Welcome to Betsson Q2 Report 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Pontus Lindwall and CFO Martin Öhman. Please go ahead.
Hi everyone, welcome to Betsson's presentation of the second quarter 2026. I'm Pontus Lindwall, the President and CEO of Betsson. Presenting with me today is also our CFO, Martin Öhman. The second quarter featured high customer activity boosted by the FIFA World Cup that kicked off on the 11th of June. Active customers in B2C were up 32% year-over-year at a new all-time high level. Group revenue amounted to EUR 310 million, which was also a new record. Customer deposits, including both B2C and B2B on a gross basis, were down 7% year-over-year. As in previous quarters, the strongest growth came from Latin America, which grew by 32% to new record levels and is now our largest region. The increase was broad-based and boosted by the FIFA World Cup, which contributed to high activity among both new and existing customers.
Peru and Argentina were the region's strongest performers, thanks to continuous product investments, strong brands, and well-targeted marketing activities linked to the World Cup. Revenue for the B2C operations increased by 14% year-on-year, also reached a new record level. B2B revenue, on the other hand, remained at a lower level than in the corresponding quarter last year. The trend has stabilized, but at a lower level than during the comparative period. Our strategy is based on a balanced mix of B2C and B2B initiatives, we are working hard to return to growth in B2B with both existing and new customers. EBIT was EUR 42 million in the quarter, down versus last year, but significantly up from the previous quarter. The EBIT margin was 13.6%, lower than in Q2 last year, but up from the previous quarter.
Casino revenue increased by 2%, while sportsbook revenue was up 1% year-over-year. The sportsbook margin was 10.5% up from 9.5% in Q2 last year. Our balance sheet remains strong. We ended the quarter with a net cash position of EUR 128 million. Our main marketing activities in the quarter were focused on the FIFA World Cup that kicked off in June. This is the largest event in football worldwide. Ahead of the event, we launched a new global ad campaign called the Betsson Football Festival, which is a concept built around the passion and energy of football fans worldwide. The campaign consists of a global TV commercial with a newly created anthem, specifically for Betsson, a song that is now available on Spotify.
We also launched Pride of a Nation, which is an in-depth football talk show featuring players from four of Betsson's sponsored top clubs, Inter, Club Brugge, Atlético Nacional, and Racing Club. In addition, we launched a World Cup podcast for the Latin American region with experts, hosts, and guests. Betsson's engagement in Padel continued in the second quarter with two main sponsorships. We were the official sponsor of the Buenos Aires Premier Padel P1 in Argentina, as well as an official partner of the BNL Italy Major Premier Padel in Rome. In the second quarter, we continued to advance our positions in Italy, gaining market shares in both casino and sports betting, supported by our sponsorship with Inter. Inter had an amazing season and won the Italian Double, which means winning both the league and the cup in Italy. Betsson's gaming sites are largely operated on a proprietary platform.
The platform manages payments, customer information, account management, as well as the games. Within Betsson, artificial intelligence, AI, has been an important factor supporting, for example, customer services and various predictive tools. Lately, AI is being used to drive efficiency across all operations in the group, including marketing and product and technology development. Development work during the quarter was focused on preparations ahead of the FIFA World Cup. For example, capacity within the platform and the sportsbook was expanded and stress-tested in various ways to be able to handle up to five times more traffic than usual.
For the sportsbook, several improvements to the customer experience were introduced, such as new multiplier features based on the number of goals scored, Goal Rush, as well as the option to let the player coming in from the bench take over a bet placed on the player who was substituted, thereby keeping the bet alive even after the substitution, Super Sub. 376 new casino games were launched during the quarter, of which 32 were exclusive to Betsson. Several new payment solutions were integrated across some of the group's most important markets. Now I'll hand over to Martin for a closer look at the financials.
