Good morning everyone, and thank you for joining us for our full year 2025 results. As always, I will begin with a brief overview before handing over to Chris, who will take you through the financials and the outlook. I will then update you on our progress against our strategic priorities. 2025 was a year of strategic transformation for Playtech and one that went better than we'd expected. We successfully completed the sale of Snaitech, revised our agreement with Caliente Interactive, and transformed Playtech into a highly focused B2B technology business with a portfolio of valuable assets. Adjusted EBITDA reached EUR 197 million, around 20% ahead of market expectations at the start of 2025. This performance was underpinned by strong momentum across the Americas and material investment income from our equity stakes in Caliente Interactive and Hard Rock Digital.
We ended the year with net cash position of EUR 29 million, reinforcing the strength of our balance sheet, which gives us flexibility to invest behind growth opportunities and consider further shareholder returns. As a simplified group with strengthened foundations and clear levels in our key markets, we move into 2026 with confidence on track to deliver 2026 full year adjusted EBITDA ahead of market expectations while continuing to make progress towards our medium-term financial targets. I will now hand over to Chris.
Thanks, Mor. On to slide five, please. As we communicated at both our full year 2024 and our H1 2025 results, these financial results for 2025 reflect the impact of the revised Caliente Interactive agreement, which came into effect on April 1st, 2025. As a brief reminder, as part of the new agreement, we no longer receive the additional B2B services fee, which is now removed from revenue and direct costs. Instead, Playtech now recognizes its 30.8% share of income from associate from Caliente Interactive within adjusted EBITDA, with dividends flowing into free cash flow. This rebases our reported revenue and affects both adjusted EBITDA and free cash flow but introduces a more aligned recurring investment income stream.
These impacts are particularly noticeable in the year-on-year comparatives given the new agreement came into effect on the 1st of April, 2025, but will normalize going forward. Now on to the highlights. I'm pleased to report good financial performance of the group with adjusted EBITDA reaching EUR 197 million, around 20% ahead of market expectations at the start of 2025. Outside of the rebasing of numbers from the full year 2025 to reflect the revised Caliente agreement, underlying revenue and adjusted EBITDA were impacted by regulatory headwinds in Colombia and Brazil. However, overall, the group performed strongly in the Americas with significant investment income contribution from Caliente and Hard Rock Digital. Together, these accounted for the vast majority of the EUR 62 million of adjusted EBITDA from investment income, highlighting the value in our strategic investments.
Free cash flow improved materially in the second half of the year, supported by growing investment income distributions. For the full year 2025, free cash flow is down compared to the reported 2024 figure. However, this comparative includes the impact of Caliente under the previous agreement. When normalizing for this, the starting point was broadly break-even free cash flow for 2024, and as such, our 2025 result shows significant progress. At the same time, we maintained a strong balance sheet, finishing the year in a net cash position even after repurchasing 8.3% of our equity capital in the second half for a total of EUR 77 million. On to the next slide, where we will look at our B2B revenue performance.
Reported B2B revenue was EUR 688 million, down year-on-year due to the impact of the revised Caliente agreement. On an underlying basis, regulated B2B revenue grew 6%, reflecting very strong momentum in the Americas. U.S. and Canada delivered over 70% growth in constant currency, driven by continued wallet share gains with tier one operators and strong performance across live, casino, and the PAM+ verticals. In Latin America, underlying revenue grew 8%, despite the impact from Colombia VAT headwinds and Brazil's particularly stringent transition to a regulated market. Europe ex-U.K. performance was driven by strong growth in Poland and Spain, offset partially by the impact of higher hardware sales in the prior year. The U.K. was impacted by tougher regulatory backdrop and certain customer specific changes, including the previously communicated insourcing of self-service betting terminals by one operator.
Elsewhere, rest of the world delivered strong double-digit growth, driven primarily by strong performance in South Africa. Revenues from unregulated markets declined year-on-year as expected, due to the reclassification of Brazil into our regulated reporting segment. Turning to slide seven. B2B costs increased modestly in 2025, reflecting continued investments in areas where we see strongest potential for long-term returns. In particular, the live vertical, where we continue to invest in expansion by increasing capacity in our U.S. studios, which accounted for the majority of the increase in live costs. We also added new tables in Peru and opened our studio in São Paulo to support our growth in the Americas. During the year, we absorbed higher G&A expenses, primarily reflecting certain non-recurring costs, professional fees, and advisory costs, including some legal expenses.
Looking ahead, we will continue to manage costs carefully, focusing investment on our areas of strategic priority, particularly in the Americas and live, while preserving efficiency and driving operating leverage over time. On to the next slide. Following the sale of Snaitech, our B2C operations now represent a much smaller part of the group. Happybet is considered non-core, and in 2025 we took decisive steps towards winding down the business, which is now nearing completion. Given the changes to the U.K. gambling tax framework, we have commenced an operational review of Sun Bingo to assess its long-term prospects. Our actions across B2C reflect our focus on building a more streamlined operating footprint. On to the balance sheet, looking at our net debt bridge. We began the year with net debt of EUR 143 million.
The largest cash movements in the year were the EUR 2.3 billion proceeds received from the sale of Snaitech, the payment of EUR 1.8 billion as a special dividend to shareholders, and the repayment of the remaining EUR 150 million of our EUR 350 million bond that matured in March 2026. That leaves the group with a single EUR 300 million bond maturing in June 2028. In addition, we repurchased 8.3% of our issued equity capital at an average price of EUR 2.67 per share for a total of EUR 77 million, which should limit future dilution from employee share plans, including the PTP.
