Good morning and welcome to Betsson's presentation of the third quarter 2025. I'm Pontus Lindwall, President and CEO of Betsson. With me today is also our CFO, Martin Öhman. The global online gaming market is driven by the shift from offline to online gaming, and Betsson is well positioned to capture growth opportunities in this structurally attractive market. In the third quarter of 2025, we continue to create value for our customers, partners, and shareholders. Total group revenue increased 6%, and operating profit grew by 4% compared to the corresponding period last year. Earnings per share increased by 10% year-over-year. We have a proven and successful product portfolio consisting of both casino and sports betting, as well as a well-diversified mix of revenues from geographical regions, which lowers the risk of periodically weaker developments in individual products or markets.
In the third quarter, casino revenue was at a new all-time high, up 6% year-over-year, while sportsbook revenue was up 4% year-over-year. Revenue from locally regulated markets increased by 16% and accounted for 64% of total revenue during the quarter. Geographically, the largest growth contribution during the quarter came from Western Europe, where revenue increased by 27%, mainly driven by continued strong growth in Italy, where we continue to gain market share in both casino and sports betting. Latin America also continued to be an important growth region in the quarter, with 10% revenue growth year-over-year, driven by casino. Our business continues to generate strong cash flows, and our balance sheet is very robust, with a record net cash position of €220 million.
The Board of Directors has decided to initiate a share buyback program of up to €40 million from today and up till the 30th of April 2026. Our strategic sponsorships form an important part of our marketing strategy, and Betsson's commitment to sports in general continues. During the quarter, we entered into new sponsorships with the basketball clubs AEGRIS BC and MYKONOS BC in Greece. A new sponsorship also began with the Italian football club Bari in Serie B. Following the rebranding from BetSafe to our flagship brand Betsson, the sponsorships of Salgiris and the Basketball Association in Lithuania were extended under the Betsson brand. In addition, it was particularly nice to see that Club Brugge managed to qualify for the Champions League in football, which means that two clubs in this prestigious tournament will wear Betsson's name on their match jerseys this season.
On the product and technology side, we continue to invest to deliver the best customer experience on the market. During the third quarter, the implementation of a new proprietary front-end framework continued. This has been built for increased flexibility and performance and strengthens the user experience by enabling faster and more efficient rollout of new features and updates going forward. The development of native apps continued, mainly for the market in Argentina, where a new app was launched stepwise during the third quarter for the three provinces. Within the Sportsbook, the user interfaces were improved, and an early payout feature was introduced for football, meaning that players can opt to receive winnings as soon as a team leads by two goals. I will hand over to Martin, who will present our financials in more detail.
Thanks, Pontus, and hello everyone. As Pontus said, the third quarter was a quarter with revenue and EBIT growth supported by the highest casino revenue ever for an individual quarter and maintained cost control. The activity was somewhat lower in the third quarter, and active customer and customer deposits in all gaming solutions are both slightly down compared to the same period last year, with the latter decrease by 2%. The gross turnover in sportsbook across all Betsson gaming solutions was down by 19% compared to the same period last year and amounts to approximately €1.3 billion. Sportsbook margin was 8.8%, which is higher than the 7.4% margin in the third quarter last year and above the two-year rolling average margin of 8.1%. Sportsbook revenue increased by some 4% compared to last year and amounted to €72 million.
The casino turnover is down 6% year on year, but casino revenue increased by 6% and is the highest reported casino revenue ever. Casino revenue represented 75% of the group's total revenue in the quarter, and sportsbooks some 24%. Reported revenue for the third quarter amounted to €296 million, an increase of 6% year on year, and 11% organic growth. Revenue from locally regulated markets increased by 16% compared to last year and now constitutes 64% of total revenue compared to 58% last year. Revenue growth comes from both the B2C and the B2B business in the quarter, where the B2B business is the main growth driver, with 15% year-on-year growth and amounts to €77 million, representing 26% of total revenue. Splitting revenue by region, we see growth compared to previous year in all regions except for the Nordics, which is down by 20% compared to last year.
