Super Group First Quarter 2026 Earnings Webcast & Conference Call

Good morning, everyone, and thank you for joining us today to discuss Supergroup's results for the first quarter, 2026. During this call, Supergroup may make comments of a forward-looking nature that is subject to risk, but to entities and other factors discussed further in its SEC filings that could cause the actual results to differ materially from historical results or from our forecast. We assume no responsibility to update forward-looking statements other than if required by law. On today's call, we may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for measures of financial performance. We have provided a reconciliation of the non-GAAP financial measures to the most comparable GAAP figures in the press release issued yesterday and available on the Investor Relations page on our website. We recommend that investors refer to the supplementary presentation posted to our website. Today, I'm joined by Neil Minashi, Chief Executive Officer, and Linda Fondweig, Chief Financial Officer. After our prepared remarks, we will open a caller for questions. And now, I'd like to turn the caller over to Neil.

Thank you, Inc. And good morning, everyone. The first quarter of 2026 marked a record-breaking start for Supergroup. We deliver all-time high quarterly revenue and unprecedented monthly active customers. The potters and wagering also reach peak levels, extending our Q4 momentum. These results reflect the strength of our strategy, our brand and our people. As our business evolves, so does our reporting. We are introducing a new reporting structure consisting of two segments. Africa and international. Africa includes all revenue generated across the African continent, while international includes all revenue generated outside of Africa. This new approach highlights the distinct operating models across our core regions, providing shareholders with deeper insight into each unit's drivers and growth potential. The executives responsible for these segments remain unchanged. Africa delivered an excellent Q1. Revenue for the quarter grew 53% year-over-year, with adjusted EBITDA up 21% to $98 million. Sports and casino wages were up 53% and 36% respectively year-over-year. Botswana continues to perform well. I recently spent time on the ground with our team in Nigeria, and the actions we are taking there will strengthen our growth profile as we ramp up execution. The phase roll-up of our Zara Supercoin consumer wallet began in mid-April, with a soft beta launch for our Bestway South Africa customers. Our goal is simple, expand utility and gradually increase customer engagement across our ecosystem. We will reach a key milestone later in the quarter with additional listings on OVEX and VALAR, two of the largest exchanges in South Africa. These listings significantly enhance liquidity and accessibility and provide a solid foundation for broader adoption as we optimise engagement and unit economics. For the international segment, revenue was up 9% with adjusted EBITDA growing 26% to $73 million. European revenue growth of 18% year-over-year was strongly driven by a 29% increase in the UK, where we are capturing market share thanks to record customer acquisition off the back of continued product improvement and a successful Cheltenham Festival. We remain encouraged by Ireland's growth of 13%, with local regulation expected in the second half of this year. In North America, Canada ex-Ontario delivered 16% revenue growth, supported by retention and product enhancements. Despite an increasingly competitive environment, Ontario achieved a post-regulation record for new customers. Alberta, up 22% year-over-year, remained on track for local regulation in July, with a FADE and REGIP method brand rollout. Overall North America, excluding the US, grew 15%. Rest the World saw revenue growth of 8%, with New Zealand growing 6% year over year, which is particularly encouraging after last quarter's 5% E-plus. We remain disciplined while we await the anticipated local regulations framework. Overall, Before, our sports business continues to enjoy strong margins. We are fortifying our sports trading and risk management capabilities ahead of the World This quarter, we implemented targeted changes to materially improve margin resilience within our promotional mechanics, pricing and payout structures. These measures proved their value in February, which was a particularly challenging month for sports due to customer-friendly outcomes. Meanwhile, our casino business remains the super-reliable, steady and constant engine of supergroups. We don't take this for granted. We continue to innovate, extend and improve in numerous and meaningful ways. We have made it easier for our customers to discover content. We are personalising their experiences and we are stepping up gamification and engagement. The result is targeted product and incentive management that delivers strong retention and responsible, consistent and profitable customer behaviour. In effect, a business where 80% of our revenue is driven by predictable, high quality and super persistent annuity revenue streams that offer shareholders unwavering reliability and confidence. With that, I'll turn it over to Alyssa.

