SGHC Ltd (SGHC) 2025 Q4 法說會逐字稿

Hello everyone, and thank you for joining the Super Group fourth quarter and full year 2025 earnings webcast and conference call. My name is Lucy, and I'll be coordinating your call today.

(Operator Instructions)

It is now my pleasure to hand over to your host, Nkem Ojougboh, Head of Investor Relations to begin. Please go ahead.

Good morning, everyone, and thank you for joining us today to discuss Super Group's results for the fourth quarter and full year 2025.

During this call, Super Group may make comments of a forward-looking nature that is subject to risk, uncertainties, and other factors discussed further in its SEC filings that could cause its actual results to differ materially from historical results or from the company's forecast. Super Group assumes no responsibility to update forward-looking statements other than is required by law.

On today's call, Super Group 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 prepared in accordance with GAAP.

Super Group has provided a reconciliation of the non-GAAP financial measures to the most comparable GAAP figures in the press release issued yesterday and available in the investor relations page of Super Group's website.

Super Group recommends that investors refer to its supplementary presentation posted to the company's website.

Today I'm joined by Neal Menashe, Chief Executive Officer; and Alinda van Wyk, Chief Financial Officer. After our prepared remarks, we'll open the call up for questions. And now I would like to turn the call over to Neal.

Thank you. Good morning everyone. 2025 was a standout year for Super Group. We refined our portfolio by exiting USI gaming, allowing us to focus on markets where we expect clear, durable advantages and where we believe we can win decisively. Concentrating resources in our core regions in this manner has paved the way for the record growth and operating leverage that we continue to see today.

Despite some unfavorable sports outcomes late in the year, Q4 was another record breaking period. Monthly active customers exceeded 6 million, a new record, and deposits also reached new heights.

In preparation for a strong 2026, we successfully launched the Zar Supercoin in South Africa, the first step in our broader digital payments infrastructure. We are also pleased that we've received the final regulatory approval of the apricot transaction, which strengthens our sports book technology platform and begins the process of realized cost savings.

Turning to our operational performance, we close the year with significant momentum across property markets.

Europe saw strong revenue growth this quarter, up 23% year over year, led by a 37% increase in the UK. In Spain, revenue grew 5% on the back of strong retention and product improvements.

In Germany we remain encouraged by the upcoming H-1 slots launch and the operational efficiencies we continue to implement across the market.

Africa grew 27% for the full year against 2024, with Botswana outperforming since launch and South Africa delivering strong wagering growth and record casino volumes.

Compared to fourth quarter 2024, Africa was up 7%. This was a very solid result given last year's robust sports margin and this year's customer friendly outcome. The underlying strength of our African business is highlighted by 31% growth in sports wages and 32% growth in casino wages year over year.

Overall, Africa remains a powerful growth engine supported by continued customer momentum and high brand loyalty across the region, and we continue to assess our strategy in Nigeria.

In North America, Canada ex Ontario increased 15%, supported by strong customer retention and acquisition coupled with improved product rollout. In Ontario, product improvements also drove record engagement and deposits. Alberta continues to show solid growth and we are preparing for regulation in Q2. Overall, North America, excluding the US grew 10%.

APEC revenue rose 6% year over year despite New Zealand's 5% dip reflecting our disciplined weight on the sidelines ahead of the long anticipated local regulations framework.

We continue to undertake product innovations in support of future growth. During the quarter, we improved sports promotional mechanics for BetwayX Africa, leading to a 400 basis point sequential increase in the sports book parla wager mix. In Africa, in the beginning of this year, we completed the technology migration in all our markets.

We are now implementing AI-driven hyper personalized bet pricing to translate real-time liability analysis, market data, and customer behavior insights into dynamic odds. We are confident that this will improve our trading efficiency and help to mitigate volatility.

These upgrades are all part of our broader focus on improving customer engagement, optimizing the efficiency of our our promotional mechanics, and building scalable features that support long-term margin quality.

In South Africa, our Supercoin has two significant catalysts expected in the coming months. First, the launch of the Supercoin wallet, which will give customers a seamless way to acquire, hold, and redeem directly within our ecosystem. We expect this to increase engagement.

Second, we are preparing additional exchange listing to broaden access, deepen liquidity, and expand distribution. We believe that together these these developments will position us well for this year. With that, I turn it over to Alinda.