As a result of various cash movements outlined, we ended the year in a net cash position of EUR 29 million, supported by a fully undrawn EUR 225 million revolving credit facility, which together demonstrates the strength of our balance sheet, even after the substantial capital returns through the special dividend and share buyback. Looking ahead, we have a number of remaining liabilities related to the Snaitech sale, totaling approximately EUR 90 million, of which around EUR 70 million will be settled in 2026 and EUR 20 million in 2027. Including these upcoming outflows would imply a pro forma net debt position of around EUR 60 million for the group. Next slide, please. Let me briefly take you through our capital allocation policy. As a reminder, we maintain our previously communicated net debt to adjusted EBITDA target of one-two times.
Our balance sheet remains strong, and while we have a lot going on in the business, I want to put a policy in front of you now in terms of how I think about capital allocation. We look at it in three buckets. The first of which is growth. We continue to prioritize organic investments into priority product verticals, namely live casino, as well as in the high-growth geographies across the Americas, including the U.S., Mexico, and Brazil. A key part of our framework is our early-stage investments via structured agreements, where we typically partner with local heroes ahead of regulation and as a result, directly participate in the future upside. This approach has proven to be hugely successful through our long-standing success with Caliente Interactive and more recently with Hard Rock Digital.
The second bucket is maintaining flexibility for less predictable events, including M&A and regulatory or tax changes. We remain open to selective M&A opportunities, particularly those aligned with our ambition to strengthen Playtech's position as the leading B2B technology provider. As well, we need to remain flexible given the uncertainty of our industry, as highlighted by recent events such as regulatory and tax changes we have seen in various markets in recent months. We also need to maintain flexibility for contingent liabilities, including earn-out payments on existing ventures. Finally, shareholder returns. We returned EUR 1.8 billion to shareholders as a special dividend following the Snaitech sale in H1, representing a return greater than our market capitalization earlier in the year prior to the deal announcement. We also returned EUR 77 million in H2 in the form of share buybacks.
We intend to continue returning capital to shareholders going forward. The capital we retain beyond the first two buckets I mentioned of, one, investing in growth and two, maintaining flexibility, is what we will consider to be structurally surplus capital. We intend to return this surplus capital to shareholders going forward. This should also grow over time as we generate increasing free cash flow, as I discussed on a previous slide. Going forward, we will review returns, including dividends and buybacks, in line with this policy. Turning to slide 11 and our levers to get to our medium-term financial targets of EUR 250-300 million in adjusted EBITDA and EUR 70 million-EUR 100 million in free cash flow. In 2025, we've made a number of important steps towards these goals.
Starting with the U.S., we have seen strong performance across our live, casino, and PAM+ verticals, as well as good progress with Hard Rock Digital. The outlook is encouraging with a healthy pipeline of new commercial opportunities across our products and services, and we will be profitable on an adjusted EBITDA basis in 2026. Last year, I said we have around EUR 20 million of losses at the EBITDA level and around EUR 25 million at the cash flow level from underperforming businesses. These figures have improved somewhat year-on-year, but more importantly, we have taken decisive action to address some of these units with the wind down of Happybet now nearing completion and the IGS business now classified as an asset held for sale. At the same time, we continue to capture growth from regulated markets, namely the Americas and selected European jurisdictions.
We are investing to further improve and innovate our key product verticals while consistently realizing the benefits of our revenue share business models and the attractive economics within our structured agreements. Partnerships with leading operators remain a core competitive advantage, and we are particularly pleased with the momentum we are seeing with Caliente, DraftKings, and Hard Rock Digital, among others. Collectively, these levers, coupled with continued focus on cost efficiency and our efforts in addressing underperforming business units, will drive operating leverage over time. We remain extremely confident in achieving our medium-term adjusted EBITDA and free cash flow targets. Next slide, please. Finally, I would like to update you on our 2026 trading so far and the outlook. We've had a very strong start to the year, particularly across the Americas, where we continue to see sustained demand in both the U.S. and Mexico.
In the U.S., the strong activity we saw in Q4 has continued into the new year, and we are encouraged by the healthy pipeline of upcoming launches. In Mexico, Caliente continues to perform strongly, and we expect to see further uplift from the 2026 FIFA World Cup, where Mexico is a co-host nation and the games will be on a local time zone. This is a once in a generation event that will significantly boost visibility, engagement, and betting volumes. Reflecting the strong start, we now expect to deliver full year 2026 adjusted EBITDA ahead of current market expectations, despite the regulatory headwinds across some of our markets. We expect 2026 full year CapEx, including capitalized development, to be in the range of EUR 90 million-EUR 100 million, with the increase compared to 2025 due to our expansion plans in Brazil.
We expect the group's effective tax rate to be approximately 25%-28%. Finally, as I highlighted earlier, both management and the board of directors remain confident in Playtech's ability to execute our strategy and to deliver our medium-term financial targets of EUR 250 million-EUR 300 million in adjusted EBITDA and EUR 70 million-EUR 100 million of free cash flow. With that, I'll now hand back to Mor to cover our strategic priorities.
Thanks, Chris. I will now take you through our investment case, strategy, the progress made so far, and our ambitions for the future. First, a reminder of how we capture value across the value chain. Our wide product offering gives customers access to best-in-class operational expertise. This is how we have supported local heroes and helped them to grow into market-leading operations. Outside of our strong live offering and casino content, we have a very unique selling point, our 25+ years of data from our customers. We also have a multi-decade expertise, which we translate into a services offering that supports the optimization of our products and for our customers. With our regulatory expertise and market-leading safer gambling tools, there is no other player in the market that offers solutions across the entire value chain. Now to our investment case.
