DigiPlus faces margin pressure as customer costs rise, S&P says

DIGIPLUS Interactive Corp.’s profit margins are expected to come under pressure over the next two years as higher spending to acquire and retain users offsets lower gaming taxes and cost savings, according to S&P Global Ratings.

In a disclosure on Monday, DigiPlus said S&P Global Ratings assigned the company a “B+” long-term issuer credit rating with a stable outlook.

S&P expects DigiPlus to maintain a 40%-50% share of the Philippine online gaming market over the next two years, but projected its earnings before interest, taxes, depreciation, and amortization (EBITDA) margin at 14.5%-16% in 2026 and 2027, down from an average of about 18% in 2024 and 2025.

The ratings agency said higher customer acquisition and retention costs are expected following the August 2025 regulatory order separating e-wallets from online gambling platforms and restrictions on advertising.

“Higher marketing costs could wipe out the effects of lower gaming taxes and cost-savings for DigiPlus,” it said.

DigiPlus’ market share fell to 41% in 2025 from 47% a year earlier amid increased competition from new entrants.

S&P said the company regained some market share following the e-wallet delinking, although monthly active users recovered only modestly in the first half of 2026 and may remain below pre-delinking levels over the next two years.

The ratings agency expects the Philippine online gaming market to consolidate as smaller operators exit the industry.

“We believe the market will consolidate, with incumbents like DigiPlus benefiting from the exit of the smaller operators with cost disadvantages, and limited branding and technical know-how,” it said.

S&P expects DigiPlus’ financial performance to weaken in 2026 before improving in 2027.

It projected revenue to fall to P70.25 billion this year from P84.17 billion in 2025 before rising to P82.05 billion in 2027.

EBITDA is likewise expected to decline to P10.23 billion in 2026 from P14.35 billion last year, then recover to P13.31 billion in 2027.

S&P said more than 90% of DigiPlus’ revenue and profits currently come from online gaming.

DigiPlus plans to expand into land-based gaming in the Philippines through the acquisition of International Entertainment Corp. (IEC), the Hong Kong-listed parent of a land-based casino in Manila. It also plans to launch online gambling platforms in Brazil and South Africa starting in 2026.

S&P estimates the new businesses could account for 10%-20% of DigiPlus’ revenue and EBITDA by 2027, although the expansion is also expected to moderately increase the company’s debt.

Despite the planned investments, S&P assessed DigiPlus’ liquidity as adequate.

“The stable rating outlook reflects our expectation that DigiPlus will resume growth in revenue and EBITDA by leveraging its strong market position and large user base over the next 12 months,” the ratings agency said.

At the local bourse on Monday, DigiPlus shares fell 6.41%, or 56 centavos, to P8.18 each. — Alexandria Grace C. Magno