All markets in the Nordic region reported decreased revenue in the quarter compared to the corresponding period last year as a consequence of decreased marketing investments in the region and the decision to close down the B2C business in the Norwegian markets as of December last year. The Nordic region represented 12% of the group's total revenue in the third quarter. Revenue from Western Europe increased by 27% year on year or by €12 million and reported the second highest revenue ever for the region in a single quarter. The Italian market reported all-time high revenue in the third quarter, mainly driven by the casino product. The Sportsbook product continued to show strong growth with increased revenue both year on year and compared to the previous quarter, but the Sportsbook revenue is still relatively smaller than the Casino in Italy.
Revenue from Belgium decreased compared to the corresponding period last year and the previous quarter. The decline is driven by lower activity in the Sportsbook product following some technical issues in connection with the migration from a third-party Sportsbook provider to the Betsson Sportsbook. The Western Europe region represented 19% of the total revenue in the quarter. Revenue from Central and Eastern Europe and Central Asia region, the SICA region, increased by 3%. Croatia and Greece reported all-time high revenue in the third quarter. The growth in Croatia is driven by the Casino product, whilst Greece reported growth in both the Casino and the Sportsbook product. Lithuania and Latvia reported increased revenue compared to the same period last year, but decreased revenue compared to the previous quarter. Georgia and Estonia reported decreased revenue both compared to the same period last year and the previous quarter.
The decline is primarily driven by the Casino product. The SICA region represented 40% of the group's total revenue. Revenue in the Latin America region increased by 10% compared to the same period last year, but decreased compared to the previous quarter. The increase compared to last year is driven by the Casino product. The decline compared to the previous quarter is explained by reduced activity in the Sportsbook product, mainly because of seasonal variations and a lower Sportsbook margin. Argentina continued to show strong underlying growth in customer deposits and increased turnover and reported higher revenue compared to the same period last year, although facing FX headwinds. Peru and Colombia reported growth compared to the same period last year, but decreased revenue compared to the previous quarter. The growth is primarily driven by the Casino product.
The Latin America region represented 26% of the group's total revenue in the third quarter. Explaining the development in operating income, this picture breaks down the different components in the profit and loss statement to display the impact from the different line items. Revenue has increased by some €16 million, and following that, increased cost of services provided as well. The increase in cost of services provided is, apart from revenue growth, mainly explained by higher gaming taxes following a 64% share of total revenue coming from locally regulated markets. Gross profit increased by €11 million compared to the same period last year and amounts to €190 million, which corresponds to a gross profit margin of 64%, equal to last year. Marketing spend increased by €2 million compared to last year and corresponds to 16% of total B2C revenue and to some 21% when including affiliate marketing costs as well.
Increased marketing spend is primarily explained by enhanced marketing efforts in Western Europe. Personnel expenses increased by some €10 million compared to last year, explained by increased number of employees following geographical expansion and acquisitions. This, in combination with organic focus on product and tech development, explains the bulk of the increased number of headcounts within the group. Depreciation and amortization costs were flat compared to last year. Other items include capitalized development costs, other external expenses, and other operating income and expenses. The latter two are more or less flat compared to last year. The movement in other items relates to increased capitalized development costs following increased focus on product and tech development and also following the acquisition of Sporting Solutions, adding new employees within tech and product development.
Operating income amounts to €67 million, an increase of 4% compared to last year, and the EBIT margin was 22.6% compared to 23.0% last year. Operating cash flow amounts to €65 million compared to €63 million in the same period last year. Operating cash flow is driven by increased operating income, but negatively impacted by changes in working capital by some €16 million, mainly explained by decreased accrued expenses. Cash flow from investing activities is positive in the quarter. Investments in own product and technology development are maintained, but the total number is impacted by reversal of the purchase consideration of the discontinued acquisition of Holland Gaming Technology and Holland Power Gaming. Cash flow from financing activities impacted the cash flow by €8 million, mainly driven by dividend paid to shareholders with non-controlling interest and lease payments.