For those of you looking at our story after some time, we are now a simplified business. Playtech today is a high-growth, predominantly B2B technology business, serving over 200 customers across more than 50 regulated jurisdictions and providing mission-critical infrastructure to many of the world's leading gambling operators. We are recognized for delivering market-leading content and platform technology through value-accretive business models across some of the fastest-growing regulated markets globally. We also partner with many of the world's largest and most influential brands, from local heroes such as Totalizator, SNAI, and Sisal, to major global operators, including Flutter, Entain, and bet365. Our multi-decade experience supporting B2B customers enables us to identify opportunities early and invest selectively, directly, and via our structured agreement framework. Through this strategy, we have built a portfolio of highly valuable strategic assets now exceeding more than EUR 1 billion in value on our balance sheet.
This is important to understand. Among these assets, we hold a highly attractive 30.8% stake in Caliente Interactive, Mexico's undisputed market leader. We also have a minority equity stake in Hard Rock Digital, which is performing strongly in the U.S., with the value of our investment increasing by more than 2x since the original investment in March 2023. In addition, we hold stakes in high potential local operators such as Galera.bet in Brazil and Wplay in Colombia, as well as LSports, a rapidly growing sports data provider. The combination of our B2B technology platform and our portfolio of highly valuable assets gives Playtech a uniquely compelling investment case with significant optionality. Coupled with our ambitions, medium-term targets, and our confidence in achieving them, we believe we are exceptionally well positioned to capture growth and deliver attractive, sustainable value to our shareholders.
Turning to the next slide, where I would like to briefly outline our strategic priorities. Firstly, we remain focused on regulated and regulating markets, where we see long-term potential for strong growth. As you will hear in the next few slides, we are making significant progress across our core markets, including the U.S., Mexico, and Brazil. Secondly, we continue to invest in our product suite to ensure we stay ahead of the competition. In live casino, we are expanding our studio footprint and scaling the capacity. In casino and PAM+, we continue to prioritize personalization, delivery of bespoke solutions, and innovative, high-performing content. Alongside this, we ensure our customers have access to in-house expertise through our managed services offering, where we can take ownership of a customer's day-to-day operations and use our decades of expertise to optimize their operations without needing to migrate platform infrastructure.
We also offer the latest safer gambling technology through BetBuddy, helping customers optimize their performance while maintaining the highest standards of player protection. Lastly, following the sale of Snaitech, we have intensified our focus on simplifying the organization and optimizing our operating model, ensuring we have the right cost base, the right footprint, and the right allocation of resources to support the next phase of growth. Taken together, these priorities form a clear roadmap for execution and give us strong conviction in our ability to deliver on our medium-term financial targets while positioning Playtech to capture structural growth opportunities and continue to generate attractive, sustainable value to, for our shareholders. On to the next slide, please. I would like to highlight our long-standing partnership with Caliente Interactive and how together we are positioned to unlock Mexico's significant growth opportunities. I'll start with a market overview.
Mexico's online gambling market is expanding rapidly, with industry forecasts indicating it could double in size over the next five years. The country benefits from a large mobile-first population of over 100 million adults, supported by high online penetration. Importantly, GGR per adult is relatively low at around $35, and when compared with a market such as Brazil at $64, the room for growth is exciting. Within this context, Caliente is the undisputed leader. With more than 100 years of brand heritage, deep cultural localization, and one of the most extensive sponsorship portfolios in the region, Caliente has created a formidable competitive moat that continues to reinforce its dominance. Under the revised agreement, Caliente contributed around EUR 55 million to Playtech's adjusted EBITDA through our 38% equity stake and distributed around EUR 45 million to Playtech in dividends, which flow directly into our free cash flow.
The performance has remained strong into 2026. 2026 also brings once in a generation catalyst, the FIFA Men's World Cup, co-hosted in Mexico and importantly, on the local time zone. As the official sponsor of the Mexican national football team, Caliente is set to benefit from unprecedented global visibility during a tournament expected to reach more than 6 billion cumulative viewership engagements. This creates a powerful platform to accelerate customer acquisition, enhancing cross-sell, and driving higher engagement over the next few years. Playtech is well-positioned to benefit from this growth. The combination of Caliente's market leadership, as well as the many other operators we serve in the market, Mexico's structural growth drivers and the World Cup catalyst collectively represent a major value driver for Playtech over the medium term. Turning to the next slide and looking at our progress in the U.S.
For the second consecutive year, our U.S. business delivered revenue growth of more than 100% as we continued executing on our strategy and began to realize meaningful returns on the investments made over the last few years. Live casino remains a standout growth driver with revenues up over 110% year-on-year. Our ability to deliver high-quality dedicated tables continues to be a clear point of differentiation. With more than 60 U.S. tables in operation at year-end, we continue to scale capacity to meet sustained demand from tier one operators. In casino, we are recognized for our bespoke development and our exclusive branded content, which together offer our customers meaningful differentiation. In 2025, we developed and launched several high-performing bespoke titles for FanDuel, Hard Rock Digital, and Rush Street Interactive.
Our PAM+ platform continues to be a major contributor to U.S. momentum and is now ranked the number one third-party iGaming platform in the country. PAM+ supported the successful expansion of Delaware North, including new retail and online sports launches across multiple states and the rollout of casino in West Virginia. In addition, Parx Casino delivered strong performance exceeding market growth, supported by our platform capabilities. Finally, I would like to highlight our strong progress with Hard Rock Digital. Together, we developed a first-of-its-kind sports wagering product where outcomes are based on past motor racing events. Offered by the Seminole Tribe, the product has received very positive customer feedback since launch in Q4 last year. Hard Rock has also continued to expand beyond Florida with further momentum in New Jersey and a new launch in Michigan in Q4, where they quickly got to number four market share.
