Yesterday, FMG announced that it expects quarterly revenues and EBITDA to be negatively impacted by SEK5m from Q1 2025 onwards due to reduced commissions in the Brazilian market. Our understanding is that operators are adjusting their affiliation agreements to mitigate gaming taxes and other compliance burdens associated with the new regulation that went live on 1 January 2025. Since FMG has, to our knowledge, never disclosed any market split, yesterday’s news also provides more insight into the company’s exposure, with Brazil evidently being one of its largest markets.

Even though the reduced commission is, of course, negative, it is arguable that Brazil could remain an attractive market in 2025 and beyond for affiliates, as operators are eager to capture market share and, therefore, increase their user acquisition investments. That said, yesterday’s news comes after a negative forecast adjustment in December, and we understand that sentiment around the share is currently negative.

Although FMG states in the press release that the company has seen strong growth in other regions, which is expected to mitigate some of the negative impacts from the Brazilian market, we are not currently adjusting our underlying growth assumptions for 2025e-2026e. Instead, we are reducing 2025e sales and EBITDA by cSEK20m while maintaining our 2026e growth assumption of 15%. We have lowered our base case from SEK11 to SEK9, and our fair value range from SEK5–18 to SEK4–16. FMG is scheduled to report its Q4 results on 20 February.