Betsson AB has issued a preliminary alert regarding its first-quarter performance, indicating that it is experiencing margin pressures in its primary markets due to rising costs and taxes.
The Stockholm-based operator anticipates group revenues of €285 million ($334 million), representing a 3% decline from €294 million ($344 million) recorded in the same period last year. Earnings before interest and tax (EBIT) are expected to plummet by 47%, dropping to €34 million from €64 million. This downturn is attributed to a shift in revenue composition and heightened cost challenges, mainly due to increased tax burdens.
Performance varied by region, with growth in Latin America and Western Europe countered by decreases in Central and Eastern Europe, Central Asia (CEECA), and the Nordic countries. Revenue from Latin America surged to €93 million from €75 million, while Western Europe saw an increase to €61 million from €56 million. Conversely, CEECA revenue fell to €96 million from €122 million, and the Nordics dropped to €31 million from €38 million.
In terms of product segments, sportsbook revenue remained stable at €80 million, whereas casino revenue decreased by €8 million, totaling €204 million. The B2B division experienced a significant downturn, with revenue declining to €51 million from €90 million, reducing its share of total group income to 18%.
Following this announcement, Betsson's shares saw a sharp decline, plummeting from 104.8 SEK (£8.37) to 81.95 SEK within moments, before recovering slightly to 91.30 SEK, still reflecting a drop of over 13% for the day.
CEO Pontus Lindwall acknowledged the difficulties faced in the B2B sector, stating, “Our B2B business continues to be impacted by reduced revenue from one of our clients. However, since early December, this client has shown signs of stabilizing average activity levels.”
Despite the challenges, he expressed optimism regarding future growth, saying, “In the longer term, I am enthusiastic about increasing our B2B revenue with both existing and new partners, as we adhere to our strategy aimed at enhancing shareholder value over time.”
Lindwall also highlighted the robust performance of the company’s consumer-facing operations, noting, “Our B2C business is performing well overall, showing solid growth and making a significant contribution to operating income.”
However, he pointed out that ongoing investments in developing markets are impacting profitability. “We are investing in several B2C markets that have yet to become profitable, which is negatively affecting total EBIT by approximately €10-15 million quarterly,” he explained. “We believe these markets have the potential to turn profitable, but we are continuously monitoring and assessing their performance and outlook.”
For the full year 2025, Betsson reported an 8% increase in revenue to €1.197 billion, while earnings slightly decreased by 1% to €313.7 million, as higher taxes began to affect results from the fourth quarter.
Early indications from the second quarter suggest some improvement, with average daily revenue rising 9% year-on-year as of April 8, and sportsbook margins exceeding the average of the past eight quarters.
Betsson is set to release its complete interim report for the first quarter on April 24 and has not yet provided financial guidance for the full year 2026.