CITI’S TAKE
Updating estimates following mixed 2Q26 results, with net revenue broadly in line and adj. EBITDA slightly below consensus, but a larger miss on Operating EBITDA due to higher adjustments both related to recent transactions and rebranding. PrizePicks’ growth remained soft (+3% cFX) despite +35% handle growth, while the US margins declined due to marketing investment around the World Cup. Management flagged softer PrizePicks comps in 2H26 and 18%YoY user growth at 2Q26-end. FY26 Group guidance (topline, Adj. EBITDA) was reiterated, with overall trading in line with mgmt. expectations. We, however, now model higher operating EBITDA adjustments (~€315mn vs. high-€200mn initial guidance). We reduce our 2026-27E operating EBITDA/Net Income estimates by ~3%/2%, mainly reflecting higher adjustments, Continental Europe and Betano 2Q26 margin miss vs. our estimates. Our TP moves to EUR13.3 from EUR13.6. Shares trade on 8.4x 2027E Adj. EBITDA/9.4x Op.EBITDA, on top of the peer group (Fig 3). Neutral maintained.
PrizePicks 2H outlook — Management attributed PrizePicks’ softer 2Q26 profitability to its strategic decision to capitalise on the World Cup through increased customer-acquisition investment. This supported record 2Q new-player acquisition, with June paying monthly active users up 18% YoY ahead of the seasonally important NFL, NHL and NBA periods. Awllyn expects PrizePicks to benefit from easier sports-outcome comparatives in 2H26, while 1H25 base included unusually operator-friendly outcomes, which inflated prior-year revenue, whereas outcomes in 2H25 were described as more normal. However, management expects marketing investment to continue in 2H26 amid heightened competition and did not provide specific growth or margin guidance.
Betano 2H outlook — After Betano’s revenue and EBITDA increased 26% and 24%, respectively, in 2Q26 management highlighted continued strength in Brazil and across Betano’s internationally diversified portfolio, but did not disclose specific geographic growth rates. At the bottom line, the 2Q25 comparison benefited from unusually favourable phasing of below-EBITDA items, primarily tax, which contributed to Allwyn’s share of net income declining by 3% in 2Q26 despite strong EBITDA growth. Management expects EBITDA-to-net-income conversion in subsequent quarters to be similar to, but slightly above, the normalised 2Q26 level.
