Codere Online Luxembourg, S.A.

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Coderre Online second quarter 2022 earnings presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the conference over to Guillermo Lancha, Head of Investor Relations. Please go ahead.

Thanks, operator, and welcome everyone to Codre Online's training call for the second quarter of 2022. Today, you will hear from CEO Moshe Edre and CFO Oscar Iglesias. Before turning the call over to Oscar, I'd like to remind everyone that during this call, we will be referring to a presentation we uploaded to our website earlier today, which includes non-GAAP financial metrics such as net gaming revenue or adjusted VTA, for which you can find reconciliations in the appendix of the presentation. Finally, please note that a replay and transcript of this call will be available on our website at godadayonline.com, where you can also sign up for our investor email alerts. With this, over to you, Oscar.

Great. Thanks, Guillermo. And good morning or good afternoon to everyone joining the call. Before moving into details regarding the quarter, let me again remind you that Cordere Online is a Luxembourg-based and as a European company, our accounting information is prepared under IFRS accounting standards and our functional currency is the Euro. As such, throughout this presentation, all monetary figures will be in Euro unless expressed otherwise. Please also note that the historical consolidated income statements and considerable net gaming revenue and adjusted EBITDA figures have been moved to the back of the presentation. And we will be focusing on the quarter, year-to-date, and LTM figures in this and subsequent quarterly presentations, in each case versus applicable prior year periods.

With that, I will go ahead and pass the call on to Moshe. Thanks, Oscar, and thanks, everybody, for joining the call.

For those of you who are new to the company, I would like to provide a quick overview of Coderre Online. I joined the company in late 2018 when it was a wholly owned subsidiary of Coderre Group, which is a Madrid-based gaming operator over 30 years of retail gaming operation expertise in Spain, Italy, and Latin America. In November last year, we completed a merger with another listed SPAC, which resulted in Coderre Online being a U.S.-listed business and are raising over $100 million to finance our substantial opportunity we have had to grow this business, in particular throughout Latin America. Moving to the highlights of the second quarter of 2022, we are pleased to have delivered strong operating results in this period, with a net gaming revenue up to 41% to nearly 29 million zeros and 15% versus Q1 2022. This growth was driven by a significant increase in average monthly active customers to nearly 105,000 and a 10,000 increase in a monthly spend per active to 93 euros. Mexico again drove most of this growth in active customer with a 45% more in the period. In terms of customer acquisition, we continue to see encouraging trend as our first time deposit increased almost in 47% to 85,000 at an average cost of around 150 euros. Having now delivered two consecutive quarters of a strong performance, we believe that we are in a good position to meet our full-year guidance of 110 to 120 million euros of net gaming revenue. We expect that this growth will continue to accelerate as it did in the second quarter. Over the second half of the year, we're especially going into the fourth quarter where the World Cup should provide an additional uplift to our business. In terms of recent developments, In early August, we applied for an online license in the province of Cordoba in Argentina. This is the second most populated region in the country, and we believe that if we granted the license, it could be a very good market for us. We expect that the license will be granted before year-end, operation to start early next year. Finally, we took a significant step forward with our sponsorship with River Plate, becoming the main sponsor. Following our new agreement, we have rebranded their shirt with the Codero logo now being placed in the front, which will give us an increased visibility to improve our awareness of our brand in the country of course, Latin America. We also signed a sponsorship agreement with three Mexican baseball teams, Diablos Rojos, Sultanes, and Mariachis. Baseball is not only very popular in Mexico, but also a popular sport among our customers. who like to bet on both local league and U.S. major league, and we expect that these alliances will help us to continue enhancing our brand in the country.

With that, I will turn it again to Oscar. Thanks, Moshe.

