Catena Media has recently unveiled its financial performance for the second quarter of 2024. The report highlights a notable decline in revenue and adjusted EBITDA, accompanied by a significant reduction in overall losses compared to the previous year.
Revenue and Profitability
For Q2 2024, Catena Media reported total revenue of €12.8 million ($14.1 million), marking a 14% year-on-year decrease. This decline is coupled with a sharp drop in adjusted EBITDA, which fell by 67% from €2.1 million last year to €0.7 million this quarter. Despite these challenges, the loss before tax showed a modest improvement, dropping to $2.5 million from $2.8 million in Q2 2023. Notably, the overall loss from the period saw a significant recovery, decreasing from $18.2 million in Q2 2023 to $2.7 million this quarter.
North America Performance
In North America, Catena Media’s total revenue reached €11.2 million, reflecting an 11% decline year-on-year. This reduction is mirrored by a decrease in new depositing customers (NDCs), which fell by 11% to 29,824. Adjusted EBITDA in this segment decreased by 24% to €4 million, although this decline was less severe than the overall business performance.
The revenue breakdown for North America reveals that €9.1 million came from the casino segment, which saw a positive growth of 13% year-on-year. Conversely, the sports segment experienced a dramatic 53% decline, with revenue dropping from €4.5 million last year to €2.1 million this quarter.
Rest of the World
The remaining €1.6 million in revenue came from international sources outside North America, representing a 33% year-on-year decline. NDCs in this segment fell sharply by 62% to 1,651. Despite these challenges, adjusted EBITDA improved to €0.8 million, up from €0.3 million in the previous year.
Both casino and sports segments in the Rest of the World experienced revenue declines. The casino segment saw a 44% drop, falling to €0.9 million, while the sports segment experienced a more modest decline of 6%, totaling €0.6 million.
Sports Segment
The sports segment, which generated €2.8 million in total revenue (29% of Catena Media’s overall revenue), experienced a 47% decline year-on-year. This downturn is particularly pronounced in the US market, where the sports segment saw a 53% revenue decrease. The number of NDCs in the sports segment also fell by 46% to 9,011. Adjusted EBITDA for this segment worsened from a €2.7 million loss to €3.2 million.
Casino Segment
In contrast, the casino segment reported a 3% increase in revenue, reaching €10 million. The number of NDCs in this vertical declined by just 3% to 22,464, demonstrating a smaller reduction compared to other areas. Adjusted EBITDA for the casino segment fell by 18%, totaling €3.9 million.
Strategic Restructuring and Leadership Changes
As part of its ongoing efforts to address financial challenges, Catena Media has undertaken a significant restructuring of its leadership team. The company has appointed several new executives to drive its turnaround strategy:
Edward Midolo was appointed as Chief Technology Officer (CTO) effective April 1, 2024.
Michael Gerrow took on the role of Chief Financial Officer (CFO) starting April 15, 2024.
Manuel Stan was appointed as Chief Executive Officer (CEO) in March, with his tenure beginning in Q3 2024.
In a statement, Manuel Stan emphasized the transformative nature of the leadership changes: “It’s very important to note that it’s not just me being new at Catena – pretty much the entire management team will be new by the end of the year. Since the beginning of Q2, we’ve had a new CFO, a new COO, a new CTO, and myself, so that’s four brand new people in the team and the team is absolutely fantastic.”
Stan continued, “We have a combination of new blood with people who have been here for a while, people who have grown with the company, and people who have proved themselves. Everybody is highly motivated and keen to take this challenge… We’re in this together and as a management team, we’re highly motivated to turn this around.”
Outlook and Strategic Focus
Reflecting on the Q2 results, Stan commented: “Our Q2 results were in line with the earnings update issued in June. They reflected the changes in search engine policies that impacted some media partnerships for affiliates, including Catena Media. While the changes had an immediate negative effect, we saw a positive impact over our owned and operated products later in the quarter.”
Stan expressed optimism about the company’s future prospects, particularly in the casino segment: “I am excited by the challenges ahead and optimistic about the future as we maximize our products’ potential, particularly in the casino segment where we see strong opportunities for growth. I believe Catena Media is well positioned to become a leading partner for the iGaming industry in North America.”
Catena Media’s Q2 2024 financial results underscore a challenging period marked by revenue declines and significant adjustments in adjusted EBITDA. The company’s strategic focus on restructuring and leadership changes aims to navigate these difficulties and capitalize on opportunities for growth, particularly in the casino sector. As the new management team takes the helm, stakeholders will be watching closely to see how these efforts translate into improved financial performance and strategic positioning in the coming quarters.