Gentoo Media-Soft topline offset by material profitability uplift-05/26/2026

Research evidence excerpt

Gentoo Media-Soft topline offset by material profitability uplift-05/26/2026

Gentoo Media

CREDIT NEWSFLASH | 26 MAY 2026

Soft topline offset by material profitability uplift

Gentoo reported a soft Q1 topline with revenues declining 5% y/y (-11% vs PASe) due to weaker sports win margins, although

underlying operational momentum remained resilient with player deposits of EUR >200m (+10% y/y). At the same time, we

did see the expected margin improvement of ~9pp y/y to 44% on the back of delivered cost savings, resulting in adj. EBITDA

increasing 19% to EUR 10.5m. This uplift was below our expectations of 12m due to weaker topline, although we see

improved run-rate earnings profile, primarily supported by a lower cost base and seasonally stronger quarters ahead, as

well as the FIFA World Cup coming up. On a run rate basis, we estimate adj. EBITDA of EUR ~45m, translating into levered

FCF of ~20m and ~18% yield to gross debt, supporting deleveraging of ~0.5x per year from current 3.2x. Previously, cash

flow has been burdened by earnout payments, we now note that only EUR 2.6m remain, supporting liquidity build up. In our

view, the combination of structurally improved profitability, stronger cash conversion and demonstrated shareholder

support will support refinancing ahead of the December 2026 bond maturity.

• Gentoo reported soft Q1 revenues of EUR 24m, down 5% y/y and below our estimates of EUR 27m, primarily reflecting weaker sports win

margins during February, although with continued solid underlying player activity. Noting that Q1 is typically seasonally weaker and,

combined with smaller incremental contributions from FIFA World Cup this summer, we see support for stronger topline development

throughout the remainder of 2026.