Thanks, Pontus, and hello, everyone. As we heard Pontus mentioning, the second quarter was a solid quarter with all-time high revenue and increased operating income compared to the previous quarter. Many KPIs are trending the right way with a lot of all-time highs following increased activity related to the first part of the FIFA World Cup. With that said, let's kick off this section by starting with some KPIs before we go into the details of the financial numbers. Customer deposits in all gaming solutions, including both B2B and B2C, are down 7% compared to the same period last year. Number of active customers is the highest number ever and sums up to more than 1.8 million customers in the quarter, an increase of 32% compared to last year.
The gross turnover in Sportsbook across all bets and gaming solutions was down 12% compared to the same period last year and amounts to approximately EUR 1.3 billion. This number also includes both B2B and B2C. Sportsbook margin was 10.5%, which is higher than the 9.5% margin in the second quarter last year, and higher than the two-year rolling average margin of 8.9%. Sportsbook revenue slightly increased by 1% compared to last year and amounted to EUR 91 million, which together with the revenue in Q4 2024, is the highest sportsbook revenue ever for a single quarter. The casino turnover is down 9% year on year, but casino revenue increased by 2.5%. Casino revenue represented 70% of the group's total revenue in the quarter, and sportsbook some 29%. Reported revenue for the quarter amounted to EUR 310 million, an increase of 2% and the highest revenue ever for a single quarter.
Organic growth year on year was 6%. Revenue from B2C business has grown by 14% or EUR 33 million year on year, whilst the B2B business shows declining revenue year on year by 35%, or by EUR 27 million, explained by decreased revenue from one of the group's B2B customers. Revenue from the B2B business corresponds to 16% of total revenue and B2C revenue to 84%. Revenue from locally regulated markets increased by 17% compared to last year and now constitutes 76% of total revenue, compared to 66% last year. Splitting revenue by region, we see growth compared to previous year in Western Europe and Latin America, whilst the Nordics and the Central and Eastern Europe and Central Asia region, the CEECA region, both are down compared to last year. In the Nordic region, revenue decreased both compared to the corresponding period last year and the previous quarter.
The decline is primarily driven by reduced activity in the casino product. Both Denmark and Sweden reported lower revenue during the quarter, which is the outcome of an active decision to focus marketing activities where we see the best return on investments. The Nordic region represented 9% of the group's total revenue in the second quarter. Revenue from Western Europe increased by 8% year on year or by EUR 5 million, and reported the highest revenue ever for the region in a single quarter. The Italian market reported all-time high revenue in the second quarter and also reaching new record levels in both deposits and turnover. The growth compared to corresponding period last year is mainly driven by the casino product. The sportsbook product continued to show strong growth with increased revenue both year on year and compared to the previous quarter.
The sportsbook revenue is still relatively smaller than the casino revenue in Italy. France reported increased revenue both compared to corresponding period last year and compared to previous quarter. Revenue from Belgium decreased compared to the corresponding period last year, but slightly increased compared to the previous quarter. The decrease is mainly due to lower activity. The Western Europe region represented 21% of the total revenue in the quarter. Revenue from the CEECA region decreased by 15%, or by EUR 18 million. Revenue was negatively impacted in the second quarter by lower license revenue for system deliveries to B2B customers in the region, explained by lower activity in both the sportsbook and the casino products. The B2C segment in the region continued to perform well, where Croatia, Greece, Georgia, Poland, Lithuania, and Estonia all reported increased revenue compared with the corresponding period last year.
The growth in Croatia and Greece was driven by the casino product, whilst the growth in Poland, Lithuania, and Georgia was driven by the sportsbook product. The CEECA region represented 32% of the group's total revenue. Revenue in the Latin America region increased by EUR 27 million or by 32% compared to the same period last year, and was the highest revenue ever for the region, driven by strong underlying activity in both the sportsbook and the casino, with new record levels across sportsbook revenue, casino revenue, deposits, and turnover. Argentina, Peru, and Colombia also reported all-time high revenue in the second quarter, driven by solid performance across both the casino product and the sportsbook product. The Latin America region represented 36% of the group's total revenue and is now the largest region within the group.