Thank you, Neil. Quarter 1, 2026 marked an outstanding start to the year for Supergroup, and I couldn't be more pleased to share these results. We have delivered a record total revenue of $612 million, up 18% year-over-year, while adjusted EBITDA grew 36% to $152 million. Our margin expanded to 25%, compared with 22% in the prior year period. Driven by strong acquisition and retention strategies, average monthly active customers reached a record of 6.4 million, up 18% year-over-year, with March setting a new monthly high of 6.5 million customers total wagering increased 23 percent for sports and 20 percent for casino compared to last year disciplined cost management controlled marketing spend and strong operating leverage are clearly reflected in our results with continuous focus on ai driven efficiencies and high return markets we are well positioned to pursue sustainable long-term growth our balance the shift remains really strong, supported by high-quality earnings as measured capital allocation. We ended the quarter with $422 million in cash. This represents a 20% increase year-over-year, despite returning $152 million to shareholders, including the special dividend paid in February. Our free cash flow conversion of 75% remains strong, reinforcing the confidence that we showed when we recently increased our minimum quarterly dividend target to five cents per share holding on the strong momentum of quarter one we are entering the rest of the year with confidence quarter two is tracking positively with growth opportunities ahead bolstered by an action-packed World Cup calendar our focus on marketing and operational efficiency remains unchanged as a result we are reaffirming our full year 2026 guidance with total revenue expected to reach at least 2.55 billion dollars and adjusted EBITDA to be more than 680 million dollars. I will now hand back to Neil for closing remarks.

Thank you Linda. This quarter underscores the effectiveness of super group strategy and decisions. We are building momentum across regions, bolstering margin resilience and enhancing our product and customer experience with a strong start to the year strengthening our casino business an attractive global sporting calendar ahead and a strengthened leadership team focused on execution and efficiency supergroup is well positioned for the remainder of 2026 and beyond operator please open the column for questions thank you We will now begin the question and answer session.

If you would like to ask a question, please press star 1 in your telephone keypad. If you would like to withdraw your question, simply press star 1 again. Your first question comes from a line of Michael Hickey from StoneX. Your line is open.

Hey, Neil, Melinda, congratulations, guys, on a great 1Q. Two questions from us. Neil, just on, Melinda, on your 1Q performance here, Obviously, a strong beat versus expectations, and the mild growth is exceptional, plus 18%. I think you get a record of $6.5 million in March. So I guess how are you thinking about the decision here, Alinda, to reaffirm your guidance for raising for the full year at this stage?

Okay. So hi, Mike. So, our guidance, as you know, was for revenue greater than $2.55 billion, and very importantly, EBITDA greater than $680 million. So, we were confident about those numbers when we told them to you in February. Now, after Q1, we remain confident, but this isn't the first time that we've outperformed, like in Q1. We've never increased guidance at this stage of the year. It's just not something we do so early on in the year. We obviously are focused, as you know, on executing and delivering growth, and we're not finessing predictions and guidance. It's really this simple.

And just to add to that, I think it's important also to note we're just not in that beat and race treadmill game, as you all know. We are tracking ahead of our expectations, and we're very encouraged by what we're seeing in the momentum, but we're only 25% into the year.

Nice. Thanks, guys. Next question from us, just on the World Cup, you gave some great data here in your deck. It looks like 88-plus percent of your revenue generated from World Cup participating markets and 73% of your GGR from football. So obviously it looks like the World Cup here is shaping up to be a significant catalyst for you guys, Q2, Q3. So how should we think about the potential uplift of both player activity and revenue during the tournament period? And then the follow-up, you know, how should we think about the timing and scale of the cross-sell of these incremental players to casino, which, of course, would make this World Cup catalyst durable? Thanks, guys.