Turning to the financial results for the second quarter, and as Moshe mentioned, consolidated net gaming revenue grew 41% to 29 million euros, driven by an impressive 85% growth in Mexico to nearly 12 million euros, and an equally impressive 12% growth in Spain to over 14 million euros, exceeding the levels we had prior to the regulatory restrictions that came into effect starting in May of last year. These restrictions impacted our advertising, sponsorship, and promotional activities, so we are encouraged to see the positive trend we mentioned last quarter for our Spanish business continue in this most recent quarter and beyond. Colombia also performed well in the quarter, with a 56% increase in net gaming revenues, and our remaining markets also contributed to the positive results in the quarter, especially Argentina, where we are currently only operating in the city of Buenos Aires. In regards to EBITDA, please note that this quarter we are adjusting for both a 0.7 million euro cash impact related to the cyber-related fraud that we described in our press release, and a 1 million euro non-cash provision related to our long-term incentive plans. As we discussed in last quarter's earnings call, the uptick in negative EBITDA versus the prior year quarter was primarily due to the higher levels of marketing and other operational investments to drive the accelerated net gaming revenue growth we are delivering and expect to continue delivering into year end. At the country level, the negative EBITDA generation in Latin America was partially offset by Spain, which generated 3.6 million euros of positive EBITDA in the second quarter. the highest level since the second quarter of 2020, despite the regulatory hurdles in place since last year. We have spoken with a number of you that are on this call and understand that you and the market in general are interested in having further information regarding our pathway to profitability in Latin America and overall as a company. We are expecting to be in a position to share additional information with you in our third quarter earnings call scheduled for mid-November. once we have finalized our operating plan and budget for 2023 and updated our expectations for 2024. In the meantime, please note that this is a business where we make a significant upfront investment to acquire customers, none of which may be capitalized, and which on average generates net gaming revenue of between three and five times that upfront investment over a five-year period. In terms of the payback periods on that investment, this varies market by market. That depends on how developed the market is and our strategic and financial objectives for that market. But generally, we see the contribution margin space payback of between one and two years. On a sequential basis, however, our EBITDA declined from negative 13 million in the first quarter to just below 10 million in the second, partially due to timing issues in regard to marketing investments we made in Mexico in the second quarter. As a reminder, A significant portion of our overall market is discretional. That is, can be increased or decreased at any time based on what we are seeing across our markets and our objectives as a company in terms of balancing higher growth with acceptable levels of cash burn, minimum levels of liquidity, especially concerning the current, considering the current challenging state of the capital markets. Turning to the Spanish operating and financial metrics, we see net gaming revenue in the second quarter increase 12% versus the prior year quarter, despite having 4% fewer active customers as a result of the promotional restrictions in place. On an LTM basis, we are 2% below in revenue levels, with 6% fewer average monthly actives in the period, reflecting the higher spend per active on the back of improved results, especially in our online casino business. In Mexico, meanwhile, net gaming revenue reached 12 million euros in a quarter, an increase of 85% year-on-year and almost 20% sequentially. This strong performance is supported by both a higher number of active customers and a higher spend per active. In regards to our omnichannel activity, our online business benefits from Godere Group's leading retail presence in the country and sizable customer database. which allows us another channel to acquire customers, offer them a differentiated omni-channel customer experience, and improve our overall return on investment in the market. Moving to Colombia, we continue to see strong growth in the market, with a 57% increase in net gaming revenue and 37% in number of actives. This continues to be a small business for us, but one that we expect to continue growing with an improved return on marketing investment. Turning to the balance sheet, as of June 30th, we had approximately 80 million euros in available cash on the balance sheet, having utilized approximately 11 million euros in the first half of 2022. In terms of our network and capital position, we ended the second quarter at negative 26 million, a quarter in which we did some catching up in regards to payable with third party providers. So we continue to be a few million extended in terms of payables to go to the group, which we expect will be addressed here in the third quarter. On page 16, you have further details regarding the cash flow statement and the variation in net working capital in the first half of 2022. Please note that we have changed the way that foreign exchange impacts on cash balances are reflected. This is now included in the reconciliation of cash position located at the bottom of our cash flow statement as opposed to reflected as cash flow from financing. That's all from my end. I will now hand it over to Moshe for closing remarks.