Explaining the development in operating income, this picture breaks down the different components in the profit and loss statement to display the impact of the different line items. Revenue is up year-on-year, but not as much as cost of sales, which has increased by EUR 23 million compared to last year. The increase is, to a large extent, explained by the change in revenue mix between B2B and B2C in the quarter, where we this quarter see yet a step down in the B2B revenue as percentage of total revenue and increased revenue from locally regulated markets. Following that, increased gaming taxes by some EUR 15 million. Increase of cost of services provided is, apart from gaming taxes, also impacted by higher payment provider fees following increased B2C revenue.
Year-on-year gross profit decreased by EUR 60 million and amounted to EUR 178 million, which corresponds to a gross profit margin of 57% compared to 64% last year. Marketing spend increased by EUR 4 million compared to last year and corresponds to 16% of total B2C revenue and to some 21% when including affiliate marketing cost as well. Personnel expenses increased by some EUR 3 million compared to last year, explained by increased number of employees, yearly salary revisions, and continued investments in product and technology development. Depreciation and amortization cost increased by EUR 1 million year-on-year as a result of increased capitalized development cost. Other items are slightly up year-on-year, where decreased other operating expenses and increased capitalized development cost are contracting increased other external expenses.
Operating income amounts to EUR 42 million, a decrease of 39% compared to last year, but an increase of 24% compared to previous quarter. The EBIT margin was 13.6% compared to 22.7% last year. Operating cash flow amounts to EUR 60 million compared to EUR 41 million in the same period last year. The deviation year-on-year is mainly explained by changes in working capital, where we this quarter have a positive impact of EUR 21 million, mainly explained by increased short-term liabilities and increased account payables. Cash flow from investing activities sums up to EUR 14 million and relates to investments in own product and technology development. Cash flow from financing activities impacted the cash flow by EUR 78 million, explained by share buybacks, dividend to shareholders of Betsson AB, dividend paid to non-controlling interest, lease payments, and external loans.
Betsson has, as end of June, a net cash position of EUR 128 million and an equity ratio of 61%. Last but not least, Betsson has, in July, signed a long-term multi-currency revolving credit facility of EUR 75 million. The credit facility has a term of two years with an option to extend for an additional year, and the purpose of the RCF is to finance working capital requirements and general corporate purposes, including acquisitions. Pontus, back to you to take us through the trading update.
Thank you very much, Martin. Let's look at how the third quarter has started. The average daily revenue for the third quarter so far, including the 13th of July, has been 13.7% higher than the average daily revenue of the whole third quarter last year. During the start of Q3 in July, customer activity has been boosted by the FIFA World Cup. Now a quick summary of the second quarter. In Q2, we saw record levels in group revenue, sportsbook revenue, and active customers. We reported continued good growth in Latin America and Western Europe, but CEECA and Nordics declined year-over-year. B2C continued to be the growth engine, but again, there was a decline in B2B compared to last year. The share of revenue from locally regulated markets was at the highest level ever at 76%, driving higher gaming taxes compared to last year.
The lower B2B revenue and the higher gaming taxes had a negative impact on profitability in the quarter compared to last year. EBIT and the EBIT margin declined year-over-year, but both increased compared to the previous quarter. We have seen a solid start to the third quarter with average daily revenue up 14% versus the full third quarter last year, boosted by the World Cup. Thanks everyone for listening to the presentation. Let's move on to Q&A. We welcome your questions.
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We have received a question from
The next question comes from Martin Arnell from DNB Carnegie. Please go ahead.
Good morning, guys.
Good morning.
Hi, Martin.
I have a question. I remember when you reported the Q1 numbers, you mentioned that you've seen a stabilization since December in the B2B licensed revenue. Would you say that is still the case where we are today?
Yes, that would be the same answer. We see a stabilization there.
Okay. Can you give any color on the recent development in B2B licensed revenue and how it's done in June, for example, with the World Cup?
