1Q26: A slight beat on topline/EBITDA, guidance maintained, buyback announced
CITI’S TAKE
Decent 1Q26 results with c.2% beat on topline & adj. EBITDA, healthy Continental Europe growth (+5%YoY) and acceleration in Betano revenues to +27%YoY vs. +7% in 2H25. FY26 guidance confirmed, in addition, Allwyn announced a EUR150mn buyback programme (c.1.5% of market cap). The only negative was soft performance of recently acquired PrizePicks on a pro-forma basis (-1%YoY, +5%cFX). Overall, we see results as marginally positive, as based on our conversations with investors, the market could have braced for softer set of results.
Organic growth +3.5%YoY — Net revenues +21%YoY in 1Q26, 1.6% above our estimate. Excluding EUR178mn contribution from PrizePicks, acquired in Jan 2026, organic growth was +3.5%YoY, ahead of +2% on our expectations. The beat vs. our estimates was mainly driven by Continental Europe that was +5%YoY (+7% excluding headwinds from higher tax in Austria), however the UK and NA revenues came in c.3% below. No material progress in the UK so far in 1Q26 with revenues +3%YoY (+7%cFX), while EBITDA decreased by EUR5mn YoY. In the US, PrizePicks pro-forma performance was soft with net revenues -1% YoY (+5%cFX), affected by customer friendly outcomes in March. At the same time, Betano (equity method investee) reported strong growth acceleration to +27%YoY (+31%cFX) from +7% growth in 2H25 with net income +43%YoY.
Adj. EBITDA margin at c.37% — Adj. EBITDA came in c.2% ahead of our estimate, with margin broadly in line at 36.8%, trending in line with the annual guidance of 37%. Operating EBITDA was only 1% above our estimates, the adjustments doubled YoY to EUR107mn. NetDetb/adj. EBITDA leverage increased to 3.2x in 1Q26 from 2.7x in 4Q25 as expected.
FY26 guidance maintained, buyback announced — Allwyn confirmed its FY26 guidance: Net Revenue growth of mid-to-high 20%s (before one-off impacts equivalent to c.€60mn) and an Adjusted EBITDA margin of 37%. Allwyn announced a share buyback programme of up to €150mn (c.1.5% of market cap) and confirmed EUR0.2 DPS to be paid in 2H26. Implications — Overall, we see results as marginally positive, as based on our conversations with investors, the market could have braced for softer set of results.
Valuation
We value Allwyn on 2027e SOTP applying 9x EV/Adj. EBITDA to PrizePicks, 10x to Betano, 7.5x to other segments. Our EUR13.1 TP implies c.8x Adj. EBITDA/9x Op.EBITDA in 2027e.
Risks
Key risks to our target price include:
Upside risks: Rerating of key peers; value-accretive acquisitions; favorable terms of exclusive licences; operator-friendly sports betting results;stronger economic growth. Downside risks: Regulatory risks; Risks of potential loss of licences or exclusive rights; Higher taxation; Higher Competition (prediction markets, OSB platforms, DFS platforms in the US), macro risks in key markets (EU, UK, US), customer-friendly sports betting results, further minority shareholder dilution due to scrip dividend option or shares issuance related to potential M&As.