Thanks, Oscar. I just want to stress again how pleased we are with the second quarter results, which in many ways has been ahead of our expectations and which gives us confidence that we are on track to deliver our guidelines to investors for the year. We continue to encourage by the potential of this business, and we're working hard to execute our plan and beginning to explore other exciting opportunities that may present themselves, like the one we're currently pursuing in the province of Cordoba. With a strong first half of the year now behind us, we hope investors will share our view that the ambitious growth rates we set out to reach of this business are achievable and that Coderre Online provides investors with a unique opportunity to invest in early innings of one of the fastest growing regions for online gaming. We look forward to speak with you again in November when we'll publish in our third quarter results. With that said, we'll turn it back to the operator to open up the call for Q&A. Thank you, everybody.

At this time, if you would like to ask an audio question, simply press star followed by the number one on your telephone keypad. Our first question will come from the line of Jeff Stanchel with Stiefel. Please go ahead.

Hey, good morning, Moshe and Oscar. Thanks for taking our questions. I wanted to start off on customer acquisition trends in the quarter, if possible. You know, you discussed CPAs came in around 150 euros per customer acquired. Looks like that's a nice sequential and year-on-year decline. Something you might just unpack that a bit more as we had contemplated more of a 200 euro or so run rate moving forward. And then as a follow up to that, aggregate marketing spend was down sequentially, both in nominal terms and as a percentage of revenues. Should we expect Q1 to be the peak in terms of marketing investments and EBITDA losses? Or is some of this just sort of natural ebbs and flows as you execute on your marketing plan?

Yeah. Moshe, do you want me to take that one? Yeah, take it, and I will jump in if there's anything to add.

Jeff, I think you picked up on something that clearly jumps off the page in terms of the trend from Q1 to Q2 in terms of the blended group CPA and some of the marketing spend. Some of this is, I would say, largely that's driven by some of the timing issues that I alluded to in my prepared marks, specifically in Mexico, where toward the, let's say, the back half of the second quarter. We took our foot a little bit off the pedal in terms of some of the line marketing that doesn't necessarily have any immediate impact in terms of the top line revenue that we deliver. But it did, let's say, distortion a little bit that blended CPA that you're seeing in terms of the acquisitions that we delivered in the quarter on a blended basis. But that's driven primarily by timing issues. I think that some of that investment that we didn't do in the second quarter, you'll see when we come back to the market in the third quarter, what will have been made. And as you say, the 150 is, I think, our expectations this year in terms of a blended across all our geographies. Average cost of acquisition for this year was probably closer to the 200 per acquisition as opposed to the 150 that you saw in the second quarter. So I think it's largely timing differences. Moshe, anything to add on that?

No, the way that we are calculating the CPA obviously depends on a lot of changes between the proportion that we spend above the line and below the line, and that's why there's some changes that we see, some kind of moving parts in the cost of CPA. But I think that the main factor is that we are keeping the ratio between the lifetime value and the CPA, meaning that if the CPA will go higher, we'll make sure that the lifetime value of the group of the players will go higher. And then what we can do, we can just monetize in between the spend that we have between any channels below the line, which is mainly digital cost per click in different platforms with Google and Facebook and so on, or TV advertising.

So we are monitoring that upon the results. Great. That's helpful.

And maybe just to kind of reiterate the second piece of that question, the aggregate marketing spend was off 10% or declined 10% or so quarter on quarter. the percentage of revenues was down considerably about 20%, you know, went from 90 to 70% of net revenues. Is that mostly timing, you know, with Mexico or is some of that kind of sustainable declines in your reinvestment rate as you, you know, continue to mature along in your marketing plan?

Yeah, I would say a significant part of that is timing difference. As Moshe says, that there's always, adjustments that are made within any given market between above the line and below the line, but also across markets, depending on what we're seeing at any given time and how the players that we're acquiring are performing in those early months after acquisition. So there's a mix of both, but I would say largely it's timing differences. I guess in the front half, we did a minus 23 million in terms of, let's say, an adjusted EBITDA of 13 in the first quarter, a little under 10 in the second. I think looking out to the back half of the year, I think the quarterly trend will be something closer to what we did in the first quarter than necessarily what you're seeing in the second that benefited by some of that reduction in marketing spend, Jeff.

