Operator: Welcome to Betsson Q3 Report 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Pontus Lindwall and CFO Martin Öhman. Please go ahead.
Pontus Lindwall: Thank you very much. Good morning, and welcome to Betsson's presentation of the Q3 2026. I am Pontus Lindwall, President and CEO of Betsson, and with me today is also our CFO, Martin Öhman. The high level of customer activity continued during the Q3, supported by the FIFA World Cup and the start of the major European football leagues. Customer deposits and total gaming turnover increased, and the number of active customers rose by 40% to a new record.
Pontus Lindwall: Group revenue also reached a new all-time high for a single quarter, up 10% year-over-year. This is particularly positive given that the Sportsbook margin was considerably lower than in the Q2, due to player-friendly results in the European football leagues and cups. Growth during the quarter was instead driven by the Casino product, with Casino revenue also at new record level.
Pontus Lindwall: This performance demonstrates the strength of our diversified business model with a broad geographical presence, several strong brands, and competitive offerings in both sports betting and Casino that complement each other. The strongest growth once again came from Latin America, where we grew by more than 50% to new record levels, largely due to the successful execution of marketing activities in connection with the FIFA World Cup. Our long-term investments in products, brands, and locally adapted marketing continue to strengthen our positions in the region. At the beginning of August, the acquisition of Rhino Entertainment Group was completed. Rhino was subsequently consolidated into the group and made a positive contribution to revenue and earnings during the quarter. The acquisition strengthens our geographical and commercial diversification and provides additional opportunities to generate profitable growth over time.
Pontus Lindwall: Operating income or EBIT amounted to EUR 46 million, an increase compared with the previous quarter, marking the second quarter in a row with sequential growth in EBIT. The EBIT margin also improved quarter on quarter, despite a considerably lower Sportsbook margin than in Q2. At the end of the quarter, our flagship brand, Betsson, was launched in Belgium through a rebranding from betFIRST. The rebranding strengthens Betsson as one of the industry-leading global brands and reflects our ambition to drive greater consistency and scalability across the business. During the quarter, new match kits were revealed for our two main jersey sponsorship partners in Europe, Inter and Club Brugge. Last week, these two clubs met in a thrilling Betsson derby in Champions League, with plenty of goals scored and Club Brugge walking away with 3 points.
Pontus Lindwall: In general, Q3 was full of exciting news on the sponsorship front. In September, the group round was played in Davis Cup with Betsson as one of the sponsors. The Davis Cup finals will take place in Italy in November. Some other news worth mentioning, Inter's women qualified for the Women Champions League for the first time ever. There was also another Betsson derby in Argentina as Racing Club and Boca Juniors went head-to-head in Argentine Cup, both featuring Betsson at the front of their match jerseys. During Q3, the online slot game Gates of Inter was released. This is a Casino game developed exclusively for Betsson based on the sponsorship with Inter. Bespoke content is a way to strengthen differentiation and to capitalize on our sponsorship assets.
Pontus Lindwall: We have previously released exclusive online slot games based on our sponsorships with Boca Juniors and Atlético Nacional. Betsson's gaming sites are largely operated on a proprietary platform that makes up the core of the offering and user experience. Our platform manages payments, customer information, and account management, as well as the games we offer. During the quarter, several new onboarding and payment solutions were integrated across some of our most important markets. For the Sportsbook, several new functions were introduced, such as new betting opportunities during extra time in football matches, as well as team and player pages for the main matches in Europe. During the quarter, almost 500 new Casino games were released, 40 of which came with some kind of exclusivity. We also integrated and launched new slot game suppliers in several markets. Another project was the migration of betFIRST in Belgium to our own platform.
Pontus Lindwall: As mentioned before, the offering in Belgium was consequently relaunched under the Betsson brand in the quarter. Now a brief update on our Sportsbook. Just like most major international operators, we have invested and developed our own proprietary Sportsbook over many years. This has been the right strategic decision, and it has paid off. Today, Sportsbook revenue accounts for about 25% to 30% of group revenue, which provides revenue diversification. In recent years, our Sportsbook has been further developed utilizing the very latest frameworks and versions of the technologies used to develop and operate this product in a cloud environment. So far in 2026, we have offered bets across more than 50 sports and categories. Football is by far the largest sport in our Sportsbook, and this is where we have the broadest and deepest offering.
