Super Group (SGHC) Limited 2026 Q2 Earnings Call

Good morning, everyone, and thank you for joining us today to discuss Super Group's results for the second quarter 2026. During this call, Super Group may make comments of a forward-looking nature that are subject to risks, uncertainties, and other factors discussed further in its SEC filings, which could cause actual results to differ materially from historical results or from our forecast. We assume no responsibility to update forward-looking statements other than as required by law. On today's call, we may refer to certain non-GAAP financial measures. These measures are in addition to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. Reconciliations to the most comparable GAAP measures are included in the press release issued yesterday and available on the investor relations page of our website.

Today, I am joined by Neal Menashe, Chief Executive Officer, and Alinda van Wyk, Chief Financial Officer. After our prepared remarks, we will open the call up for questions. Now I would like to turn the call over to Neal.

Thank you, Inc., and good morning, everyone. I am pleased to report that the second quarter 2026 marked another exceptional period for Super Group, surpassing the record set in the first quarter. Revenue, adjusted EBITDA, deposits, and wagering activity all reached new highs, supported by strong underlying momentum across the business and increased engagement during the FIFA World Cup. As announced yesterday, we are super excited about our landmark partnership with Manchester United, making Betway the club's principal partner and exclusive global betting partner for the upcoming English Premier League season starting later this month. This partnership will further enhance Betway's profile across United's massive worldwide fan base. Man U's status as arguably Africa's most popular football club strongly aligns with our long-term brand and growth objectives. The World Cup drove exceptional customer acquisition and solid cross-sell across the business.

New customer acquisition increased more than threefold compared with the prior World Cup period. During the tournament, customers placed over $166 million football bets. Approximately 60% of those bets, or $100 million, were on World Cup matches. Our sports margin hit a record 17% for the quarter, reflecting improved pricing and risk management, the continued growth of parlays, and most importantly, the quality and durability of our customer base. Our focus remains on acquiring and retaining customers who generate sustainable long-term value. Our super persistent annuity revenue model is intended to sustain customer cohorts that generate predictable revenues and profits. This disciplined approach is intended to ensure robust long-term returns that are coupled with healthy and sustainable unit economics. We see this working particularly well in Africa, which delivered another outstanding quarter.

Revenue grew 36% year-over-year, while adjusted EBITDA increased 47% to $133 million, driven by broad-based growth across the region. Sports and casino wagers were up 5% and 28% respectively year-over-year. Looking ahead, we continue to see attractive opportunities to expand our footprint and remain on track for the expected launch of Namibia in Q4. We also remain focused on increasing the utility of our ZAR Supercoin. We are expanding wallet functionality, broadening exchange access, and advancing the phased rollout strategy while building the foundation for broader adoption and remittance across key African markets. International grew 7% year-over-year. Ex the U.S., it was 12%, while adjusted EBITDA held steady at $84 million, with strong underlying growth offset by the U.K. tax and short-term cost of strategic generosity campaigns that we expect will deliver ongoing benefits in due course.

In Europe, revenue grew 22%, led by a 34% increase in the U.K., which delivered record revenue in May. Ireland was up 18% year-over-year. We expect to launch slots in Germany this month, bringing our full product suite to the market. North America, excluding the U.S., grew 9%. Canada ex Ontario delivered 11% revenue growth, supported by strong retention and continued product enhancements. In Alberta, revenue was up 8% year-over-year, ahead of the province's regulated market launch on July 13th. We are approaching the rollout in a disciplined and phased manner to support sustainable long-term growth. Rest of World revenue increased 6%, led by strong performance in New Zealand, which grew 14% year-over-year despite reduced marketing spend. We are preparing for local licensing and positioning the business for a seamless transition to a regulated market. With that, I'll turn the call over to Alinda.

Thank you, Neal. Quarter two 2026 delivered a record total revenue of $684 million, up 18% year-over-year, while adjusted EBITDA grew 30% to $204 million. Adjusted EBITDA margins expanded to 30%, compared with 27% in the prior year period. Average monthly active customers reached 6.2 million, up 13% year-over-year. Total wagering increased 8% for sports and 15% for casino. Free cash flow conversion reached 68% in the first half of the year. We closed the quarter with $548 million in cash, up 39% year-over-year, even after returning $25 million to shareholders this past quarter and $218 million over the last 12 months. Disciplined cost management, the enduring strength of our casino business, a boost in sports performance driven by the World Cup, enhanced pricing, and our commitment to high return markets are all reflected in these results.

Supportive of our efficient approach to capital allocation, our balance sheet remains as robust as ever. As a result of our strong first half of performance and a solid start to the third quarter, we are pleased to raise our full year 2026 guidance. We now expect total revenue to be more than $2.6 billion and adjusted EBITDA to be greater than $710 million. I will now hand back to Neal for closing remarks.

Thank you, Alinda. Over the first half of 2026, we have once again demonstrated the strength of our brand, business model, and customer base. We are driving growth through disciplined execution and operational excellence. Given our exceptional performance and the strength of our balance sheet, capital allocation is very much front of mind for both management and the board. While we remain committed to maintaining a strong balance sheet, we recognize that we have excess cash. As shareholders ourselves, our interests are closely aligned with yours, we're actively evaluating the most effective ways to deploy our capital to maximize long-term shareholder value. With steady momentum, a highly engaged customer base, our new Man United partnership kicking off the football season, multiple growth drivers at play, we believe Super Group is well-positioned for the remainder of 2026. Operator, please can you open the call up for questions?

Thanks. Okay. Sure. Hi, Jed.

No problem. The headline number for MAUs is down, but it's not a concern for us. There are a number of reasons. The World Cup was great for acquisition, and we saw super engagement from those customers. You must bear in mind it was only two weeks of the quarter, and three weeks before that, there was no soccer at all. What we're seeing is very normal seasonality for the quarter as a whole. The quarter, we also had some tax effects to deal with in two smaller African markets. This had an impact on customer counts at the lower value end, but revenue still grew sequentially. Focus Markets mix grew sequentially, we're very happy with that.