Great. That's helpful. Thank you, Oscar. Moving on to more of the competitive landscape, if you look at the two largest Latin American markets, Mexico and Colombia, Just what are you seeing in terms of new competition coming in or existing competition ramping up or down investment in those two markets? And then similarly in Spain, are you starting to see some stabilization of competitive dynamics or does it feel like operators are still pulling investment there in light of some of the well-discussed regulatory challenges?

So, Jeff, in Spain, we do see some reduction in competition as a result of the advertising ban. small brand or a non-brand or international brand find it more and more difficult to build any market share without any opportunity to invest in marketing or in advertising except the post midnight between 1am to 5am which is not like a big portion of anyone's budget so we see that there we either maintain or even like growing our market share but definitely we're growing our voice of shares in terms of the brand itself. In Mexico, it's a bit different. We saw that at the beginning of the year, there was kind of like a trend of a small, medium operation enter to the market. We knew and we expected that in time, they will see that it's not milk and honey to enter to such a complicated market in terms of processing, regulation, licenses, and so on. And then, obviously, the competition with Caliente and Bet365 and Coderic. So we saw that some of them withdrew after they were burned in spending. Rushback is getting now to the market. We saw, again, that they started very strong. Then they reduced their marketing. Our main competitor still is a local brand. Obviously, in Mexico, it's Caliente. They just extended now. I don't know if it's been announced or not, but they're a private company. But they extended their sponsorship with America. So it means that they feel our competition quite well so they are keeping their either existing sponsorship or they're looking for a new sponsorship but as we mentioned in the presentation having both Rayados and both the baseball team and both other activities that we're doing and having Real Madrid as our main sponsors in Latin America we believe that we're not just building our brand over there but together with the omni-channel strategy and the retail exposure, we are building slowly, but as we planned our market share in Mexico. So we don't see, like now, any changes in that landscape. Same with Colombia. In Argentina, on the other hand, we think that we have a very good opportunity to be one of the market leaders because we do have Escudero. We do have the retail presence. although it's in the province, not in the city, but we're working to see what we can do in the province as well in terms of license. But we believe that together with Cordoba, as we mentioned in the presentation, having like the province of Cordoba, hopefully that we'll get the license and with the city and maybe later on with the province, we'll cover like a very high percentage of the country in terms of the exposure. And we believe that there we'll have the opportunity to be, if not the market leader, one of the first three market leaders in the country.

Great.

That's really helpful. Thank you, Moshi. And then if I could just squeeze in one more on the technology front. You've been vocal that a portion of the IPO proceeds were earmarked for some upgrades to the tech stack. Could you just provide an update on where you are at in terms of some of the more discretionary improvements and what's still left to complete moving forward?

Are you referring to the platform itself? Correct.

Right, so as you obviously know, in Mexico we are working mainly with Playtech as the main software provider, although we had a lot of different processing vendors and different contents that we initiate and we asked Playtech to integrate into the platform. We just finished with Playtech a very big software upgrade of nine specs in last month. It was quite a complicated one, but it brought us to the level of, I would say, our main competitors in terms of all, I would say, the content and the cashier capabilities and the processing capabilities, cashing in, cashing out. So we are aligned with any other major competitor that we have in terms of the platform. In regards to the other markets that we are maintaining and we are managing the platform with Coderre's group, which they are the platform provider for Coderre Online, we see strong improvement. We keep investing in that. As we mentioned in the presentation on the roadshow, we allocated budget for the software improvement. Thankfully, in the past, I would say, six months, We are not suffering from any major down times, and again, we are an industry standard, like a first-tier industry standard in terms of the SLAs. Obviously, we have a great advantage by managing our own IP in terms of emuligating the software, like in the city of Buenos Aires, like hopefully we'll have to do in the province of Cordova, like we've been in Colombia and in Panama. So all in all, we are satisfied, although we keep investing in improvements. At the same time, we started in a very low level, a big project that's called the Platform 2.0, which evaluates and has an overall, I would say, thinking about where are the areas that we can either replace, improve, integrate, or buy any other IP in order to bring us to the next level of platform. So just to summarize it, I mean, in Mexico, we're quite happy with the turnkey solution that we have from a third-party provider. The rest of the countries, we're in a good stage. There's always things to improve on the cashier side, on the player experience. We just launched last week the Android app in Colombia. Colombia is a very challenging environment in terms of the regulator of And in terms of emulgating the software, we managed to do so. We're doing it quite well. So all in all, I think that me as the main, I would say, client of the platform, I'm happy with what we achieved, but there's still investment in the pipeline for the next quarter.

