Cirsa keeps 2025 profit targets as online gaming surges 120% after IPO

Spanish gaming firm Cirsa reaffirmed its full-year 2025 earnings guidance, targeting €740M-€750M EBITDA and €2.28B-€2.33B revenue, after reporting robust first-half performance with 11.9% revenue growth. This momentum was primarily fueled by its online gaming division, which saw revenue jump 63% and EBITDA surge 120%, effectively offsetting foreign exchange headwinds and slight declines in its casino segment. The company also reduced its net debt to EBITDA ratio to 3.2x, reinforcing its consistent profitability and strategic positioning for continued growth, as highlighted by Jefferies' assessment of its long track record and acquisition potential.

Analysis

Cirsa has reaffirmed its full-year 2025 guidance, projecting EBITDA between €740 million and €750 million and revenue of €2.28 billion to €2.33 billion, figures that align with analyst consensus from Jefferies and FactSet. This confidence is underpinned by a robust first half, where revenue grew 11.9% year-over-year, driven by exceptional performance in its online gaming and betting division. This key segment saw revenue increase by 63% and EBITDA surge by 120%, fueled by strong organic growth and the successful integration of recent acquisitions, Apuesta Total and Casino de Portugal. While the group's overall H1 EBITDA margin slightly compressed to 32.3% from 32.9% due to the mix shift toward lower-margin online operations, profitability remains stable. The company's financial health is strengthening, evidenced by a reduction in its net debt to EBITDA ratio from 3.7x to 3.2x. This deleveraging, coupled with a consistent history of 67 consecutive quarters of EBITDA growth (excluding the COVID period), positions Cirsa as a resilient operator. The performance of the traditional casino segment, which saw a 1% decline in revenue and EBITDA, was primarily attributed to a 6% foreign exchange headwind that offset 5% organic growth, indicating the underlying business remains sound.

Key Decisions for Investors

• The combination of reaffirmed guidance, significant deleveraging, and hyper-growth in the online segment supports a constructive outlook, justifying consideration of the company's consistent execution and strategic M&A.
• Investors should monitor foreign exchange fluctuations, as they are currently masking underlying organic growth in the casino division and could provide a tailwind if they reverse.
• The slight EBITDA margin compression should be monitored as the online business scales, but Jefferies' analysis suggests group profitability remains stable, and future bolt-on acquisitions should be viewed as a core part of the established growth strategy.