Betsson reported record revenue in the third quarter of 2026, bringing in €326.5 million, up 10% from €295.8 million a year prior. However, the company's profits took a significant hit, falling sharply from the previous year. Chief Executive Pontus Lindwall spoke with iGB about the factors impacting profit margins and expressed optimism about future earnings growth.
The company's EBIT declined by 31%, reaching €46.1 million, while its margin decreased from 22.6% to 14.1%. EBITDA also fell, by 23%, to €63.4 million. Net income fell to €28.2 million, down from €50.1 million, resulting in an earnings per share of €0.19 compared to €0.34 the previous year. Additionally, operating cash flow decreased from €64.8 million to €54.5 million.
Lindwall encouraged investors to consider the sequential improvements, noting a 9% increase in EBIT from Q2, marking the second consecutive quarterly rise. “Maybe the most important thing for an investor is that we increased EBIT sequentially,” he stated, emphasizing the importance of this upward trend.
Despite this positive sequential movement, Lindwall refrained from predicting when year-on-year profit growth might return, stating, “It’s hard to tell when we will see profit growth compared with the same quarter last year. I don’t know that yet, but we are certainly moving in the right direction.”
Shifts in market composition are influencing margins, with gross profit dipping by €9 million to €181 million, leading to a decrease in gross margin from 64% to 56%. Revenue from regulated markets surged by 35%, accounting for 78% of total revenue, compared to 64% last year, contributing an additional €28 million in gaming taxes.
When asked about the impact of a growing presence in Latin America, which accounts for 36% of revenue and saw a remarkable 52% growth, Lindwall confirmed the region has a different cost and tax structure than Betsson's previous markets. “Yes. We are now growing a lot in Latin America, in a couple of regulated B2C markets,” he explained.
Active customers from this region increased by 40%, reaching nearly 1.9 million. Lindwall noted that events like the World Cup generally boost user engagement, stating, “It lifts volumes a bit, but even more so it lifts the number of active users…I hope we can manage to keep some, or most, of those customers going forward.”
In Western Europe, Betsson experienced a 14% increase, particularly strong in Italy, while revenue from the Rest of World more than doubled due to the growth of Rhino’s business in Canada. Conversely, Central & Eastern Europe and Central Asia saw a decline of 17%, and the Nordics experienced a 10% drop in revenue.
Casino revenue generated an all-time high, rising 14% and now constitutes 77% of total revenue. However, sportsbook revenue only grew by 1% to €72 million, with the sportsbook margin decreasing slightly to 8.1% from 8.8%.
B2B revenue significantly dropped by 39% or €30 million due to decreased income from one client, whereas B2C expanded by 28%, with B2B now representing just 14% of overall revenue, showing a slight drop from Q2. Lindwall expressed a wish for stronger B2B growth and mentioned that the decline from their largest customer has stabilized.
Regarding regulatory challenges, he criticized proposed tax models in Latin America, asserting that they could hinder business viability. “Regulators don’t really understand the business…any kind of tax on turnover doesn’t really work for this industry,” he remarked.
Betsson's conservative investment approach in Brazil helped mitigate the impact from the country's recent near-ban on online gaming, which Lindwall termed “a shocking decision,” expressing confidence in a future regulatory reversal, noting that no country has successfully shut down internet gaming permanently.
With net cash dropping to €98.3 million from €220.0 million due to a €59 million expenditure on Rhino, Lindwall is open to pursuing substantial market opportunities, stating, “We could do a sizeable deal…and given the structure of our balance sheet, we wouldn’t be afraid to take on some more debt to do a bigger acquisition.”
Lindwall is also optimistic about the potential for prediction markets, although regulatory limitations currently prevent their implementation in most of Betsson's markets. He asserted, “Yes, I would definitely press that button” to create a regulated framework in Europe.
As for Q4, preliminary data shows that from the start of October until the 18th, average daily revenue is 11% higher than the daily average recorded in Q4 2025, despite subpar sportsbook margins. Overall nine-month revenue has reached €922.1 million, a 3% increase, but EBIT has decreased by 39% to €122.3 million.