Pontus Lindwall: Consistent benchmarking against industry peers shows that we are among the absolute market leaders in the number of betting markets offered, unique bet types, features, and Bet Builder functionality. The World Cup was a great success for us. We served more than 800,000 customers, and we took more than 20 million bets during the tournament. Further, the uptime in our Sportsbook was 100.0% during the World Cup. That means full uptime. In September, we launched Betsson Foundation, a registered public benefit foundation that brings together and supports the group charitable, community, and sports-related initiatives under one organization. This is primarily a continuation of what we have already been doing. For many years, Betsson Group has contributed to a wide range of organizations and local communities across its markets and office locations.
Pontus Lindwall: From employee-led fundraising and grassroots projects to community and CSR initiatives developed through our partnerships with leading football clubs and athletes. The launch of the Betsson Foundation marks the next step in Betsson's long-standing commitment to create positive impacts. The foundation will serve as the central organization for coordinating and scaling Betsson Group's social impact activities, working closely with employees, partners, and local organizations across Betsson's markets. Now I'll hand over to Martin for a closer look at the financials.
Martin Öhman: Thanks, Pontus, and hello, everyone. The Q3 was a solid quarter with all-time high revenue and increased operating income compared to the previous quarter. The acquisition of Rhino Entertainment was finalized in the quarter and consolidated as from August and contributes with two-month results to the quarterly figures. Many KPIs are trending the right way with a lot of all-time highs following increased activity subsequent to the FIFA World Cup this summer. I will start this section of the presentation by focusing on some KPIs, and after that, go into more details of the reported financial numbers. Customer deposits in all gaming solutions, including both B2B and B2C, are up 6% compared to the same period last year.
Martin Öhman: The number of active customers is the highest number ever, with an an increase of 40% compared to last year, and now sums up to close to 1.9 million customers in the quarter. The gross turnover in Sportsbook across all bets and gaming solutions, including both B2B and B2C customers, was up by 8% compared to the same period last year and amounted to close to EUR 1.4 billion. Sportsbook margin was 8.1%, which is lower than the 8.8% margin in the Q3 last year, and also lower than the two-year rolling average margin of 9%. Sportsbook revenue increased by 1% compared to last year and amounted to EUR 72 million. The Casino turnover increased by 7% year on year, and Casino revenue increased by 14%, a new all-time high. The difference in growth numbers between turnover and revenue is explained by a shift in mix between B2B and B2C.
Martin Öhman: Casino revenue represented 77% of the group's total revenue in the quarter, and Sportsbook jumped 22%. Reported revenue for the quarter amounted to EUR 327 million, an increase of 10% and the highest revenue ever for a single quarter. The acquisition of Rhino Entertainment was consolidated as of August. Adjusted for the acquisition and FX impact, the organic growth year on year was 6%. Revenue from the B2C business has grown by 28% or EUR 61 million year on year, whilst the B2B business showed declining revenue year on year by 39% or by EUR 30 million, explained by decreased revenue from one of the group's B2B customers. B2B revenue is also slightly down quarter on quarter, mainly explained by a lower Sportsbook margin in Q3 compared to Q2 this year. Revenue from the B2B business corresponds to 14% of the total revenue, and B2C revenue to 86%.
Martin Öhman: Revenue from locally regulated markets increased by 35% compared to last year, and now constitutes 78% of total revenue, compared to 64% last year. Splitting revenue by region, we see growth compared to previous year in all regions apart from the Nordics and the Central and Eastern Europe and Central Asia region, the CECA region, which both are down compared to last year. In the Nordic region, revenue decreased by 10% compared to the corresponding period last year. The decline is driven by decreased revenue across both Sportsbook and the Casino product, and in both Sweden and Denmark. However, the revenue from the region increased quarter on quarter, and Q3 shows the highest revenue levels so far this year, driven by the Casino product. The Nordic region represented 10% of the group's total revenue in Q3.