Thank you, Neal. 2025 was truly exceptional. Our total revenue for the year reached $2.2 billion reflecting a 22% increase compared to the previous year.

Adjusted EBITDA saw an increase of 57% year over year amounting to $560 million.

This represents an impressive margin of around 25% compared with 9 19% in the prior year.

Despite the challenging year over year benchmark, total revenue grew 8% to $578 million during the fourth quarter, with adjusted EBITDA up 11% to $139 million.

Record deposits were driven by casino momentum and an active sports calendar.

Turtle wagering activity remained robust, with an increase of 20% for sports and 17% for concina compared to last year.

In addition, average monthly active customers reached an all-time high of 6.1 million for the quarter, a 16% jump from the same period in 2024.

Our results demonstrate a commitment to cost discipline, and we maintained operational and marketing efficiencies.

This is supported by further AI enabled improvements.

Enhancements in customer support, product customization, and port trading are ongoing.

The consistent strength of our business lies in our effective conversion of EBITDA to free cash flow, as shown by this year's impressive 72% conversion rate.

We closed the year with $513 million in cash, up 32% year over year, an increase that underscores the resilience and durability of our business model.

Our capital allocation strategy includes a commitment to rewarding our shareholders. Over the course of 2025, we returned $156 million to shareholders, including $20 million in quarter 4.

With an additional special dividend in excess of $125 million paid this month.

Our robust cash generation allows us to maintain this discipline while funding organic growth.

Turning to guidance, 2026 is off to a strong start, aided by an impressive active customer numbers even higher than last quarter.

After an unusually high performance in January, Sport hold has returned to levels typically the same as our trailing 12-month average of last year.

For 2026, we are guiding to total revenue of at least $2.55 billion an adjusted EBITDA of more than $680 million.

This reflects purely organic growth, continued customer engagement, and a FIFA World Cup uplift. Notably, this guidance assumes ongoing marketing discipline at roughly 22% of revenue.

UK tax increases taking effect from April, Alberta regulating locally from mid-year, and continued operating leverage supported by a strong balance sheet.

We are really pleased to share that the board approved an increase of our minimum quarterly dividend target from $0.04 to $0.05 per share.

The first payment will be made towards the end of March, with the board reviewing this on a quarterly basis thereafter.

And to conclude, we expect to release full financial statements in April, consistent with prior periods. I will now hand back to Neal for closing remarks.

Thanks Alinda. Looking ahead, we are really excited to continue scaling our strongest markets, exploring expansion into new African territories, and we believe that our teams are well prepared for upcoming regulation.

The expanded World Cup schedule offers a driver for global engagement, setting the stage for a strong 2026. To our employees, thank you for an exceptional year and to our shareholders, thank you for your ongoing support.

I'll now hand over to the operator to open the call up for questions. Operator?

(Operator Instructions)

Ryan Sigdahl, Craig-Hallam Capital Group.

Neal, Alinda, good day. Congrats on the strong business trends.

I want to start with the customer friendly outcomes in December.

Curious how much that impacted results if you can quantify that, and then secondly, how that's translated into potentially greater recycling of profits in play as you look at January and February and if there's any notable trend differences to call out between sports and casino as we start the new year.

Okay, so, hi, yeah, so the quarter started off really great but obviously in December the sports outcomes were more customer friendly. Obviously in the Africa Cup of Nations, Champions League, and the English Premier League. You recall quarter 4 2024 we had a hard comp of like 16% and we finished the quarter with sports at 11.4%.

December was meaningful given that we estimate it was probably about a $20 million ZAR EBITDA impact from these customers but obviously it did flow through on our side in January as as Alinda said we really had a fantastic January, but again, it's all about the favorites and drawing or or losing, but this is what we sell the favorites obviously sometimes can can win all the time and we've seen lots of Lots of activity obviously in our casino. If you compare our casino for 2025 to the prior period, it's up significantly.

Great, just given the strength of the business, and some recent, news, I guess, can you explain what the company is doing from a charitable standpoint with that way cares reinvestment in the community? I saw Mr. Beast yesterday.

Certainly seems like a lot of good things you guys are working on. It's been spun a little bit negatively, by certain people, so curious just. The level set what you guys are doing with your communities and reinvestment and then secondly linda if you can just explain at a high level all those expenses and the spending flows through the income statement.