Our progress in the U.S. highlights accelerating demand across our products and reinforces the scale of the long-term opportunity for Playtech in this market. The journey in the U.S. is just beginning. In 2025, we launched with major customers in West Virginia and Delaware and launched earlier this month in Connecticut, bringing our regulated iGaming presence to six U.S. states. As you can see on the map, also in the appendix, the number of U.S. states that have not yet regulated iGaming. We are really excited about the opportunity ahead of us as this evolves over time. Next slide, please. Looking at Brazil, one of the most exciting regulated opportunities globally.
According to industry estimates, Brazil's newly licensed online gambling market is expected to generate around 50% of Latin America's total GGR by 2030, underscoring its potential to become one of the world's largest regulated markets. We indicated before, Brazil has been challenging in terms of regulatory measures with some of the strictest onboarding requirements globally. We view these challenges as temporary. Our confidence in Brazil is grounded in powerful long-term fundamentals, a population of 150 million adults, rising digital adoption, and deep national passion for sports, all of which underpins sustained structural growth. During the year, we completed the build-out of our São Paulo live studio, purpose-built to deliver highly localized content through native-speaking dealers. We also expanded our local team to over 100 employees, giving us the scale and capability to support a growing demand from customers for our bespoke content solutions.
I'm excited about the prospects of this market going forward. Now looking at live casino, live continues to be a high-growth, high-margin vertical and one where Playtech is steadily gaining share. With the global live market projected to double over the next five years, we remain exceptionally well-positioned in key markets such as the U.S., Mexico, and Brazil, where growth is forecasted to be particularly strong. Importantly, our internal data shows that live casino players generate around 1.8x more revenue than traditional casino players, making live a highly attractive cross-sell destination. During 2025, we continued to scale our live operations to meet rising demand. Live delivered 10% growth in regulated markets in 2025, excluding the beneficial impact of Brazil moving into our regulated segment.
By year-end, we operated more than 500 tables across 17 studios, doubling our table count since 2020 and adding 11 new studios in the last five years. Our investments were focused on strategic capacity expansion, adding tables across our U.S. studios, launching the live from Las Vegas broadcast studio from the MGM Grand casino floor, opening our new São Paulo studio in Brazil, and selectively increasing table capacity across Peru and Romania. Looking ahead, we remain committed to advancing our live strategy. With expanding studio capacity, differentiated bespoke content, and strong commercial momentum, we expect live casino to become a material contributor to achieving our medium-term financial targets. Turning to the next slide and the opportunities ahead with AI.
Hey, hi. Playtech was early in applying machine learning within our solutions, and over the past year, we have continued to accelerate our AI adoption. We established a robust AI governance framework, rolled out AI tooling across the organization, and fostering cross-functional innovation through our innovation labs while continuing to advance our AI-enabled safer gambling capabilities through Playtech Protect. The models are only as good as the data stack they are trained on. We are a data-centric business, and we have over 25 years of data from our customers across platform and products. This is a core differentiator for Playtech. As we further our AI adoption, the opportunities are significant. From a revenue perspective, we are already using AI to enhance game development in Casino while exploring AI host and brand customization in Live.
Across the platform, we are improving personalized player journeys and developing more intelligent AI-generated sports bet builders. These initiatives help operators deliver more relevant content, deepen engagement, and ultimately grow revenues. On the cost side, AI is unlocking efficiency opportunities across the organization. We are automating routine tasks. We are also responsibly rolling out agentic solutions for software development, coding, testing, and quality assurance. These areas are already generating early productivity gains with more expected over time. Overall, AI is becoming an increasingly meaningful contributor across Playtech's operations, driving product innovation, improving efficiency, and enhancing how we support our customers. Next slide, please. 2025 marked the final year of our five year sustainability strategy, and I'm pleased to say we delivered meaningful progress across all of our commitments. During the year, we expanded the uptake of BetBuddy, further reinforcing our role as a trusted partner in regulated markets.
Our female representation in leadership roles reached 32%, up from 23% when laying out our commitments. We have reduced scope one and two emissions by 48% against our 2018 baseline, an important step towards our 2040 net zero target. Through our partnership, we supported over 530,000 people in community programs over the last five years. Our efforts were also recognized externally. In 2025, Playtech was ranked number one in our sector in FTSE Women Leaders Review 2025, Climate Leader by the Financial Times, and we were included in the TIME Statista World's Most Sustainable Companies list. We are proud of the progress made since establishing our 2025 commitments five years ago.
In 2026, we will define our next five-year sustainability roadmap, building on these foundations with renewed focus to support a more resilient, responsible, and future-ready business that delivers long-term value for our customers, colleagues, communities, and shareholders. On to the final slide. As you've heard today, 2025 was a year of successful strategic reset for Playtech. Having delivered EUR 197 million of adjusted EBITDA in 2025, we are off to an excellent start this year, and we are now on track to deliver full year 2026 adjusted EBITDA ahead of current market expectations. We have very good momentum in the U.S. and increasing activity in Mexico as we enter a World Cup year with Caliente and others.
We have a strong balance sheet which gives us flexibility to invest, and we continue to look for efficiencies by using AI and addressing underperforming businesses. As we finish the first quarter of 2026, we are confident in the outlook, on track to deliver our medium-term targets, and excited about the future of Playtech. Thank you for listening. Chris and I obviously will now take any questions you may have. Operator, please open the line for questions.
