Key Points
- Revenue dropped by a whopping 32% in the third quarter, while the company somehow managed to eke out a 40% increase in EBITDA, largely thanks to a culling of costs and the fact that last year was a complete disaster.
- The whole fiasco was triggered by a ₱4.52 billion fair value loss on some dodgy casino notes DigiPlus had invested in, basically a financial gamble that backfired.
- About a quarter of its ₱8.9 billion nine-month profit was a paper gain, essentially overvalued assets that artificially inflated the company’s bank balance.
DigiPlus got hit with a ₱947.6 million net loss for the third quarter, despite its EBITDA shooting up by a nifty 40% compared to the same time last year. Revenue plummeted by almost a third, but somehow the company still ended up with a healthy ₱8.9 billion in profit for the first nine months of 2026.
Of course, that’s down to a combination of DigiPlus’s investment in some highly volatile convertible notes issued by a Hong Kong-based company called International Entertainment Corp, and the fact that the company paid a whopping ₱12.2 billion for these notes. Any changes in their value have a direct impact on DigiPlus’s quarterly profits. And then there’s the small matter of the 40% EBITDA increase, but that’s against a backdrop of some pretty dismal results in 2025.
Those Casino Notes Wreaked Havoc on DigiPlus
The quarterly loss was largely due to a ₱4.52 billion fair value loss on DigiPlus’s convertible notes in International Entertainment Corp. As its half-year filing notes, these notes are treated as assets that are valued at fair market value, so their value can change from quarter to quarter, and any gains or losses get reflected in the company’s profit straight away.
This has all been a bit of a rollercoaster ride for DigiPlus. At the start of the year, they posted a ₱590 million gain in the first quarter, but that was dwarfed by a ₱6.16 billion gain in the second quarter. That second quarter valuation gain lifted reported profit to a massive ₱6.98 billion, a 124% jump.
But then in the third quarter, the value of the notes plummeted by ₱4.52 billion, effectively wiping out the second quarter gain. After it’s all said and done, DigiPlus still ended up with a net non-cash gain of ₱2.23 billion, that’s about 25% of its ₱8.9 billion nine-month profit.
Despite that gain though, nine-month profit was actually down by about 12% from ₱10.11 billion in the same period last year.
Revenue Freefalls as EBITDA Surges
DigiPlus raked in ₱12.9 billion in third-quarter revenue, but that was a 32% drop from ₱19.05 billion at the same time last year. Revenue for the first nine months took a hit as well, plummeting from ₱66.83 billion to ₱45.75 billion.
EBITDA, on the other hand, showed some promise, the company posted ₱2.9 billion in Q3 EBITDA, a 0.3% jump from the previous quarter. That worked out to a tidy 22% margin. And when you compare it with the third quarter of 2025, EBITDA is up by a respectable 40%, although that’s against a pretty dire backdrop.
For the first nine months, EBITDA came in at ₱8.33 billion, still 25% below the previous year’s figure.
Management reckons the improvement in margins was all down to cuts in advertising spending, lower direct gaming costs, and generally tightening their belts on operating expenses.
Users Are More But Revenues Still Decline
The number of players has grown in DigiPlus’s quarter as the average monthly active users have increased by 3% to 5.9 million, while bettors and depositors are up by 5%.
It did not influence revenues. They were down by 17% compared to the previous quarter’s ₱15.61 billion. The reason for that decrease is not provided by the company.
This trend was already observed in the second quarter as the gross gaming revenue was down by 9%, but the number of bettors increased by 26%.
For the comparison with 2025, it should be mentioned that in August of that year, the order of the central bank forced e-wallet providers to disable the in-app links to gaming sites.
Locally Developed Games Help Implement DigiPlus Strategy for Content
Additionally, DigiPlus invests in locally developed games. Thus, on 22 October, through cooperation with Regal Entertainment, five titles from the Shake, Rattle & Roll series were added to BingoPlus.
According to the localisation head of DigiPlus, he aims to expand the number of such games to reach 60 in 2027. Compared to more than 30 games expected this year, he noted “I don’t want you guys to hold me to 60”.
Casino Investment Exceeds Cash Reserves of DigiPlus
The company invested ₱12.2 billion in convertible notes through two transactions in March and June. Besides, the company paid ₱3.8 billion in dividends.
As of September, the company had ₱11.7 billion in cash, a 11% increase from June.
According to DigiPlus, its financial situation is able to provide opportunities for expanding to foreign markets, acquisitions, and developing technologies and products. Operating cash flow of the company faces some problems. The company earned ₱4.4 billion in operating cash flow in the first six months of 2026 compared to ₱8.8 billion in the same period of the previous year.