Perfect. Before I have it to Linda onto the county, let me give you some context of Betway Care at high level. Betway Cares is our charitable trust in South Africa, dedicated to community initiatives, clean drinking water, sports development, arts, cultural access and with obviously the goal of driving long-term impact. So we do vast amounts of charities across the spectrum. Linda can now talk to covering how that flows through our income statement.

Yes, thanks Ryan. On the accounting side, IRS requires to consolidate 100% of the earnings of the South African entity, as well as 100% of the expenses of the minority, which is Bets, and the operating expenses of Betw Caes is expended as general administrative expenses, and what we spend is shown as restricted cash on the balance sheet.

Great, thanks guys. Good luck.

Thank you.

Jordan Bender, Citizens.

Morning everyone. Thanks for the question. Two for me. One on South Africa, we saw, potential flare-up in tax changes towards the end of last year. Are you able to help us just better understand kind of what you're hearing and seeing on the ground and maybe the outlook for that? And then the second question, so we have 26 guidance, you guys gave us your 28 targets that your investors.

A couple months ago or back in September, from what the guidance range maybe tells us is you can potentially get to the low end of your 28 targets by this year. So are you able to just help us understand, what you're seeing might be running better than expected, when you gave that outlook back in September?

Thank you.

Okay, so I'll start with South Africa. There are obviously no new updates. All the all the operators in South Africa are expected to admit their responses at the end of February to the government paper and then it goes through different committees. So we will see how that goes.

From our perspective when it comes to all these countries, it's all about operating efficiently, right? And that's what you'll see in our guidance and our margins. So, It's all about that every operating leverage that we keep talking about in this business all sits at that extra revenue coming in at almost 50 to 60, 60% to our bottom line. So from the guidance for next year at 680 million, we hope by like 27, 28, we will increase that as the operating leverage kicks in and our marketing efficiencies across the world start playing out.

And maybe just to add to that, we made specific reference to long-term goals more than guides. And what we had to embed this quarter for the guidance of 2026 and when we put it all together is just to keep in mind the effect of the UK tax that is in effect in April of 2026 as well as the change over to regulation in Alberta which we embedded in the guidance of 2026 halfway halfway through the year.

The interesting thing as well is we build our guidance on our, continued customer momentum. I think we spoke a lot about our, cohorts and then, and that is, even though we have a lot of confidence in what already exists within our business, we remain, quite conservative in how we roll it out, in the next couple of years.

Understood, thank you very much.

Bernie McTernan, Needham & Co.

Great, thanks for taking the questions. Maybe just to start, or I have to, just wanted to ask on Nigeria. So the slide deck, mentions assessing a new plan in Nigeria. Just wanted to get a sense in terms of what's contemplated in the guide and what's the timeline of the role of that new plan and then also discussion on the final regulatory approval for apricot.

So I just wanted to make sure was this was apricot always treated arm's length, since the original deal announcement, I think a couple of years ago at this point. And, but more importantly, what will you be able to do now with the final regulatory approval that you weren't able to do before?

Thank you.

Okay, so just obviously in Africa we continue to operationalize in all the countries within Africa and we're still refining our strategy in Nigeria. We expect low single-digit World Cup tailwinds there, right, so Nigeria is more to decide what what we're doing, which. Part of the market, we are setting, and we've got one or two other African countries we are looking at there. But we see lots of low hanging fruit in all our other African markets, operationalize in the same way we've operationalized the other markets across the world.

When it comes to apricot, We purchased that, we purchased the sports book technology, bring it in-house, just to explain that sports book technology is the best way outside of Africa. We now have full control over it, so it means that all the staff, etc. Come into our organization and. Then we can even do more product enhancements with the software because now we own that part of it.

Yeah, and maybe just to add to that, even though the transaction was reported on and details explained in the two that we previously published last year, we only could complete the transaction now when we had regulatory approval to operate this product in different jurisdictions.

Got it, thank you both.

Jason Tilchen, Camcord.

Good afternoon. Where you guys are? Good morning, from here in New York. Just wanted to start with, a question. You obviously, provided some extra balance sheet, flexibility, wondering if you could just remind us a little bit of what some of the key considerations as you contemplate potential M&A opportunities are. What would be sort of the type of acquisition you'd be focused on here in the near term? I mean, is there any sort of country or region in particular you feel you could be strengthened, via M&A?

Okay, so as when it comes to M&A we always are highly selective.