Martin Öhman: Revenue from Western Europe increased by 14% year on year, or by EUR 8 million, and reported the highest revenue ever for the region in a single quarter. The Italian market reported all-time high revenue, and also reaching new record levels in both deposits and turnover. The growth compared to corresponding period last year is mainly driven by the Casino product. France reported increased revenue compared to the corresponding period last year, but declined compared to the previous quarter due to lower Sportsbook margin. Revenue from Belgium decreased compared to the corresponding period last year and compared to previous quarter, explained by a lower Sportsbook margin and lower activity in the Casino products. The Western Europe region represented 20% of the total revenue in the quarter. Revenue from the CECA region decreased by 17%, or by EUR 20 million.
Martin Öhman: Revenue was negatively impacted in the quarter by lower license revenue for system delivery to B2B customers in the region, explained by a lower activity in both Sportsbook and the Casino product. However, the B2C segment in the region continued to perform well, where Croatia, Georgia, Poland, Latvia, Lithuania, and Estonia all reported increased revenue compared with the corresponding period last year, driven by the Casino product. The CECA region represented 30% of the group's total revenue. Revenue in the Latin America region increased by EUR 40 million, or by 52% compared to the same period last year, which was the highest revenue ever for the region, driven by strong underlying activity in both the Sportsbook and in the Casino product, with new record levels across Sportsbook revenue, Casino revenue, Casino turnover, and deposits.
Martin Öhman: Argentina, Peru, and Colombia all reported strong revenue growth in Q3, driven by solid performance across both the Casino product and the Sportsbook product. The Latin America region represented 36% of the group's total revenue and kept its position as the group's largest region. The region Rest of the World increased by 106% in Q3, following the acquisition of Rhino Entertainment in August, with Canada being the main driver of the region's growth in the quarter. The region now represents 4% of total revenue. This waterfall graph breaks down the different components in the P&L statements to display the development in operating income. Revenue is up year on year, but not as much as cost of sales, which has increased by EUR 39 million compared to last year.
Martin Öhman: The increase is, to a large extent, explained by change in revenue mix between B2C and B2B in the quarter, where we in this quarter see yet a step down in the B2B revenue as percentage of total revenue. Another impacting factor is increased revenue from locally regulated markets, and following that, increased gaming taxes by some EUR 28 million. Increased cost of services provided is, apart from gaming taxes, also explained by higher payment provider fees following increased B2C revenue. Year on year, gross profit decreased by EUR 9 million and amounted to EUR 181 million, which corresponds to a gross profit margin of 56% compared to 64% last year. Marketing spend increased by EUR 7 million compared to last year and corresponds to 15% of total B2C revenue and to some 20% when including affiliate marketing costs as well.
Martin Öhman: The increased marketing expenses are driven, as Pontus mentioned, by increased marketing activities in the Latin America region. Personnel expenses is more or less flat compared to last year, although increased number of employees and maintained focus on investments in product and platform development. Depreciation and amortization costs increased by some EUR 1.5 million year on year as a result of increased capitalized development costs and increased amortization costs following acquisitions and rebranding of some local brands to Betsson. Other items are slightly up year on year, where other external expenses increased due to increased costs for cloud technologies and software licenses. The increase is counteracted by increased capitalized development costs following more initiatives in product and technology development. Operating income amounts to EUR 46 million, a decrease of 31% compared to last year, but an increase of 9% compared to previous quarter.
Martin Öhman: The EBIT margin was 14.1% compared to 13.6% last quarter and 22.6% last year. Operating cash flow amounts to EUR 55 million compared to EUR 65 million in the same period last year. The deviation year on year is mainly explained by a lower operating income this year, which is somewhat counteracted by positive impact from changes in working capital in this quarter. Cash flow from investing activities sums up to EUR 75 million, where some EUR 59 million relates to the acquisition of Rhino Entertainment and remaining EUR 60 million to investment in own product and technology development. Cash flow from financing activities impacted the cash flow by EUR 4 million, explained by dividend paid to non-controlling interest and lease payments. Betsson has, as end of September, a net cash position of EUR 98 million and an equity ratio of 61%. Pontus, back to you to take us through the remaining part of the presentation.