All right. So, I mean, listen, I love this data point, but basically, and I thought a lot about this, that 40% of the countries we operate in are participating in the World Cup, and that represents almost 88% of our 2025 revenue. So what we will get is we're super confident about the engagement of our customers in these markets. We've obviously got a strong product stability enhancements we've done at the head of the tournament, and we're focusing on the scale and the customer experience. From this World Cup to the 2022 World Cup, the 2022 World Cup was played in the winter months, it was played in November and December, and it's 64 matches. Because there are more teams, in this year it's now June and July, it's 104 matches, so literally 63% more matches with more engagement. So for us, it's all about giving us the content for our customers, and the first half of the competition, because they are 40-18, they might be, you know, in our business, it's all about the favourites drawing or losing, so hopefully let's see how the first half goes. So obviously as they get into the knockout stages, which will be at the beginning of July, we will see what happens there.

But again, it's about engagement in the sports and then the cross-sale into our casino yeah and the cost are normally like 60 to 70% in the casino nice awesome thanks guys good luck your next question comes from the line of Ryan said all from Craig Hallam your line is open hey good day Neil Inc Linda want to stick just one follow-up on the guidance are you willing to comment on trends you've seen in April and may I get the reason to reiterate this early in the year but I'm curious if you've seen any deceleration in the business or any trends or anything to really give you concern.

All right. So this quarter started off great. Obviously, you know, in February, remember, quarter one had a big loss in February on one day when all the favorites basically won and our customers won. So in fact, we haven't seen any deceleration. Remember, our guidance is greater than $680 million. dollars. So we are confident about that. And remember, our business is 80% casino, stable, consistent, and we have annuity income on top of that every single day.

Second question, just UK tax effect went in effect recently here. What are you seeing in the market from your competitors? What have you done from a marketing, promotion, et cetera standpoint? And really nice quarter results and momentum, it seems like, in that business despite that but just curious for kind of an industry and company update there.

Yes, thanks for the question. We called out around 6% free mitigation of 2025 EBITDA as a hit. It's around the $30 million hit. However, we have started to pull multiple levers in order to mitigate that as we said. We've obviously done, even with the April numbers already in effect, we seen that massive impact because of operating leverage in the way we manage our marketing. So we're still in a confident position to see this through qualitative.

And also we did call out that it would say it only kicked in on 1 April, so only about a couple of weeks and five weeks in, that the marketing rates will start coming down when everyone starts doing their numbers. You know, they have to get used to this, that new world of factors, and obviously we have to be efficient. And that's part of our two segments, being international and Africa and bringing international together has effectively given us those operating leverage. Very good.

Thanks, guys. Good luck. Sure. Next question comes from Alina, Bertie McTarran from Needham & Company. Your line is open.

Great. Good morning. Thanks for taking the questions. First, I just wanted to ask about the new breakdown in terms of EBITDA. I greatly appreciate being able to see Africa versus international. Alynda, can you just talk about the margin opportunity in Africa, you know, any – maybe any thoughts on incremental margins just as the region continues to grow, how we should expect – thank you.

Thanks for the question, Bernier. So, it's a – I'm glad to be able to share that transparency now to the market to see what it brings as two supergroups, the difference between Africa and international, so it's not so heavily weighted, you know, the expectation probably was that it's very heavily weighted towards Africa. Saying that, that gives us the ability to have really strong possibilities to still have that margin expansion, and we always do it in two kind of strategies. The one is our return on investment, how we make sure the marketing that we spend in that jurisdiction is very localised, it's spoke for our customers, and we see strong returns And then secondly, our product mix is getting that product really fit for purpose for that local market, getting the pricing right. That really, really helps us with the expansion of not just in South Africa, but the rest of Africa, the margin bottom line.