Betsson has as end of September a net cash position of €220 million and an equity ratio of 60%. Operating cash flow is slightly up year to date with a strong start in the first quarter in 2025, followed by a somewhat weaker second quarter, and now in the third quarter again showing year-on-year growth with a total operating cash flow of close to €200 million year to date as of end of September. When it comes to earnings per share, we can also conclude an increasing trend over time, and as of end of September, the EPS has increased by 12% compared to the same period last year and now amounts to €1.05 per share compared to €0.94 accumulated as per the same period last year.
Now back to you, Pontus, to present a trading update and to give some more details on the share buyback program that was initiated earlier today.
Yes, thank you, Martin. Now let's have a look at how the fourth quarter has started. The average daily revenue in the fourth quarter of 2025 up until and including the 19th of October was 2.1% higher than the average daily revenue of the full fourth quarter of 2024. About the share buyback program, the Board of Directors has decided to initiate a share buyback program of €40 million of Class B shares in Betsson. The buyback program starts the earliest today, on the 24th of October 2025, and continues to the 30th of April 2026. The buyback program will be carried out in accordance with the so-called Safe Harbor regulation. Now let's quickly sum up the highlights of the third quarter of 2025. We saw continued profitable growth and strengthened market positions in the third quarter.
Group revenue was up 6% year-over-year, driven by Western Europe and Latin America and the Casino product. Casino revenue was at a new all-time high. EBIT was up 4% year-over-year. The growth figures should be seen against the backdrop of challenging comparative figures for the third quarter last year, which included the European Football Championship and the Copa América. We faced FX headwinds in the past quarter in both our B2C and B2B businesses. The share of revenue from locally regulated markets was 64%. We have a strong balance sheet with record €220 million in net cash. Now let's move over to Q&A, and we welcome your questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Georg Attling from Pareto Securities. Please go ahead.
Morning, Pontus and Martin. I have two questions, if I may. Just starting with the morning's news on the buybacks. Thanks for that. It's been long awaited, but I'm just wondering what's the reason for you actually pulling the trigger on this right now? Is it just merely a consequence of the net cash ballooning, or is it fewer M&A opportunities on the line or devaluation or anything else? Thanks.
Hi Georg. As Pontus mentioned, we are now in a position where we had the highest net cash ever, and this is a decision taken by the board to kind of better reflect a nice and sound capital allocation. We believe that this is not impacting at all any kind of future M&A agendas or any future organic growth initiatives. This is just a way to kind of balance and look at the proper capital allocation.
Correct, Martin. We can add to that that it's not in any way so that there are less M&A opportunities and that that should be a reason for the buyback. We have a full box of cash, and we're investigating several opportunities as we speak, as we always do for M&A. This has nothing to do with the climate for M&A.
That's very clear. My second question is just more high level on the strategy. The partnerships with sports clubs, they're becoming quite many. It seems like you're shifting quite a bit of marketing maybe from Casino to more sports-focused marketing. Just wondering if this is, you know, what we should expect going forward also and how you balance your investments in sports versus Casino. Thanks.
Yeah, I would say that sports is a very good way of marketing the brand, and it goes for both Casino and sports. I think the most clear example of that is what we can see now in Italy, where we do a very strong sports and very sports-oriented sponsorship with Inter, but still we see the Casino marching on. This is being able, as we are now, to sponsor large clubs that have a global reach. It's a fantastic opportunity for us of building the brand and marketing our brand. As we all know, there have been some challenges with restrictions in marketing in certain markets, and taking that into account, the sponsorships is a great way of building a good brand both for Casino and sports globally.
That's very clear. Thank you. That was my question.
Thank you.
Thank you.
There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.
There are no written questions here, so thank you all for attending the conference. Bye-bye.