Pontus Lindwall: Thank you, Martin. Now, let's look at how the Q4 has started, which I think has started quite strong, actually. The average daily revenue in the Q4 so far, including 18 October, has been 11% higher than the average daily revenue of the whole Q4 of the last year. During the start of the Q4 of 2026, the Sportsbook margin has been significantly lower than the average for the last eight quarters. Now, let's quickly sum up the highlights of the Q3 2026. We set new records in group revenue, Casino revenue, and active customers in the quarter. B2C continued to be the growth engine with all-time high revenue. The strong growth continued in Latin America, with revenue up more than 50% year over year. Our investments in products, brands, and marketing continue to strengthen our position in the region.
Pontus Lindwall: EBIT and the EBIT margin improved quarter on quarter versus the Q2. However, EBIT was negatively impacted compared to last year due to the revenue mix, higher gaming taxes, and a lower Sportsbook margin, which all led to a lower gross margin and dropped through to EBIT. The acquisition of Rhino Entertainment Group was completed in August and contributed to revenue and earnings for the quarter. We have seen a positive strong start to the Q4, with average daily revenue up 11% versus Q4 last year, despite a significantly lower Sportsbook margin than the historical average, indicating continued high customer activity. Thanks everyone for listening to the presentation. Let's move over to Q&A.
Operator: If you wish to ask a question, please dial pound key on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Nicola Kalinowski from ABG Sundal Collier. Please go ahead.
Nikola Kalanoski: Yeah. Hi, gentlemen. Just a few questions from my end. Firstly, I am a bit curious on the acquisition of Rhino. Could you perhaps help us understand how we should think about Rhino's geographical exposure today and maybe in the future? Is this acquisition also a way for you to diversify your B2B exposure geographically too? Or am I thinking about this in the wrong way?
Pontus Lindwall: Yes. As presented for the acquisition, we acquired mainly a Canadian B2C business from Rhino, but also several B2B assets, such as technology, which will be utilized over a variety of markets by B2B customers to us. In that way, it contributes to increased diversity.
Nikola Kalanoski: Yeah, fair enough. Just maybe related on Rhino. Was there any acquisition-related cost in the P&L in this particular quarter just to get a sense of whether your P&L was impacted by the acquisition just in terms of one-off costs?
Pontus Lindwall: Yeah, I am going to leave that to Martin.
Martin Öhman: Yes, there is some cost for that, but it is not material and it is nothing that sticks out. We have not mentioned that as a separate number.
Nikola Kalanoski: Yeah. That is fair. My final one. The performance in Latin was strong, to say the least. If we look at some news, however, related to the region, it seems like Chile has become a bit challenging. Have you been negatively impacted here? If so, what alternatives are you considering for this particular country, if you can comment that?
Pontus Lindwall: There are always things happening in certain markets. For all of you that follow the gaming industry, there have been changes and happenings in many countries in Latin America, but we have seen no certain happenings for the market that you mentioned that has any impact of material for us.
Nikola Kalanoski: Yeah. All right. That is fair. That is all from me. Thanks so much.
Pontus Lindwall: Thank you.
Martin Öhman: Thank you.
Operator: The next question comes from Martin Arnell from DNB Carnegie. Please go ahead.
Martin Arnell: Hi, Pontus and Martin. Good morning.
Pontus Lindwall: Good morning.
Martin Öhman: Morning.
Martin Arnell: Could we start just elaborating a little bit on the gross margin? Because despite you have revenues up, the gross margin is a little bit disappointing. Can you just go through the positives and negatives here and in a little bit of an outlook perspective?
Martin Öhman: We normally don't give any outlook, but we can comment a little bit more and give some more details on what we see in this quarter. We have seen for quite some time now that we are growing our locally regulated revenue, which come with increased gaming taxes. We have also seen a shift towards more B2C revenues rather than B2B revenues, so there's a mix effect in there. B2C revenues also come with payment provider costs. So what we have seen over quite some time now is a kind of negative shift in the gross margin. Whether that will continue depends to see in the future, but as of right now, this is kind of a mirror of the revenue mix that we have.
Martin Arnell: On that topic, what are you doing in order for this not to continue? What actions can you take? You talk a lot about product improvements. How are you implementing that in your B2B, and what hopes do you have that you will actually start to see growth soon in the B2B business?
