Telematic Interactive – 2026 Q1 individual review

Better operations yield higher revenues

2026 Q1 Individual Results

• Telematic Interactive Bulgaria AD reported 3% operating revenue growth YoY for Q1 2026 reaching EUR 17.7mln. Casino revenues take the lion’s share of EUR 16.1mln or 90.8% of the total operational revenues after 14.2% increase. Sports-betting reached EUR 1.62mln, which marked a slight decrease of 2.4%. The account is 9.2% of the operational revenues. The increase in revenues is exceeding the expectations and was a pleasant surprise for the investors.
• The active clients increased by 4.5% to 97,571 per month and the average revenue per client increased 8.5% to EUR 61. These two factors are the main driving force behind the increased revenues in Q1. The increase in them is due to the improved web interface, the better mobile access, the additional games and the optimization with regards to bonuses and promotions. A 4.5% increase in customer base leading to 12.3% increase in revenues is a good sign that, with regards to operations, Telematic has found the right rhythm and we hope to continue seeing this in the future.
• Conversion rate drops 27% to 54% and the churn rate dropped as well, according to them to -2% from 12% this time last year. They define this as the ratio between the players who have left vs the active players in the month. In their case, the churn rate can be negative, but this specifically can refer to Net Revenue Churn rather than the user count. From these, we can assume that they had a very successful marketing campaign covering and attracting more new clients. However, the risk of a large portion of them leaving in the next quarters is high, which would increase churn rate and put pressure on the rise of revenues.
• OPEX increased less than sales – by 8.1% to EUR 14.6mln. The largest contributor is External expenses and Other expenses. While Other expenses added EUR 0.255mln to OPEX, they are almost entirely comprised of the gambling tax that they are required to pay, i.e. this account changes proportionately with the changes in revenues. In External expenses, the big changes come from Marketing (14% increase to EUR 3.6mln), Games suppliers (8.6% to EUR 3.1mln) and bank fees (9.3% increase EUR 1.5mln). As mentioned above, this also suggest a broader (or more novel in its approach) marketing campaign, which has managed to bring more new clients.
• As a breath of fresh air, profitability marked an increase for the first time in a while. EBIT margin increased to 17.6% (from 14.44% last year) for EUR 3.1mln. EBITDA margin increased to 18% (from 14.85% last year) for EUR 3.2mln. Net margin increased to 16.1% (from 13.1% last year) for EUR 2.9mln.
• • Current liabilities increased by nearly 200% to EUR 4.4mln because of the increase in Liabilities for Investments account, which is not disclosed further.
  • However, from Investments in subsidiaries, we can see that there was bigger spending on 7Mojos Interactive (a company producing gaming software for online betting 7MOJOS, where they acquired 51%) for EUR 3mln and the Peruvian subsidiary for EUR 0.47mln for a total of EUR 3.4mln.
  • The company distributed a dividend on 07.04.2025 in the amount of EUR 0.18 per share. This is the same amount as the first distributed dividend last year so we will see if the dividend policy is affected throughout 2026 considering their history of distributing dividends 4 times a year.

    

  Commentary:

  Telematic Interactive showed 2 positive changes in Q1 2026:

  • Improved operations
  • A slightly clearer language about operations in Peru and Kenya

  Improved operations, while definitely a positive sign, has to be taken with a pinch of salt. It is true that efficiency is fundamental to the long-term survival of the company. Even organizations operating at high margins can see themselves in trouble and fighting for survival should their operations do not yield the long-term efficiency that is needed. Telematic Interactive has been talking about the implementation of their new CRM system over the last few quarters, but this is the first time when we see a noticeably positive effect. It will be very interesting to see if this effect remains in the following quarters or if it was a result of a positive seasonality effect.

  The language about Peru and Kenya became clearer. Yet, there is a lot to be asked for. Considering that those markets are fundamental for the strategic growth of the company, it is sad to see just 2 short paragraphs outlining the work there. They consisted of outlining the investments in Peru (EUR 0.427mln increase in the capital of the local subsidiary in Q1 2026) and stating that the operations in Kenya are increasing successfully, where the profit allows for growth without further investments from the parent entity.

  Areas of concern:

  • Lack of transparency about operations in Peru and Kenya
  • Lack of clarity for taking and working towards strategic goals
  • Focus entirely on tactical targets
  • Lack of support for sports betting as an alternative business line

  From investors’ point of view, the problem with the operations in Peru and Kenya is that everybody knows that they exist, but nobody knows anything about those. It is not known how much revenues they make and what their efficiency is, as well as it is unclear what future investments might be needed. It is impossible to establish if Telematic has the capacity to capitalize on those investments and develop them further.

  While the rise in revenues in Q1 is a positive sign, it is clear that this is a tactical step, not a strategic one. As such, it has a ceiling and in all likelihood, revenues by YE 2026 are not going to exceed that rise of 12-13% (all other things considered equal). This is the reason why investors are anxious to learn about the plans and the works towards those plans in Peru and Kenya – they have the potential to be a game changer for the company.

  The lack of focus on sports betting has also been noted earlier. Telematic is focused on casino games and provides myriads of these, clearly being very successful at capturing clients and their attention. Sports betting, however, is a different type of gaming and requires a different type of talent to make it successful. Unless Telematic focuses on a separate dedicated structure (it can be within the company), which focuses entirely on the sports betting line (marketing, client retention, risk management, odds management, etc), it is likely to be heavily influenced by seasonal ups and downs depending on the sports events. A well-developed company mitigates this by covering various events across multitude of sports, thus eliminating those fluctuations.

  Telematic is in the position to have a very successful casino games business, which can be used as the cash generator for the investments in Peru and Kenya, as well as in sports betting, if they wish so. As of now, however, there are no clear signs for that and company management prefers to limit information to very basic statements. The fact that we cannot estimate with credible degree of certainty that there will be growth in these lines, puts the existing revenue levels capped, which affects the projected performance and the expected stock price. Should this change, projections will be automatically revised, but until then – it is a HOLD recommendation.

   

  Full report can be downloaded here.