Hi. Good morning. Thank you very much. Ivor Jones from Peel Hunt. You've talked lots about fast-growing markets, but Europe ex U.K. is still a big proportion of the current total. Could you just talk about the growth prospects, whether that region is ex growth or you're gonna see stronger growth from some of the territories? I'm not sure really how to ask this question, but in relation to Evolution's litigation and Black Cube, is there anything you can tell us about what you are doing? Thank you.
Do you want to take that?
On Ivor, I've got some things I can say. Obviously, we understand it's obviously it's an interesting topic. I think we made our position clear in the RNS we issued back in October. Just to be clear, we have not been added to any case, so there's not really much we can say. We're not gonna be taking any further questions on the topic. Thanks for asking, but we're not gonna say anything further. You know, we are limited by what we can say under legal privilege and confidentiality rules in the U.S., so nothing further on that topic. Europe ex U.K., I wouldn't describe it as ex growth. Obviously, there's a lot of different markets that make up that sort of bucket in our results.
It is one of the largest portions of our revenue, but there's a lot of different moving parts within that. Certainly, there are growth opportunities within it without question. I think the figures you see from a growth perspective in any particular set of results are gonna be a mix of the trends in that period. There'll be some times when one particular market and the dynamics there maybe sort of drag all the results along with it or perhaps vice versa. It will be a blend of the different markets. Without question, there are exciting markets within Europe. You know, going forward, I think for Playtech, you saw this in 2025 with sort of the strong finish to the year and the upgrade and the equally positive comments today around 2026.
You know, disproportionately, the growth is gonna come from the Americas, right? North and South. There's no doubt about that. That's probably been the story of our performance in recent times and will be probably for much of 2026, but that's not to say there are not exciting opportunities within Europe as well.
If I may just further elaborate, I will say the following. One of the things we are very proud of, one of the elements of our strategy that is shared amongst the company is obviously the diversity of Playtech. We have been diversifying our business for many, many years. We started like many others in the U.K., being one of the first that adopted the framework that allowed regulated gaming, even though even before it was locally regulated, accepting other jurisdiction and the activity and marketing into the U.K. I would say that we are very proud of the diversity of Playtech. Obviously, the rest of the business is today by far not in the U.K., which was not the case maybe some years ago, many years ago.
We believe that the other markets present a higher growth opportunity for Playtech, and we put a lot of efforts. Having said all that, experience shows, having been around for 20 years now, more than 20 years now, I would say that we've seen that already happening few times with new regulations being introduced, with tax being introduced some years ago. I will say that given the size, the importance, the significance, and the fact that it's driven by well-established operators like Entain, like Flutter, like Evoke and others, given the size still and the scale of the U.K. market, I think the U.K. will remain an important market for the sector. We're fully committed. We remain fully committed to the relationships that we have in the U.K. and the U.K. market all together.
There will be a reset. Reality shows that some mid-size, small-size operators will leave the market, probably given the higher taxes and stricter regulations, will move elsewhere, reallocate marketing as well, which will give an opportunity to the larger operators to take some market share and offset the impact. I think that there will be a reset, but over time, we will see some growth in the future. Hence why we believe that we should remain committed not only to the relationships, but the market altogether. Maybe it will not be as exciting as the U.S., Mexico, Brazil, but still, you know, it comes from not a small base. Obviously a good contribution for the operators and Playtech and other B2B suppliers alike.
Thank you. Can I just ask one follow-up question about growth? You mentioned when you were talking about increased CapEx and capitalized DevEx this year, one reason for that would be Brazil. Why does driving Brazilian growth require CapEx beyond the live studios you've already said you've opened? Thanks.
I think it's general infrastructure expansion. We have big plans in Brazil, both with our, you know, existing partners there and other opportunities that we've been working on. It's a market that we're, you know, extremely excited about, and it's one of the, you know, most exciting ones across the group. Given the dynamics there, it requires some CapEx that we felt needed to be singled out. Just in that CapEx is going up year on year. Just wanted to make that clear as to why that is.
If I may just add one more comment, which is, I think, extremely important. Brazil is one of the fastest-growing markets. If you compare it to on a state-by-state basis in the U.S., because obviously there are seven gaming states and many other sports-only states, right? They are very, very different, right? Market taxes is different. Operators are different. Yes, there is a common denominator. You will find the larger three in most jurisdictions, operating in most jurisdictions, but not necessarily mid-size operators in each and every state.
When you compare the states on an individual basis compared to the U.K., which is quite stagnant as we just discussed, and Brazil, which is a fast-growing market, I think Brazil is a very, very exciting opportunity for the industry altogether, given the growth. Yes, it has gone through very challenging times in 2025. It has been stable since the second year of last year, and we now see accelerated growth. Playtech has a lot to achieve there. With local partners, we have a group of brands that we support on a structured basis. Luva.bet, obviously Galera.bet, Brazil Bet, Luva.bet, F12.bet between them, not insignificant. Many B2B customers. There are many others we are in the process of establishing ourselves with.
Live casino, going back to your question, live casino will require some CapEx, and we believe that we will see exponential demand for live casino formats, and we identified some that will be, we believe, very exciting for the Brazilian market, together, that we developed internally or in collaboration with some companies that we collaborate with. We are also looking at certain partnerships that we believe we will be able to deliver within 2026, and those require certain investments. We can't really name them at this point in time. We don't want to set any expectations. I don't want to get ahead of myself, but I think that it is public that we won certain tenders in the market, and we are preparing for that.
This requires an additional investment that we already started incurring since the end of last year, which will grow the CapEx and OpEx to some extent, but it will be limited. It's not that we believe that the investment will be in 2026. I don't see that as a recurring theme beyond 2027. I mean in 2027 and beyond. In Brazil specifically.
