Strong Group EBITDA Performance
Entain reported ex-U.S. EBITDA up 8% year-on-year to GBP 1.16 billion and total group EBITDA (including 50% of BetMGM) up 28% year-on-year to GBP 1.244 billion, driven by organic growth and efficiency improvements.
Entain plc
· GMVHF
March 5th, 2026
Summary
- Earnings Call Date:
- 2026-03-05
- Change Since:
- -6.30%
Earnings Call Sentiment
PositiveThe call presented a strong operational and financial performance in 2025 with broad-based organic growth, a clear BetMGM profitability inflection, meaningful margin and cash flow improvement, and a credible multi-year plan (including cost/AI initiatives) targeting at least GBP 500m adjusted cash flow by 2028. The principal near-term headwind is the sharp U.K. tax increase and related regulatory/black-market risks, which depress margins in 2026 and delay a year of deleveraging; management has detailed mitigation workstreams and expects to offset over 50% of the U.K. tax impact from 2027. Overall, the positive operational momentum, strong BetMGM contribution and improved cash generation outweigh the significant but manageable regulatory headwinds.
Company Guidance
Management guided 2026 online NGR growth of 5–7% (constant currency) with an online EBITDA margin of 23–24% (reflecting mitigation of ~25% of the U.K. gaming tax impact in 2026 and management’s upgraded expectation to mitigate >50% from 2027), which implies a small YoY decline in Entain EBITDA but total group EBITDA (including BetMGM) broadly stable year‑on‑year; BetMGM is on track for ~$500m adjusted EBITDA in 2027 (it returned $270m to parents in 2025), Entain targets at least GBP 500m of annual adjusted cash flow from 2028 (adjusted cash flow was GBP 151m in 2025), look‑through leverage was 3.6x at year‑end (reported 3.1x; net debt GBP 3.6bn; available cash >GBP 900m), the new blended ETR guidance is 30% (including the U.S.) with a deferred tax asset recognition expected in 2026 to boost EPS, and marketing is phased for 2026 with ~55% of spend in H1 for the World Cup.
Robust Online Volume and Revenue Momentum
Online volumes rose 7% year-on-year in 2025 (9% in Q4) with seven consecutive quarters of online revenue growth; online NGR ex-U.S. was GBP 3.9 billion, up 6% year-on-year (would have been ~7% excluding adverse sports results).
Significant BetMGM Inflection
BetMGM delivered 33% revenue growth and EBITDA up over $460 million year-on-year, moved into profitability, and returned $270 million of cash to parents in 2025; management expects ~ $500 million adjusted EBITDA for BetMGM in 2027.
Material EPS and Cash Flow Improvement
EPS more than doubled to 62p and adjusted cash flow improved from an outflow in 2024 to an inflow of GBP 151 million in 2025, comfortably ahead of guidance (initial guidance had moved from neutral to GBP 75 million).
Revenue Growth and Diversified Portfolio
Total revenue (including 50% of BetMGM) grew c.8% to GBP 6.4 billion. Growth was broad-based with the U.K. up 15% online and double‑digit volume growth in markets such as Spain, Canada, Greece, Georgia and New Zealand.
Improved Leverage and Strong Liquidity
Look-through leverage improved to 3.6x (down from 4.3x prior year); reported leverage was 3.1x. Available cash remained strong at over GBP 900 million and the debt maturity profile is healthy (next significant maturity ~20% not until 2028).
Operational Efficiency Gains
Project Romer delivered over GBP 100 million of annual savings; online gross profit margin rose ~1.0 percentage point excluding Brazil tax headwinds (c.1.8 p.p. underlying margin improvement after adjustments were highlighted).
Progress on Customer Metrics and Product Improvements
Net revenue retention held >90% throughout 2025 (above 85% benchmark) and customer acquisition remained >15%, supported by product/UX upgrades (e.g., app rebuilds in Poland) and AI-driven product pilots rolled out across markets.
Dividend Increase and Capital Discipline
Final dividend declared at 9.8p per share, up 5% year-on-year, complementing the company’s focus on disciplined capital allocation and an explicit target to deliver at least GBP 500 million annual adjusted cash flow by 2028.
Clear 2026 Guidance and Longer-Term Targets
Management guided 2026 online NGR growth of 5–7% and online EBITDA margin of 23–24% (noting a small year-on-year Entain EBITDA decline before U.S. parent fee), and reiterated pathway to EBITDA/margin expansion and GBP 500m adjusted cash flow by 2028.
Stella David
Good morning, everybody, and welcome to Entain's 2025 Results Presentation. I'm delighted to be here to present a strong set of results. I'm joined this morning on stage by Rob Wood, our CFO and Deputy CFO. And I also have members -- by the way, can you hear me? Good, good. Okay. Always helps in a presentation to be heard, I think. Anyway, I'm also joined by the IR team here in the audience.
We also have senior members of the executive team in the audience as well. And we have our new CFO designate, Michael Snape, who's in the front row as well. So welcome to everybody. And now on to the agenda. I'm going to start with the headlines and some of the highlights of our strong progress. After that, Rob will then take you through the financials and provide you with the guidelines for 2026. And then it's going to be back to me to discuss our strategic delivery, how our priorities are evolving to further accelerate our performance and why we have confidence in our pathway to earnings growth, margin expansion and cash generation, including our conviction that we are going to hit at least GBP 500 million of annual adjusted cash flow from 2028. And then finally, I will briefly wrap up before we open everything to your questions.
But before I actually do move on to 2025 financial performance, this is the first time that I have spoken publicly since the U.K. budget back in November. The U.K. government's decision to dramatically increase taxes on the gambling sector was extremely disappointing. It opens the door to the illegal black market who pay no tax, do not have a license and off...
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