We don't really need M&A to hit our plans and obviously they're built on improved tech, our products, our market position with with attractive returns, we will engage, but I think the real key for us is we're not overpaying. We've seen lots of our competitors overpay and that's not what we do. It has to make strategic sense for us and the businesses we acquire have to either be Stand alone or if they're coming into our world we can take them to another level. So that's always been how we've looked at it.

And you made a nice amount of cash on the balance sheet. So how we deploy that is discipline first and flexibility next. Organic growth has always been important to us with a clear eye on return on investment. And then you've noticed we will, we paid regular and special dividends, so and as Neal said, we'll only select bolt on opportunities that strengthen our core.

Great, very helpful and then just one quick follow-up. I'm wondering if you could share a little bit more on the strategy in Alberta, and how you're taking learnings from, the Ontario transition and applying them to sort of improve the performance here this time around.

Okay, so as we know, Alberta is now expected to regulate in Q2 2026. I mean I'll say this, we are ready, we've learned our lessons from Ontario of how to migrate the customers from our dotcom product to now Alberta. We've also obviously enhanced our West of Canada product and Ontario products, all those features will now come into Alberta. In Alberto product. I think we saw lots of heavy marketing activity early on in Ontario. I'm not sure that all the competitors can keep spending as they have been spending, so we think that will be a more rational competitive environment and as you know we've already got the revenue. So when we spend 1% of our mark on revenue, we already have that revenue. So we're waiting to see it as soon as all the rates come and we're ready to go. We go, we go for Alberta.

Very helpful, thank you very much.

Clark Lampen, BTIG.

Thank you. Good morning everyone. I wanted to follow-up on Bernie's question before around, Nigeria but maybe in sort of a broader context, if I think back to what you laid out for us in September, I think there were up to four markets that were targeted potentially for expansion. Are any of those encompassed in the plan for 2026 or embedded in guidance or, whether yes or no, maybe you could give us an update on which of them seem most addressable or I guess sort of most actionable near term. Thanks.

Yes, thank you for your question. The only, market in expansion into Africa that is included in the guidance is, Namibia at this point in time. We did call out one or two other markets as well in Investors Day like you've mentioned, but we also remain disciplined to have a strategic rollout plan and make sure that how we operate in Africa is 100% effective, and we also obtain that, operating leverage there.

And I'll just add to that is remember besides that one country we've, we're obviously rolling out our jackpot City brand as a pure play casino in more African markets and we've got a few of them coming on, coming online and then at the same time operationalize the existing products and teams that we've got in those regions.

Understood, and a very quick follow-up if I may, Neal, I think you called out a low single-digit benefit in Nigeria from the World Cup. Would it be possible to quantify how big the tournament could be for your sports business in 2026 from a handle standpoint.

Yeah, go ahead, sorry.

Yeah, okay, so now, what we said is genuinely in our budget, we've got low single-digit World Cup tailwinds across, I mean, just to put in perspective, 40% of the countries we operate in are participating in the World Cup. So the World Cup is obviously an expanded format. So what it can mean in the beginning part of the World Cup, you'll have really good teams against not such good teams.

I mean that we might have more favorites winning in this World Cup, but it's a longer tournament with a lot more games. So we believe the engagement, etc. Over time is going to be really good and obviously the World Cup is at that time and it is, we normally wouldn't have any sporting events. So it's really going to fill the calendar for us from a, from that perspective. Thank you very much.

[Mike Hickey, StoneX].

Hey Neal, Alinda, great job guys, a stellar '25. Just a few questions from us. First on apricot. I think when you were Sort of penciling out 35 million in EBITDA savings from the the deal and integration, is that still the number you're thinking about and 26 and how much have you baked into, your guidance now that you've completed or have the official approval to complete this deal?

Yes, thanks Mike.

During Investor Day we called out $35 million. This is not a day one saving. This is an annualized saving projection. And these savings will come from reduced royalty fees, infrastructure enhancements, and most importantly, bringing staff closer to Super Group. So we're starting to bring the team together and the savings definitely already started, but this is an annualized number that we called out, and we will update you on progress as we continue and execute according to our plans.

Alena, just to confirm that you've put the presumed savings now into your gut, correct?

That's correct. The savings that we will realize in 2026 is in the guide, correct.

Okay, awesome. The, I guess next on the, I guess just to stay on the guide, Melinda, did you also bake in, presumed savings on the Supercoin initiative as well, or is that something that you look to, just earn as you sort of continue to roll out the product, I guess the next big step would be the wallet.

