m rather than €6.9m.
• The Q2 quarter on its own was a net loss. The earnings release shows Q2 net loss of €1.4m (vs €2.4m loss in Q2 2025), driven by a €3.9m LTIP charge and a €1.7m warrant charge in that quarter. The H1 profit was all earned in Q1.
• The GAAP vs adjusted gap is wide. Adjusted EBITDA of €11.9m is more than double IFRS operating income of €5.3m. The main exclusion is the €6.2m LTIP charge, a real cost to shareholders paid in shares rather than cash. The prior year's €4.1m adjusted figure also excluded €1.1m of non-recurring items.
• Cash conversion looks strong but is flattered by working capital. Operating cash flow of €16.7m included €11.0m from higher trade payables and other liabilities. Trade payables rose to €28.3m from €22.4m, and customer wallet balances rose to €10.5m from €9.7m. Receivables rose €4.3m (to €11.8m), mostly VAT recoverable (€7.8m vs €5.4m) and deposits made at Codere Group retail betting terminals, not customer credit risk. Currency moves cut €3.4m from the euro value of cash.
• Not all of the €62.5m cash is free. €4.6m is reserved cash that regulators in Spain, Colombia and Buenos Aires require to back customer wallet balances.
• A warrant liability of €5.5m expires November 30, 2026. It sits in current liabilities. Its value swings with the share price and has cost €1.1m through the P&L this year.
• Related-party dependence: Codere Group owns 65.9% of the shares through Codere Newco and supplies retail terminals and other services. Payables to group companies were €2.9m at period end.

Guidance: raised, but the implied second half is cautious

On July 30, management raised its FY2026 outlook to €255–265m of NGR and €20–25m of Adjusted EBITDA. Both are €20m and €5m above the previous ranges, which implies earlier ranges of €235–245m and €15–20m. With €133.8m of NGR and €11.9m of Adjusted EBITDA already booked in H1, the new ranges imply a second half of roughly €121–131m NGR and €8–13m Adjusted EBITDA. NGR in that range would be at or below H1, even though Q2 alone ran at €69.4m. Some of that caution is reasonable, since the World Cup boost will not repeat and the NFL sponsorship begins. Even so, the guidance leaves room for another beat if Q2's player growth holds.

Outlook and what to watch

• Mexico segment EBITDA. It needs to move from a €1.8m half-year loss toward breakeven while NFL sponsorship spending ramps up. This is the single number that decides whether group growth turns into group profit.
• Spain's cost growth. Costs grew 26% against revenue growth of 21% in H1. If that continues in a half without a World Cup, Spain's margin compression is a trend rather than tournament-driven spending.
• Q3 results (expected around late October / early November, based on last year's cadence; not confirmed). Watch whether NGR holds above €60m a quarter after the World Cup, and whether the LTIP and warrant charges continue to swing quarterly net income.
• Warrant expiry on November 30, 2026 removes a source of fair-value noise from the finance line after this year.

Our read: the operating business is improving. Revenue is growing faster than marketing spend, and the company has €62.5m of cash and no debt. But profit is concentrated in Spain, and the reported net income overstates the operating improvement because of accounting gains in Argentina. A cleaner signal would be operating income growing faster than adjusted EBITDA, which would mean the LTIP charges are fading while Mexico narrows its losses.

This analysis covers the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2026 (IFRS, euros), furnished on Form 6-K on September 30, 2026. Quarterly, NGR and active-player figures come from the company's Q2 2026 earnings release furnished July 30, 2026. Codere Online is a foreign private issuer and does not file 10-Qs.