Valuation of notes in the half-year filing as of 30 June amounted to ₱19.3 billion. Despite the fair value loss in the third quarter, the investment is still higher than the purchase price.
The full conversion will result in 53.89% of shares in International Entertainment. No information on conversions is provided by the company yet.
GGRAsia also mentions the possibility of receiving lower fees and taxes. However, it is worth noting that access to a lower rate of PAGCOR is conditional on the meeting of the required conditions.
Brazil Ban and New Zealand Exit Stunt a Fresh Rewrite to DigiPlus Expansion Plans
Brazil was originally meant to be DigiPlus’s first route into international markets but their plans there have been upended more times than we can count.
GamePlus did manage a soft launch in September 2025 before the whole thing was put on ice just a few weeks later in October. BingoPlus, however, did get a second bite of the cherry by returning to the market back in July 2026, according to GGRAsia. DigiPlus had stopped operations to use that time to get on and sort out some products that might actually appeal to local players.
Brazil’s regulatory landscape shifted yet again when President Luiz Inácio Lula da Silva signed a bit of an emergency piece of legislation in early September. The law effectively blocked any new deposits from going in from that day. Players had until the 5th of October to get their cash back, while betting websites had been told to pull the plug from the 6th of October.
Brazil’s constitution has a clause in it that says that Congress has a 60-day window to make a decision on whether to back the law and they can even extend it by another 60 days if they need to.
Lula claimed that the move was all about addressing the harm that gambling can do to families. Responsible gambling group, the IBJR, has flagged that a full-on ban could just push players into the arms of unlicensed operators.
Then on the 28th of September, DigiPlus sort of said that they didn’t think the law was going to have that much of an impact on their overall financial or operational situation.
New Zealand was another chance for DigiPlus to get out into the wider world, but they decided not to play ball with the licensing process. A total of 32 companies threw their hats into the ring over the course of 10 rounds of bidding and the price hit around NZ$15 million per licence.
In the end, 11 of the bidders managed to get hold of one of the 15 available licence slots, but DigiPlus wasn’t even in the running. Winning a licence spot is one thing, but it’s not like you’ve actually got the green light yet, you still have to go through a pretty detailed assessment process.
A week or so after that, DigiPlus told the exchange that they had decided not to bother, saying that they had done a bit more analysis of the market and figured it just wasn’t worth the outlay.
ArenaPlus boss Erick Su had even admitted as much back in September, saying that their plan was probably a bit too ambitious for its own good. He described Brazil as a very tough nut to crack and said that he thought South Africa offered some pretty good potential.
Well South Africa is now a major part of their plans to expand overseas. DigiPlus did manage to scoop up 3 licences there back in April and is now planning to launch sometime in 2027.
Expert Analysis: Who Can You Trust Between the DigiPlus Figures?
Between the ₱2.85 billion EBITDA and ₱8.9 billion profit, we would find it more believable that the profit was around ₱6.6 billion after removing the ₱2.23 billion non-cash gain. Even that is still significantly lower than the previous year when the profit was ₱10.11 billion.
It should be noted that 40% EBITDA growth should not be considered a positive achievement for now. The comparison was conducted against a bad quarter from 2025, but at the same time, the revenue continued to decline. The reduction in costs has saved margins but still doesn’t mean that DigiPlus has resumed growing.
Another factor that should be taken into account is the lower promotional expenses and the possibility that they might be the cause of the situation where the number of players has grown but the revenue didn’t increase. The management hasn’t commented on this and it is important in order to evaluate the performance.
In August, Ping Chen expressed his expectations of “significantly higher gross gaming revenue and net gaming revenue” in the following quarters. Of course, one quarter is not enough to form a long-term trend, but two consecutive quarters with growth in user numbers and falling revenue should definitely attract attention.
According to Moody’s, DigiPlus will be able to produce ₱11.4 billion in EBITDA in 2026. So far, the company has already produced ₱8.33 billion in the first nine months. Thus, if the fourth quarter is similar to the third one, then the annual result will reach ₱11.2 billion.
For us, leaving the New Zealand auction shows financial prudence. The cost of a license there is NZ$15 million, which leaves little room for entry.
The proponents of DigiPlus can rely on cost control as the key argument. This assumption is supported by a 22% EBITDA margin.
However, our main concern is the ₱12.2 billion investment in casino notes while the operating cash flow decreased twice in the first half-year. It is difficult for such a company that has been dealing mostly with mobile gambling to start operating in land-based casinos. Eventually, DigiPlus can gain control of International Entertainment, but this is still only an option.
Thus, the figures for the fourth quarter will help determine whether DigiPlus’s 5.9 million monthly active users spend more money or just log in more often.
Explore more:
Share
6 views