Yeah, so, obviously the last launched in South Africa and obviously it's a step towards broader payments and engagement. It's near to, it's, it'll take us time. Obviously, you can't just switch the lights on and it just happens. It'll, it, the customers have to adapt it. So one is we have the customer base, two is we have the product that our African customers love, so we're going to start as soon as the wallet comes in in the. Half of this year, be able to incentivize to that, but it's already helping us save on other banking fees, from the different suppliers we use. So we're really seeing a benefit. So some of that is obviously, put into our guidance.

Okay, last question, on the World Cup, I think it's pretty obvious to see how strong of a catalyst that's going to be for you guys, on boarding, players here in the cross cell to i gaming is significant. I think you said 60+%, but just I guess reflecting on the Africa Cup and the, pressure on hold that you experienced at the beginning of, that event.

Given that the World Cup this year has expanded significantly, how do you sort of assess sort of early tournament, risk on, hold and what you would do to mitigate that if that's a factor that we should be thinking about.

Thank you.

Yeah, and yeah, so listen, I think it is better that there are more teams, right? Listen in all the past World Cups we've always found in the early rounds some of the favorites don't win either win or draw, sometimes don't even qualify for the next round. I am What we have done and will do is that we don't, we are all over our incentives and our boost that we give the customers in the tournament, especially in the early rounds. So this is all a mass of working out where where the volatility lies and as you can imagine from from from the Africa Cup of Nations, we, we've learned some clever lessons there also. What does happen is you saw what happened in December and then it all flowed through in January where the sports results went the other way so then you get nirvana, you get brilliant sports margin and you get your constant casino. So together that helps us and also we've got all the new AI pricing, new initiatives we are then embedding from from from from our traders etc. So we're all over this. And listen, the World Cup, I think is going to be a real catalyst for, it's all about the customer engagement. Remember, it's not about the customer just in the first week or two of the World Cup of his engagement, his or her engagement going forward and that's what our whole business is about. And then the cot analysis that Spencer kept on showing on our Investor Day is how the cake is layering, this just helps layering the cake even more.

And just to conclude, remember our sport is 20% of our business, 80% is casino. So we like to believe that the 80% casino being casino focused gives us the ability to navigate the ups and downs of sports.

Absolutely. Good luck, guys. Thank you.

Thanks.

Jed Kelly, Oppenheimer.

Great, and thanks for taking my question. Just looking into your guidance. He just talked about, some of the reps we should returning with aspect is directing, and you kind of get around all bird or cup, anything we should be contemplating on that. Thank you.

So, you're just breaking up. We've got some of it, not all of it. Do you want to just repeat that, sorry, we just, we heard every second word.

Yeah, could you just talk about some of the, risk in terms of potentially not, some of the risk you've got the guidance on why it could come in under your, under stations.

So, I think the risk around any guidance is usually the variance that the variance would cut both ways. So over time, hopefully like we've just mentioned, the sports results will normalize and we feel comfortable that that will even be the effect of our 2026 guide and we've already started to see that because January was exceptional, more than we've ever seen, but it's already normalized to our trailing 12 month average after the results in February. And we just have to make sure that we like to launch more of the jackpot city in different countries so we have that uplift in growth.

And then I think to answer some of the questions I got in the guide we've done a normalized sports sports margin. And maybe.

There's always that risk of sudden regulatory shifts like taxes, but that we have been navigating for the last 20 years, so we take a conservative approach around including that in the guide.

Great, thanks. And then if you can hear me all right, one, I'll take one more in. Any regions outside of Africa we should be watching that could potentially open up?

There, listen, I mean, obviously Brazil was last year or the year before. There's talk of UAE, etc. Coming, so again it's all about the numbers, it's all about what are the taxes, what you can do in those markets, what products, is it sports, is it. Casino, so from that perspective, that, that's probably only the other one, right. Most of the European countries, as are all regulated today and there are one or two African countries that are starting to regulate over time, so we're all over it.

Thank you and good luck.

Okay. Any more questions from anyone?

We have no further questions.

Well, that's, I'll okay, so again thank you everyone for joining today's call. We are really super proud of our performance in 2025 and the start of the new year and we'll speak to you again soon. Thank you.

This concludes today's call. Thank you all for joining. You may now disconnect your line.