I thought when we made Ivor a house analyst, he'd start asking easier questions.
Thank you. It's Roberta Ciaccia from Investec. I have two quick questions. First one on the U.S. Clearly a step change in profitability according to your indications today. Can you give us a bit more detail on what do you expect it to be this year and in the coming years? Also, is this a cash positive? Is this going to be cash positive already in 2026? Second thing on the B2C business. Happybet, where do you stand in the process of unwinding it? What are potential plans for Sun Bingo? You said you're considering different options. That's all from me now. Thank you.
On U.S. profitability, good spot. There's definitely a change in our expectations around that business. We really, you know, we've been investing in that business, as we've talked about with you, for several years. I think, you know, the returns have been coming, but that really sort of started to accelerate as we finished 2025 and has continued into 2026. I believe our previous guidance on U.S. profitability was to reach it by the end of 2026. I can now say that we'll be profitable for 2026 as a whole, so it's not just finishing the year run rate profitability. We will be U.S. profitable for 2026 as a whole. That would include on a cash basis as well.
We're very pleased with how that's going and it's, you know, we're a little bit ahead of our plans, I would say. On B2C, Happybet, we're. I'd say in 2026 we'll completely have closed that business. We're well on the way towards that. You know, the costs are almost all gone. There's a small amount of monthly remaining costs. You know, at its peak, the business was, you know, double-digit millions loss-making on an annual basis. You saw it was negative six in 2025 on a monthly basis. Now it's almost negligible. There's a little bit left to do to fully close it, but you know, that's basically done. Sun Bingo's a bit different.
Obviously it's like a lot of smaller operators in the U.K., it's been gonna be challenged by the Remote Gaming Duty increases that are coming into effect shortly. That does significantly alter the profitability of that business in terms of our expectations going forward. We are working with them to you know to do an operational review of that business and look for opportunities and some plans on how we will address that going forward. I will say the Sun Bingo business is more it's classified as B2B, but it has more B2B characteristics. Similar to some of our structured agreements, right?
I think it, you know, it possibly does have a future with Playtech, so it's very different to Happybet is what I'm saying. That being said, it does, you know, something needs to be addressed about it because it's, you know, it's no longer profitable or it's no longer expected to be profitable given the changes that are coming imminently under Remote Gaming Duty.
Hi, morning. Richard Stuber from Deutsche Bank. Can I ask three questions, one on Brazil, one on Caliente, one on Live. In terms of Live, I think you talked about revenues were up sort of 10% year-on-year. Could you talk about the profitability of Live as well? Is that up? And if so, what sort of EBITDA is Live now making? Second question's on Caliente. Could you just remind us the split of sort of sports versus casino there? 'Cause clearly you talk about the World Cup being a massive benefit, but it'd be interesting to know how material that will be. And the third point is on Brazil.
I think at the end of your interims, you talked about sort of close to a deal with Caixa. Could you talk a little bit more about where we are with that agreement, please? Thank you.
Want to start with Live?
Yeah. Live, we haven't disclosed, you know, the margins or EBITDA in these results. There's a lot of moving parts, and it's, I'd say it's a business as we talked about still with, you know, significant investment going into it. We have given, you know, margins and EBITDA in the past. I wouldn't say margins have significantly expanded, but that's been somewhat by choice as we've continued to expand and invest in both CapEx and OpEx. As I said, we're starting to see returns in places like the U.S. You know, Live is one of the contributors to, you know, the previous question around U.S. profitability, but not the only one.
We are significantly continuing to expand Live in the U.S., but also significantly expanding in other areas like Brazil that Mor has discussed. The Live margins, you know, haven't really expanded, but like I said, that's effectively a choice we're making to sacrifice short-term margins for future growth. I think if you took the revenue growth figures we've disclosed today on Live and assume not much margin expansion, you can probably get an idea of how EBITDA has trended for that business.
Yes. On Caliente, I will say the following. Caliente, I can't really provide the numbers. It's not a question for us, it's a question for them. However, I will say the following. Grupo Caliente is a casino group, right? However, on the other hand, the digital business, the Caliente Interactive established itself as a sports-driven business that has one of the largest, if not the largest sponsorship portfolio, through which it markets it or that it uses for marketing purposes. I would say that it's one of the best-positioned businesses between casino and sports, right? On one hand the interactive business is led by sports. On the other hand, there is a clear association with casino, given the roots of Caliente, and it's the perfect combination of both retail and online sports and casino.
The story about Caliente and its position is, and its preparation for the World Cup is the position that they have in the market, the sponsorship, the sponsorship portfolio that they have, the fact that they support the national team, the visibility of all of that. When you combine all of that and combine with the fact that it's a very balanced business between sports and casino, I think that the opportunity is very, very significant. I think that they are one of the best, if not best positioned operators in the region and specifically Mexico for the coming World Cup. On Caixa, as we indicated before, like I said earlier, I don't want to get ahead of myself. We won the tender. It's public. We can say that. I don't want to get ahead of myself.
I will say the following. We are trying hard, we are pushing hard, and we still believe in the prospects of Brazil and partnerships in Brazil. We truly believe, however, that if we do manage to enter into an agreement with Caixa, it will become one of the most significant opportunities for Playtech for the coming years alongside the U.S., Mexico and few other territories. Given the size, the significance and the position of Caixa, just so you understand, this is one of the largest bank, if not the largest bank, right? In a country that has 150 million adults in the country, they have 140 million registered customers. The access to the market, the popularity of the brand is unparalleled. You can't find.