Pontus Lindwall: Yes, we have communicated that our B2B business has stabilized, and we are very grateful for that. Of course, we are working hard now to make the B2B business grow even further because, as you said, it has a good impact for the profitability of the company. I also think that what we have seen over the past years, where we have increased the amount of regulated B2C revenues, is all expected. We know that these revenues come with a different cost structure, and we pay a lot of tax. We have all-time high in gaming taxes this quarter, amongst many other all-time highs. So this is no news to us, but we believe that we will be able to grow the B2B business as well going forward, which should have a positive impact on the gross margin.
Martin Arnell: Then on B2B and potential for growth, do you think if you are able to grow it, do you think it is mainly driven by new or existing B2B business?
Pontus Lindwall: The actual portfolio is quite diversified, and it would be tough to say that we do not expect any growth from our existing customers. We expect them to grow going forward, but we also expect to add on new B2B clients that can add to the growth.
Martin Arnell: The drivers of the growth, Pontus, just so I understand, it is both product and market, the normal structural drivers, or is there anything else?
Pontus Lindwall: No. Of course, our B2B clients, they will grow with the underlying growth of all the markets where they operate, and we will continue to serve them with good products, which will help them to be in good positions on the market where they operate. So it is a combination of everything that we do and also adding on, hopefully, new B2B clients on top of that.
Martin Arnell: Okay. Thank you. Just on your Casino revenue, which grew an impressive 14% in this quarter, can you give some more color on why that number was so strong so we can understand it?
Pontus Lindwall: Yes. As we mentioned in the presentation, it has been a lot of product development, as always, but that is not something that really stands out for the quarter. Of course, you can see in the activity figures from the quarter that we have a very high customer activity, and it also comes natural when the Sportsbook margin becomes a little bit weaker. Some money from some customers tend to find their ways into the Casino. So it is a combination of that. In a business like ours, it is very important for us to have a broad customer base and a lot of users. As you can see on the numbers for this quarter, it was all-time high with close to 1.9 million active customers. So that, of course, helps a lot in the Casino.
Martin Arnell: Yeah. Okay, thanks. Just a final question from me. Do you expect to keep those new actives that you have taken in to capitalize on them in the coming quarters with lessons learned from other major events in the past? Secondly, if you just could mention something about Brazil, your strategy there, and what do you think about it going forward?
Pontus Lindwall: Yes. We usually see after a big tournament like the FIFA World Cup, when we have a nice intake of customers, we see that we reach a new platform with the amount of active customers. Then again, not all customers that came in will continue to be customers forever. We have as most companies and most industry, a level of churn, but it is up to us to make as good as we can out of the customers that we have brought in now. So we expect to see continued high activity and high customer levels even going forward. On the Brazil side, we have stated many times that since regulation of the Brazil market started, we have been in the market, but we have also seen that it has looked a bit unstable. It has been very high competition on marketing side.
Pontus Lindwall: I think we use the expression that we are on the grandstand a bit and we watch it from the sideline. Of course, we have invested small amounts of money to be in the market, but compared to some other operators, it is not even comparable what we have done. I think we are in a good position where we did not take a hit from what has happened in the Brazil market, which was a ban of internet gaming, more or less, for you who do not know about that. Looking in the rear mirror, this is not something that we regret, that we have been careful in the market. It is actually the other way around. It puts us in a good position for whatever going to happen in that market going forward.
Pontus Lindwall: Our belief is that the market will not be closed forever as it is as of now, because there are no good proof in the market that is a great way forward. We think that the market will open up in one way or the other.
Martin Arnell: Okay, perfect. Thank you for all that.
Pontus Lindwall: Martin, you want to add something on that?
Martin Öhman: Martin, not on the Brazil, but circling back a bit to your previous question, Martin, regarding the gross profit. The items in the gross profit are rather fixed for us. Some of them are things that we cannot impact, such as gaming taxes, et cetera. But what we can do in order to leverage our operational model is increase the B2C revenue, which we have seen in the past quarters. That will then trickle down on the kind of scalability of other operational costs.
Martin Arnell: Perfect. Thanks for that clarification.
Operator: There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions or closing comments.
Pontus Lindwall: We do not have any written questions coming in here.
Martin Öhman: They have been answered.
Pontus Lindwall: Yeah, they have been answered already in the Q&A session as far as we can see. If there are no more questions, then thank you for listening in and see you next time. Bye-bye.
Martin Öhman: Bye.
Operator: The host has ended this call. Goodbye.