Yes, and then I can add, we've got huge cross-pollination between the international side of the business and the African side, and I think we've really, in the last six months, have scaled that up, from the call centres, same software, to the risk and fraud, to all of that. So we really are seeing super-deficient costs coming through there. And also in Africa, we've been pushing on different sports, e-soccer, cricket, tennis, et cetera. So it's all coming together. And you should also mention our trading. We are really getting stuck into the trading of all the various sports.

Understood. Thank you both. And then in the slide deck, it references Nigeria ramp up underway to strengthen growth profile. What would success look like this year in Nigeria for you guys?

I think that Nigeria is an interesting one. We've been on the ground there. Super interesting. I think what we have seen in Africa and maybe led by Nigeria is that the country as a whole is doing much better, the free flow of the currencies improving. So we have to, listen, double, triple our business size there at least twice. So Africa, as you know, it's the largest population in Africa. It's a growing term, and we're getting our product rights. And, again, we can build or buy across the way, and we can do both. So it's really top of our mind.

Your next question comes from a line of Jed Kelly from Oppenheimer. Your line is open.

Hey, great. Thanks for taking my questions and another great quarter. Just on the margin cadence between the two segments, how should we be thinking about that, particularly in the international margins? I know you've got the U.K. taxes, and then you're launching Canada in July. So can you just give us a sense how we should be thinking about that? And then with Africa, should we expect revenue to grow faster than even over the medium term?

I just have a question. First of all, on the international side, how we look at international is the continued customer momentum, so we – our assumptions in the guide is definitely on organic growth assumptions. There's no aggressive persistency assumptions made in there, but we're also in making sure that we remind that – have that marketing discipline of around 22 per cent, and then we caveat then to Africa, that 22% of marketing as a guide towards the spend of revenue is much lower in Africa because of the jurisdiction and the localisation of marketing. So that gives that ability for the EBITDA margin to grow as strong as the revenue market targets that we set for Africa. But the interesting thing here is that it's a very equal business. You know, you have, even though you have probably most of the scale of the growth of the customer buyers out of Africa, the revenue and the market, the revenue and the EBITDA margin growth is very similar.

And I could just add, and this is probably a point on Alberta, it's very different Alberta regulation to Ontario. Ontario was what we call the big bang approach, you had to move all your existing customers over onto the new software on day one before you could even market the new software. In Alberta, you can market to the new software first and have a period of three months or so to be able to move your existing customers over. So that, for us, is a massive, massive difference. We tried for that in Ontario, but it didn't happen at the time. But now it can happen in Alberta. Thanks.

And just as a quick follow-up, how should we view World Cup net wind margins relative to your historical net wind margins?

You've got to, I hope that the smaller teams like Haiti, etc, just draw with the bigger teams in the early rounds. The early rounds might be a little bit hairy, but it doesn't matter, because it's all about if they win on those games, what happens on the next games, and most importantly, what happens in our casino. So, let's see. I think it's going to be interesting, we've never had this many teams, but I think on the plus side, you've got engagement with so many games, like 63% more gain matches, it's actually unbelievable. So I think the audience and what we're going to have in our ecosystem should be really, really, really good. Thank you. Yeah, and yeah.

And the cost of 60% that you pulled up here, I think that's the big benefit as well.

Yeah, absolutely. All right, looking forward to it, thanks.

Your next question comes from a line of Clark Lampin from BTIG. Your line is open.

Thanks very much. Maybe I can start with a little bit of a follow-up on Jed's last question. I think in the past, your sportsbook margins have basically peaked at sort of an 18% to 19%-ish level, maybe a little bit higher. But I guess what I'm wondering is after you sort of fortified the sports trading and, I think, pricing, I'm paraphrasing, I guess, from the language in the presentation, But what I'm curious is, are book-friendly months, you know, potentially going to produce higher structural sports margins now on a go-forward basis? A quick follow-up question would be on the leadership team comments that you guys put in the release. Sorry if you've already elaborated on this in the release or in the presentation, but if not, could you give us an update on sort of where you've made hires and where you believe you're sort of strengthening the overall business now? Thanks.