When I thought about Caixa, I was trying to think about another country where you have a brand that you can basically. Obviously, Caliente is the closest, but I think that the best example would be Apple going live with a betting product in the U.S. Will people want to try it? I believe the answer is yes. That, I think, is the best example of the position of Caixa in Brazil. I know that most people here in this room and most people, including myself, by the way, educated myself about that and spent some time with Caixa and spent some time in Brazil to better understand it. I think that it's an opportunity that a lot of people do not understand.
I, you know, I understand why they cannot understand because they are not there. They are not Brazilian. They did not grow up within Brazil and understand the importance of Caixa to the community and the economy of Brazil. Like I said, it's a very significant opportunity. Not yet there. We are trying our best. If it will come to that, obviously we will announce it in due course.
Thank you for taking the questions. I have three questions, if I may. The first one is on AI. You guys provide a very good color with regards to, you know, the potential opportunities from AI. Have you guys quantified the potential margin improvement or, you know, hard dollar costs, higher year costs that, you know, the savings could be? With regards to, you know, software as a service, I believe that there has been some concerns with regards to, you know, AI being a threat to service, you know, software as a service. I was wondering if you could provide your thoughts on, you know, how your product would not be so impacted by, you know, potential AI replacing, you know, software as a service.
On the M&A side, could you please comment on, you know, your you know, appetite for M&A and what type of, you know, opportunities would be looking or would be interesting to you guys in terms of add-ons or anything major? Last one, with regards to the debt, I know that you guys have two years towards, you know, the maturity of the bonds, but if you could quickly provide some comments on the refinancing, you know, strategy for that bond, and if you would consider, you know, switching from fixed to, you know, some pre-payable debt. Thank you.
Okay. If you, I can probably do the M&A and the debt if you wanna do the AI and SaaS. On M&A, like I think I communicated during the presentation around capital allocation, it remains part of our strategy. You know, that being said, we haven't done meaningful true M&A since, you know, really Snaitech in 2018. We have done investments, which may or may not be considered an M&A, depending how you look at it. We still have an M&A strategy. We regularly are looking at potential opportunities. I think the good thing for Playtech is there's no obvious gaps in our portfolio, whether that's product or geographically. So there's nothing we feel like we need to fill.
We can be picky and choosy, and if there's something that aligns with our strategy and also has the right financial profile, we will certainly explore it. It remains a part of our strategy, but it's not necessarily urgency or desperation to pursue M&A, but we will do so if the right opportunity presents itself. Like I said during the presentation, we'll fit it in with. You know, it has to fit in with our overall capital allocation strategy. In terms of the debt, like you say, we have one bond remaining. It matures in June 2028, you know, we're 2-2.5 years away from that. We do have some time.
It's something we look at regularly in both the context of Playtech's performance and what a refinancing would look like, but also in terms of what the market for refinancings are like. Obviously we're in a good position with a very strong balance sheet. Nothing imminent on that. Obviously, when you get closer to two years and sub two years, you're probably what's more typical refinancing window. I think we will start to look at it more closely later this year. It's while we keep, you know, our ear to the ground and are on top of these things, it's not something I would describe as an urgent priority.
In terms of the type of debt we may refinance it with, our starting point is probably a similar bond, to be quite honest. We'll always look at Playtech and what different types of, you know, securities might make sense. We'd certainly be open to considering something different, but I'd say a traditional bond is probably our starting point.
I'll try to give you a brief answer on AI, otherwise we need to prepare lunch here outside, right? 'Cause I've been educating myself about it for many months now, more than many months. I can tell you the following. One of the things I mentioned in the presentation, Playtech is a data-centric business. Playtech has taken the decision to include machine learning algorithms, partly the basis for AI, in April 2017, right? Nine years ago. A lot of what we do today is data-driven across different parts of the platform and the products that we provide. There is a good basis there. One thing you'll learn about AI, a lot of people say AI, but what AI really means, right? I'll give you an example.
I've been on a call with a company we are now going to collaborate with. They have 100 data scientists, all geniuses, right? They're focused on GenAI, generative AI around video. Around video and graphics, right? When I ask, "What LLM models do you have? Large language models do you have and deploy?" They said, "It has nothing to do with LLMs." AI consists of many categories. You can use AI for graphics, for content, for video, and you can do that for data collection, data analysis to generate better engagement with the customer. We are already deploying and already using a lot of those AI capabilities, whether it is GenAI or LLMs, in order to improve the product.
The one thing which I also mentioned in the presentation, which is the key and people need to understand that, right? You can go and buy certain tools or get a license from certain companies that provide you with an API for AI tools. Everyone, right, will use over time AI capabilities in order to streamline the games development, for example, to make it quicker and cheaper. Playtech is already doing that, and we will progress and invest more into it in order to make it quicker and in order to make it cheaper. This is not where the story. This is not the story. The story is about how you can use AI beyond that. Our industry is going through a change. AI is the catalyst for that, right? It's how do you appeal to a younger generation?
How do you appeal to content creators? This is the future of e-commerce. This is the future of communications. This is the future, and accordingly, this is the future of our industry. The one area that people need to understand, Playtech has a key differentiator that no other company I'm familiar with has, is 25+ years of data we accumulated, supporting by empowering and supporting the largest and leading operators across the space. When you think how you basically create AI tools or AI or using AI tools solutions, right, for the benefit of the customers, like personalization, like customer engagement, like content creations, content creation, Playtech is almost uniquely positioned in this category by the fact that it can use the data it accumulated for so many years. There is a reason why you won't find too many platform providers, right?