Not really, but we can only say that it has stabilized through the quarter compared to the last quarter. Yeah.
Okay. Any color on the strong numbers in LATAM? How much of it is a World Cup boost and how much is your underlying progress there, would you say?
Of course, it's impacted by the FIFA World Cup, again, World Cup is only around 20 days of the quarter. It has an impact, but it's also the underlying growth that we have in the region from the efforts that we've made and from the product development that we do. As we usually say, these big tournaments, they have a bigger impact on customer intake than on the revenues as such.
On the World Cup, I know it's a hypothetical question, but do you think you would have been up in your trading, if it weren't World Cup in the period?
That's a tricky one. I don't know if I can answer it.
No. Fair enough. I just wanted to try. Okay. My final question is on, when we look at your revenue, if we try to look at this year-over-year, it's obvious that B2B license decline is impacting your profitability. It's a similar drop of your revenue in B2B license system as it is in your EBIT year-over-year. Have you discussed taking any cost actions or putting a little bit more pressure on cost reductions given where you are today compared to a year ago?
I would say that we are always very cautious about costs. We have made cost reductions on the first half of this year, more as a housekeeping thing that we always do. If you look at the big cost items that we could really impact, there's mainly marketing and staff costs. We are in a good position. We spend the marketing money in markets where we see good traction. We have a lot of good product development going on, which supports B2C, but also existing and new coming B2B. It wouldn't be wise to cut those costs at the time being. As I said in previous quarter, I'm still very optimistic for our future outlooks. We need to march on and look forward.
Okay. Thanks. I just have one minor question on your sportsbook. Are you happy with the competitive edge of your sportsbook right now? Also, have you considered entering into prediction markets product, which there are signs of traditional sportsbook like yourself is sort of monitoring and going into that area as well?
Yeah, the first part, we're very satisfied with the performance of the sports book and also from a technical angle, what we can offer and the market depths and the special betting options that we have developed that we raised in this presentation. Now, we only have a few games left in the FIFA World Cup, the sports book has technically worked very well under very high pressure. That is something that we can really be proud of and that we are happy about on the technical side. We also made a lot of, let's say, UX enhancements before the FIFA World Cup with a special FIFA World Cup lobby and things like that, made it easy for customers to find things to bet on.
I have received personal feedback from many people saying that this is a very good experience in the sports book that we have now. We're happy about that. Regarding prediction markets, something that we look into and follow with great interest. In most of the market where we are strong, the prediction market model doesn't really fit in the same fashion as it does in the U.S., where they follow a different regulation than the gaming regulation. In our markets, if it was to be allowed, it would fall under the gaming regulations. Again, it's not much of a difference from normal sports betting. It's something that we follow very closely and monitor. Some parts of the user experience that we see there is definitely interesting to look at and monitor.
Okay. Thank you. That's all from me.
Thank you.
There are no more phone questions at this time. I hand the conference back to the speakers for any written questions and closing comments.
There is a question from the credit analyst, Jonathan Andersson from Arctic Securities. Hi, Pontus and Martin. Congratulations on the report and the strong sequential growth. A few questions from my side. Could you provide some color on what the external loan payment in the quarter is related to? First question. Second question, Could you also provide some color on the intended use of the RCF sign after the quarter end? Third question, Do you have any update on the expected timing for the Rhino acquisition?
Thank you for the questions. The first question regarding the external loan repayment, it's actually not the repayment, it's actually a granted loan to our B2B customers. Secondly, the RCF. Firstly, it is a complement to our existing bond financing. The purpose of this is for working capital financing and general corporate purposes, including M&A. Thirdly, expected timing of the Rhino acquisition. That is still the same as we said when we signed the agreement. I think we said it, the intention is to close it end Q2 or beginning of Q3. Since we are now in the beginning of Q3, we are close to sign that. Most likely in the coming weeks or so.
I think that was the last question. Roland, no more questions? No more questions.
No.
Okay. Thank you very much for listening in and see you next time. Bye-bye.