Perfect. Very helpful, as always. Thank you both. I'll pass it on. Great.

Thanks, Jeff.

Again, to ask a question, press star 1 on your telephone keypad. Our next question comes from the line of Michael Kopinski with Nobel Capital Markets. Please go ahead.

Hey, this is Pat McCann for Mike Kopinski. I had a few questions. First, I just wanted to touch on the inflationary environment. Are there any higher costs associated with your expansion strategy that are causing you to make any tweaks with your strategy, anything that you've really changed with how you're expanding the business associated with the inflation?

Yeah, hi, Pat.

Look, I think at a very high level, there are different parts of the cost structure that obviously are more impacted by the inflationary pressures across different jobs. geographies than others, but we would typically expect it's not always the case, especially given that we're coming off several years of COVID and economic impact on some of the geographies that we operate and somewhat weakened disposable income from certain pockets of our customers. It's not always easy to see that and to manage around and compensate through pricing. So pricing is largely, it varies market by market. but is largely governed by the competitive landscape and where you're positioned within that competitive landscape and what your competitors are doing. So it's not always possible, nor necessarily advisable, that it's not a sector where we can necessarily just pass on that additional cost to our customers. And we have to be mindful also of that customer experience and the impact that the economic environment has on our customers to keep them to keep them playing, but playing at a level that allows them to continue to be engaged with us as a company. So our focus is really on consolidating more of their overall play with us as a group as opposed to necessarily looking to drive higher revenues near term from those players to offset different impacts that we're seeing in certain aspects of our cost structure. It's a very high level but kind of generic answer, but I think it's a complex one, especially in the context of of this market or this business where pricing is really managing around theoretical holds across both sports and the casino front.

Gotcha. Makes sense. I have another question about Brazil. I know that things get delayed and everything, and maybe to some extent it's a watch and wait situation. Could you provide any commentary you might have on the situation there and what your expectations are with that being such a large market opportunity when it does come online?

Yeah, Pat, hi. I will start, Oscar, if you have anything to add, just jump in. So, yeah, Pat, look, from the last call that we had, again, that question was asked, and we envision internally that the decree, the bill will not sign and that it will not be regulated in this quarter or the next quarter. So therefore, we decided at the moment that we will not enter to Brazil on the dot-com license. We will wait for the full regulation to happen. We are following closely, I mean, with lawyers, with advisors, to see what is the landscape. Obviously, we appreciate that, like any other Latin American operator, to be one of the biggest and the most interesting market for us. We started in a very, I would say, low level to search for potential channels that we can enter, want it to be regulated, meaning to build our position slowly. We do have strategy. We do have strategy to initiate local operation, want it to be regulated. We do have the capability and the capacity in terms at least of knowledge and people that can work in Portuguese and to, I would say, translate and to migrate the software, the Coderre software, to work in that region. Obviously, when time comes and it will be regulated, then there will be the question of financing because it's a huge market. We assume that the big brands that are already operating, such as Bet365 and 888, they will just increase their marketing spend I want it to be regulated so that we need to be prepared to see exactly how and in which position we enter into that market and in which part of Brazil. Brazil is a huge country. Maybe we start with some areas and not with the whole overall continent. So, again, we have it on the, I would say, the blueprints. It's still on the stage of growing and preparing things. We didn't do anything to start any operation on a dot-com level.

Great. Thank you so much. That's all I have. Congrats on a great quarter. Thank you. Thanks, Pat.

Your next question will come from the line of Mike Hickey with the Benchmark Company. Please go ahead.

Hey, Moshe. Oscar, good morning, guys.

Great quarter. Thanks for taking my questions. You bet. The... I guess as a follow-up to the question on inflation, I'm not sure I heard you exactly, but on your consumer, obviously you serve a lot of different geographies, but on your consumer as you see them today, as you serve them today, are you seeing any impact on that consumer given economic inflation sentiment? Are you seeing any direct impact on their spending behavior?