Because in order to build a platform, you need to have access to operators that will share with you the processes and the methodologies and the efficiencies within a gaming operations. We have that from the platform. We have the data that comes together with that from 25 years of supporting the largest and leading, which positions us better to provide, whether it is SaaS, games, products, or platform capabilities that no other companies will be able to provide using AI and data-driven solutions. And this is why I don't believe that there is a real risk for Playtech, right?
Again, I don't want to get ahead of myself because we have to understand, and again, I know that it's kind of a confusing answer, but because I can talk, but you need to go through the basic GenAI versus LLMs versus different other tools and how you employ that and how do you deploy that and how you use that. I think that Playtech is a data-centric business with data and therefore positioned better to provide better solutions that will allow us to basically compete better against the competition. I believe that other companies will find it hard to create software-as-a-service solutions that will be able to compete with the data and the solutions we will create on the basis of this data. In general, AI is something that everyone will use.
I think that. Again, one last comment I wanted to make is, sometimes certain things that look very trivial, right? Live casino dealer or an AI host, a dealer, right? An AI dealer. An AI casino dealer, right? Yes, it's easy to create the dealer, right? It's easy to use AI tools. You create a digital dealer. But when you start communicating, it will not pass regulatory requirements, right? It will fail to communicate well enough with the customer, right? Because it can be a real risk to the business, right? We still have a long way before there will be real AI-supported AI-generated solutions that operators will be able to use in a secure, regulated way in different territories.
We're investing heavily into that, and I think that Playtech will be one of the first to come out with some AI-driven solutions, products and even the platform. A better platform that will be driven by AI, which will position us ahead of the competition. Hence why I think that there is a risk, don't get me wrong, but it's limited, but still, it's something we monitor on a continuous basis. On the AI and the efficiencies and how much money we can save, I would say that for us now, it's not necessarily because of the strong demand, because of the accelerated growth. It's less about cutting costs, it's about leading to efficiencies. For example, our games development unit, our goal using AI is to cut the.
To double, I would say, the amount of games we develop, bespoke branded and other games, for the benefit of our customers because we see a strong demand, right, on the basis of the same resources that we have today. We will not need, even though there is a strong demand and an increasing demand in different territories for additional content, our goal is, by using AI, to use the same amount of people that we have today in order to generate double the amount of games that we can offer the customers. I think that this is a better approach for us than simply cutting the cost and suggesting that we can now, by using Claude or Cursor, right, we can reduce the costs of coding by 30% and we will make people redundant.
Our industry is a fast growing business. We are going through 2026, which is an important year. It's a World Cup year. A lot of our customers are driven by sports. We don't want to make mistakes. For us, it will be to use AI in order to accelerate the growth rather than to cut the costs. Don't get me wrong, it also reduces certain routine tasks, right, internally. Like for example, quality assurance testing, where we can cut the costs alongside that. But we haven't yet quantified that, and it's a work in progress. All this AI is a work in progress, not only for us, for many, many other companies as well.
Thanks, Mor. I think we've got time for one more from the audience. Jamie.
Morning, guys. It's Jamie Bass from Citi. I won't ask on AI 'cause I think that's been pretty well covered. I have three questions, please. The first one on the World Cup. Could we talk a bit about phasing, given that it's June and July? Would you expect H1 to be more of an investment and then see the benefit flowing through in H2? Then second one, Chris, I know you said you wouldn't comment anymore, so I hope this doesn't count, but could you give us an idea for legal costs for the year? And then finally on Brazil, we've talked about the opportunity there. We've been seeing a lot of headlines about potential regulatory tightening and changes from where we already are, potential tax increases. How do you think about the potential for that market if the situation were to change?
Thank you.
Which market was the last one?
Brazil.
Brazil. Sorry.
The World Cup, certainly in the I think the biggest impact on Playtech, there are others, but the biggest will be through our investment in Caliente. You know, their plans, they actually had a board meeting this week, which Mor and I attend. They're you know, planning significant investment in H1 in the lead up to the World Cup. They, I mean, they're still growing in H1, you know, year- on- year. The business. You know, they're, they are planning heavy investment. And that should, you know, then you'll see the benefits in that.
On that basis, I think the investment from an OpEx perspective will be more H1 weighted and, you know, and H2 you should see, you know, in theory at least, accelerated revenue growth and perhaps OpEx tapering off somewhat. Their business should be more H2 weighted and the benefits should go beyond H2 as well, for it should go into 2027 and beyond. Legal costs, nothing to call out, to be honest. Obviously, we've published our results, which I think were quite strong, so any costs were within that, and I don't think anyone has noticed, because they're not that significant.
You know, similarly, we've given an upgrade on 2026 today, so, you know, nothing to really say about legal costs, to be honest.
On Brazil, the market is expected to grow significantly over the course of the coming years. There were a lot of suggestions, a lot of proposals. We believe that regardless of any regulatory change, the market will remain an attractive market and will present for Playtech specifically a significant opportunity going forward. There may be some changes. There were references to tax, there were references to certain products. We believe that the market presents a sustainable growth, a significant sustainable growth opportunity for Playtech. One of the first tests will be obviously whether Caixa will indeed launch betting and gaming in the country. Once that happens, I think that they will become the standard, and I think that it will be a clear indication where the market is headed.
It may be the case that there will be certain regulatory changes, but in light of the size, in light of the significance of certain operators in the market, we believe that even if it will be introduced on a medium-term basis, it may be that the impact will be short-term, but on a medium long-term basis, this is still one of the most promising opportunities for operators operating in Brazil, for companies like Playtech and others.
Okay, I think on that note, we're out of time. Thank you everyone for joining and participating today. That brings our full year 2025 results to a close, and we will see you all at the next one. Operator, you can close the line. Thank you.
Thanks.
Thank you, everyone.