All right. So, firstly on the sports margin, we obviously put out there that, you know, that's the average of the two sports books, International and Africa. But yes, as we fortified our pricing and the promotions we give in the sports book, we would think in months where favourites are not winning or destroying, that we are seeing an increased margin. And that's absolutely, that's for us, but our trailing 24-month average is almost at like 13%, 13.1. And that means Africa's higher and then international's a bit lower, but we've seen increases in the international. When it comes to our leadership team, listen, for me and Alinda and actually all of us, even our board, it's all about having the right people in the right seat, and then you will create a super team. So we've appointed Kirsty Ross as our chief operating officer. I mean, she was our chief of staff, but as operations officer, I think we are seeing huge, huge efficiencies. And then we hired Justin Stock, who's been our external counsel and helped us deliver the business to where it's today. We've finally taken him in-house, and he's our big head of commercial and M&A. And, of course, as you know, we've got along Ben David as our CTO, so we really have a great team at the C-suite level of supergroup. But then when you go into the rest of our companies, we are absolutely got great people there. And with the international and Africa being these two segments, we're bolstering all of this. But in order to grow and keep growing, it's about our people, it's about our platforms, it's about the tech that we're going to use, and we need the best of the best to help us make these decisions. And that's what we have done until now.

Neil, if I could just follow up quickly. So is the goal of, I guess, some of that hiring activity to continue driving your corporate costs and the sort of corporate e to die that you've now itemized for us down, or maybe it's something different? I guess I'm just curious what you're driving at.

No, both. Both. I think it's definitely always to centralize the costs, not to go to so many third parties. Remember our legal fees can be a lot, especially if you do M&A and other things, but with AI, et cetera, it's to definitely bring it down. and be able to do much more volume based on our current cost base. So, if everything's a gain, we've got to make the right decisions, and we have to make them with the best information we have. And for that, I need the best people around us. Appreciate the color. Thank you.

Your next question comes from Alina, Chad Benham from Macquarie. Your line is open.

Hi. Good morning, Neil and Alina. Nice quarter. I wanted to start with the Czar Supercoin adoption rate, kind of where this is, how it compares to your expectations. I know that you said in the slide deck, you know, you have plans to roll it out further in the back half, but I just wanted to test your temperature on how this is going thus Okay.

So remember, we did call out. We said it's going to take adoption. It's going to take time. And so obviously we've done a beta now in South Africa. So it's gone quite well in terms of our beta, but it's only a beta. We are obviously getting the utility of the coin in there. And what we have to do is it's going to be a slow process to get them adopted. But it's not only about the super coin, it's also about the processing fees. Remember to remind everyone in Africa, a single billion off the taxes, expense, are these processing fees. And especially on the sportsbook where they're depositing in, cashing out, redepositing in, this in and out of the same money costs a lot of money. So that ecosystem, we are getting right. And we've just got to be patient with disaster in Bitcoin and see how it goes. In other markets, we obviously will bring it there once. We've seen how it works in South Africa. And there's different legislations. Obviously, we all have the legislation in our other seven markets in Africa. and then we hope to bring it there as soon as we get this part right in South Africa but very encouraging it's something new it's new for the consumer it's so let's see how we go but something that was new a year ago is now normal now so that's kind of what we base it on you know that's great thank you and then with respect to the M&A environment obviously strong Q1 you're tracking at at least ahead of expectations for the year, 400 plus million of cash on the balance sheet.

How are you thinking about M&A opportunities given your position of strength?