Moshe, do you want to tackle that in terms of what we're seeing from an operating standpoint in terms of generically across our markets, maybe player spends, what we're seeing in the unit equity players?

Yes. Well, at the moment, we don't see any real impact of the inflation or the macroeconomy trend. in terms of the spend. We don't see that spend per customer is going down. On the other hand, since during 2020 and 2021, there was inflation already on the advertising channels cost. So we don't see any real increase in cost in 2022, in the first six months of 2022, meaning that The advertising and the different media vendors that we are working with, up until now, did increase prices, thankfully. If any, I start seeing some mitigation in the cost of the sponsorship, and hopefully we'll soon have some other deal of sponsorship to announce, that we see that since some of the competitors are finding it hard to struggle and to sponsor some of those media channels. Not necessarily, by the way, from the gaming, because the media channels that we're working with, having other sponsors from other areas, and they are struggling to invest money and to spend money on advertising. So there's some mitigation at that cost. So we see even prices that are either stable or even in some cases going down a bit.

But in terms of the player spend at the moment, we don't see any changes. Thank you, Moshe. You mentioned profitability.

Obviously, that's a narrative all operators are working to achieve now, given the environment, if they're not already there. And I realize you're probably not in a position to say that after 3Q, you'll probably give us more visibility. But can you sort of talk about puts and takes on how you sort of think about rewiring your business to potentially accelerate profitability given capital restraints and everything else challenging the market that you're in. And I guess maybe as a lead into that, when you look at staying in particular, obviously that's a combination of both growth and profit for you. Do you expect a continuation be pretty critical to achieving profitability in 23-24, and then anything else you want to add, that'd be great.

Yeah, maybe I'll take it, Moshe, if it's okay, I'll take the first one, and then if you want to speak to Spain. Mike, I think that the key here is, as you say, that we need to get through war. We now have two full quarters plus a couple of months under our belt, post-business combination. We need to work through, which is already a process that's underway, our preliminary numbers for our 23 budget and our estimates, our re-forecast for 2024, and see what that tells us in terms of that trade-off between growth and cash burn, and see if from there, as a company, we feel that we need to make any adjustments, especially in the context of some of the new opportunities that are presenting themselves. that have already, that we've already discussed with the market, others that we're working on and others that will present themselves will also govern what we do across the individual core markets and how that may or may not affect, let's say, that core market plan that we brought to the market last year and that we've been speaking to and that continues to be reflected in the revenue walk that we have in the back part of our presentation. So I think today we have no indication or no view that the plan has changed at all versus what we set out to do. What we are trying to communicate after this second quarter to the market is that we've executed along that plan and that we're going to obviously in the context of we're mindful of the market conditions, where the capital markets are, how the shares are trading. But we continue to see the market opportunity across our core markets and some other things that we're taking a look at as great opportunities. and where there's lots of room to grow. And I think that our focus is going to continue to be the same, even if around the edges we start tweaking some of the priorities across existing and new markets.

Moshe, do you want to touch on this? Yeah. Sorry, Oscar.

Excuse me? Do you want to speak to just Spain, how you're seeing Spain in terms of the capacity for the for us to continue building off the positive results that we've seen in the last couple of quarters in the back of regulation?

Yes, so as I mentioned in the previous questions, in Spain, although it's extremely challenging to acquire more customers because of the advertising ban and very few advertising channels, we are working now towards, I would say, creative regulated channels that will allow us to increase exposure. At the same time, we are enhancing our omnichannel and cross-channel activity and I would say operational activity on the ground in order to increase the acquisition toward the retail side. I think that in Spain will happen two things. I think that we see the trend of reductions of competitors toward next year as well. We know already that the mid-small size operators are struggling to operate without any new, I would say, new customer database and therefore they decrease any other digital spend in that sense, on the PPC side and the affiliate side, on the SEO side, the search engine optimization. At the same time, we see that, again, our voice of share of the Brent is slowly but surely toward, I would say, the double-digit percentage of the market share. So that's a good trend. So we believe that the positive EBITDA will remain the same in the next quarter as well.

