* Q1 adj. EBITDA in line with FactSet consensus * Expect limited consensus estimate revisions * Value of deposits stable around EUR 200m
Q1 outcome
Gentoo reported Q1 sales of EUR 24.0m, corresponding to a 5% y-o-y decline, in line with both ABGSCe and Factset consensus. Moreover, adj. EBITDA of EUR 10.5m was 6% below ABGSCe but in line with consensus. The sports margin was soft during February, in line with commentary from both Better Collective and various operators. That said, player deposit volumes continue to be stable around EUR 200m, suggesting that the underlying trend is stable despite quarterly fluctuations in the sports margin.
No changes to guidance
The Q1 report was unsurprising, and Gentoo has therefore maintained its guidance ('26e revenue of EUR 105-115m, adj. EBITDA of EUR 49-54m and operating cash flow of EUR 37-41m). Operating cash flow was roughly EUR 7m, up approx. 60% y-o-y, de-risking the cash flow guidance a bit. This is encouraging to see given Gentoo's leverage ratio of close to 2.7x LTM EBITDA (down 0.2x sequentially).
Mechanical estimate revisions flat
The Gentoo share is down 4% YTD, compared to OMXSGI, which is up 6% YTD. Based on our unrevised estimates, Gentoo is trading at 3.4x '26e EV/EBITDA. Following the report, which was in line with consensus' expectations, we anticipate consensus to maintain its revenue and EBITDA estimates.