Thanks for the question. We still, as we've always been highly selective on what we pursue, we don't need M&A to hit our plan. Our plan is based on consistent organic growth. That will be just an added bonus if the right opportunity comes along and at the right price. And it's supposed to be a bolt on, you know, to improve our business overall if we pull the trigger on something. We're also looking at vertical opportunities such as improving technology products or maybe marketing and efficiencies, but in the long run, there's always something on the table that we're setting, and we've got the right budget sheet for it, so we'll just remain disciplined until the right opportunity at the right price comes.

And I always say to Linda, we always say to each other, we're not overpaid for stuff. If it makes sense, we'll do it. And I think as we've got a facility, I think you've seen lots of our competitors have acquired over the last five or ten years, and when you're laden with debt after that, these businesses have to perform. So we've still got 75% free cash flow because that's what we do. So if we found the right one, we'll do it. But we are not overpaying, and that's not how we've operated up until now. Thank you.

Your next question comes from line of Matt Weber from Kennecord Genuity. Your line is open.

Thanks so much for taking the question, and congrats on the strong quarter. I just wanted to ask if there's any update you could share on the Apricot transaction and just maybe more broadly how that transaction is framed in your key product initiatives for the balance of the year. And then, relatedly, could you just give in AI as a topic du jour of every earnings call? Could you maybe just touch on what you were doing there in that space? Thanks so much.

Okay, so the apricot, we finally closed the transaction at the end of February. We've got all the IP, so the sportsbook finally is owned by us. So we're very happy about it. We've done the process of moving all the development resources that supports the sportsbook. They're now becoming part of our team. Expects over 100 people, even more, to move over to Supergroup, be part of our structures, how we work, what we do. So we're really starting to see overall real-life cost savings will obviously come over time. But for us, it's about the product. It's near our product teams here. The teams are together. And I think we've seen it with the global Bestway Sportsbook. We've improved speed, flexibility, efficiency, so there's lots to come there. You know, we really are pushing, pushing hard. And, you know, since we've existed in the US, I've got these teams not having to worry about the eight states in the US. We can worry about all the markets that we're currently in.

And then, just on your follow-up question on AI, I think it's front of mind for everyone. It's definitely, at the moment, for us, two initiatives that we use for risk and fraud management. there's definitely some elements being used in development and allowing us to be more efficient and more faster in deploying certain parts of our development and our businesses. It's definitely starting to have a big impact even on my world in finance and how we reconcile and look at accounts and disclosures. So it's definitely all in all enhancing efficiencies, but we have to be disciplined. We're working closely along. Our CTO is taking lead on making sure there's a custodian that creates the boundaries around this so that we are business around it. But my advice, I think the only thing we know is that it's changing fast.

Fair enough. Thanks for the call.

Your next question comes from a line of Jordan Bender from Citizens. Your line is open.

Hi, this is Isabel Flavin on for Jordan Bender. Thank you for taking our questions. We just want to ask about Europe. What drove the app performance there, and do you expect this to continue throughout the year? Thank you.

Yes, so I think Europe, again, as we exit a country that we still see a faster possibility, U.S. being one, Belgium, Italy, et cetera, we focus on the U.K., Spain, Ireland. And so if you take the U.K. as an example, as we're dropping more product enhancements, the brand is well known. We are seeing the stickiness of our customers, our marketing being really driving record acquisition because finally the Bedway product in us are competing head-on with our major competitors there. Same with Spain, we've got focus to casino, we've got new stuff happening there, Ireland as well. So it's all about the front office being the product and our brilliant back office coming together. And then in Africa, we have got a brilliant product and we've got a back office and we're improving the back office to make it as good as the international side. And if we get all of those two worlds working, that's when you see Nevada And that's where you see our retention rates, et cetera, going and increasing.

Okay, thank you. And there are no further questions. I will now turn the call back over to Neil Menaschi for closing remarks.

So thank you, everyone, for joining today's call. We are really proud of our teams across the globe and their super performance this quarter. We are very encouraged by the momentum we have built early in the year, and we will speak to you again soon. Thank you. This concludes today's conference call. Thank you for your participation.

You may now disconnect.