Nice. Good to hear. Last question.

definitely I think more longer term focused and Oscar probably not helping you but you know originally you guys sort of targeted the US market sort of long term you know sort of into the baseball game maybe but just curious obviously there's a lot happening in California and You know, California has about 16 million Hispanics and Latinos. And so it looks like that could be a really strong market extension of your brand to sort of enter the U.S. So obviously we don't know at this point if they're going to legalize or not. But if they do, if they are successful, legalizing sports betting in California and given the demographic that is certainly, I would think, a compelling entry spot for you, given your player and brand base. You know, is there an opportunity for you to enter the U.S. market through California 23-24? Thanks, guys.

Yeah, so for sure. I mean, I think that the same answer that applied to Brazil. I think that it's the same answer probably that we have for California or any other state that has like a big presence of Latin American population. We, as a public company, we're looking for moving like a very, you know, big bricks into the business and to have like a very big alliances. And we think big and we think for a long term. and definitely beyond Latin America, North America, this is the market to be. We know and we appreciate the size of the market, the capabilities, and the spend per customer based on those that are already operating in New Jersey and so on. But again, I mean, us as the operational side of the business, we are very much focused to bring the business to the point that, as we mentioned before, to be profitable, to deliver the forecast that we promised to our investors. We are very concentrated at the moment in Mexico, Argentina, and Colombia to grow our presence over there. Once those markets will be regulated, I mean, either California or Brazil, but refer to your question about California, I think that the right way for us to do some sort of an M&A deal in those markets, we will bring to the table, obviously, the operational capabilities, the branding, I think being a main sponsor for Real Madrid, and River Plate, and Riyados, which has a very big, I would say, customer-based supporter in those countries, in California and in Florida, for the Mexican League and the Argentinian League, and for the Spanish League, obviously, on the sports betting. I think that that by itself is a very strong entry level from the brand side of Codera. And then what we'll need is probably to do some sort of financial transaction or any, I would say... a transaction that will be related to a license holder. And I think that we have a very strong opportunity to win to those markets. But still, we have to see that first it's been regulated. We need to see that we are finishing this year with the right performance, and then we'll look forward.

We are very focused at the moment of what we're doing. Thank you, guys. Good luck. Thanks. Thank you.

Again, to ask an audio question, simply press star 1 on your telephone keypad.

In the meantime, I will ask a couple of questions that we have on the webcast platform. The first one is on Q2 performance in Mexico and if it was helped by any COVID-related restrictions that we had on the retail side that may have played to the advantage of online.

That was more, I think, that was more related to the second quarter of last year. I mean, this year we didn't have any restriction, I think, if I'm right, Oscar, on the retail side from the COVID. I think that the retail is open more than six months. Is that right?

I think that's right. I think that's right. I think the retail operations largely were up and running and on performing, and I think that in the second quarter of 2022, if that was the question, that we necessarily got much of a benefit from the COVID impact on the retail business.

Okay, one final one on the webcast. Can you comment on the terms of the Cordoba license? Will the 10 licenses be awarded to the different applicants?

Yeah, I can take that one. I mean, it's a good question. We'll see how the process evolves. We submit our application the 5th of August. In theory, something back in the early part of this month. I believe it's in the public domain, but we understand that one of the 10 applicants didn't have their second envelope opened, which we understand that they wouldn't have met the technical criteria for the applications. But I think we have no reason to believe that we as one of nine or 10 requesting up to 10 licenses wouldn't be granted a license, but we have to continue in the process, see how it evolves. It'll probably unfold over the next couple of months and we'll see where we are from there. But in our mind, we're preparing to be up and running and operating into next year and starting to think about how we include this business and the priority we give it

into our 2023 budget and beyond. Okay. So we have no more questions on the webcast. So I think we can... Operator, any other questions from the callers?

Not at this time.

Okay. Well, if there are no further questions,

We will leave it here. Anyone feel free to reach out to myself or Oscar for any additional questions.

And we look forward to speaking with you again for our Q3 results in NIDMA London. Thank you. Thanks, everyone. Thank you, everybody.

Ladies and gentlemen, this will conclude today's presentation. Thank you all for joining.