• Q2e: significant decline y-o-y, but small improvements from Q1
• No estimate revisions on limited news flow
• Trading well below peers on 5x '25e EV/EBITDA

Soft Q2, but heading in the right direction

We forecast Q2 sales of EUR 27.8m, down 8% y-o-y, but up 12% q-o-q. Headwinds from Brazil should remain, but we expect activity to pick up somewhat q-o-q following the slow start, and we believe Q1 in total could have been temporarily soft with the revenue decline exceeding the drop in value of deposits by some margin, and FTD's were more stable as well q-o-q. Also, we believe the sportsbook margin could be strong in Q2, e.g., judging by Kambi's and Betsson's Q2 reports, but we note that Casino should be the main revenue contributor for G2M. While the top line remains in significant decline y-o-y, we look for a q-o-q improvement of 3pp, and forecast continued improvements towards the end of the year. We model a 39.5% margin for Q2, which is 650bp above Q1'25 on the revenue increase with operating leverage, and supported by recent cost initiatives. Note, however, that we expect the full savings run-rate to support from H2.

Estimates remain intact

With limited news flow recently, we keep our estimates intact. Our estimates suggest a gradual improvement throughout the year following the slow start, coming up towards flattish top-line growth in Q4, with positive adj. EBITDA growth in Q3 supported by the recent savings initiatives. Management showed strong early Q2 FTD's in Paid, with good momentum, acting as one support towards improvements.

5x '25e EV/EBITDA, and ~20% '25e FCF yield ex. M&A

Gentoo is trading at 5x '25e EV/EBITDA, well below Betco and Gambling.com (~40%), which are trading at 8x FactSet consensus '25 EV/EBITDA on average, and Gentoo is trading ~40% below the Betco and Gambling.com average, at 9x '25e P/E versus 16x. Furthermore, we highlight Gentoo's lease adj. FCF yield ex. M&A of 21% in '25e.