Catena Media, a prominent player in the digital marketing and lead generation space for iGaming and sports betting, recently disclosed its Q1 2024 financial results. The report unveils a challenging quarter marked by a significant decline in revenue and adjusted EBITDA.
Revenue Overview:
In Q1 2024, Catena Media faced a substantial decline in revenue from continuing operations, plummeting by 49% year-on-year to €16m ($17.2m). Notably, North American revenue, constituting 90% of the group’s total revenue, witnessed a sharp 50% downturn to €14.3m. The segment-wise analysis reveals a stark contrast between sports revenue in North America, plunging by 70% to €5.5m, and the rest of the world, with a mere 1% decrease to €607,000. Similarly, casino revenue in North America declined by 15% to €8.8m, while its global counterpart experienced a 46% dip to approximately €1.1m.
Operational Performance:
Adjusted EBITDA from continuing operations mirrored the revenue downturn, plummeting by 90% to €1.9m, resulting in an adjusted EBITDA margin of 12%, a stark contrast to the 59% margin recorded in Q1 2023. One of the primary contributors to this decline was the substantial drop in new depositing customers (NDCs), plummeting by 41% to 44,077. These operational outcomes reflect the intense competition, reduced marketing expenditures by operators, and challenging comparables with the previous year, particularly concerning the launch of online sports betting in certain U.S. states.
Strategic Direction:
To counter the downturn and steer towards growth, Catena Media outlines a strategic roadmap. The company plans to invest in developing new technical and data-driven capabilities, with a significant emphasis on artificial intelligence (AI). Additionally, cost optimization measures are on the agenda to maintain high profitability levels. Catena anticipates a resurgence in organic growth in the latter half of the year and intends to focus on debt reduction and strategic investments. A transition from a Cost Per Acquisition (CPA)-dominated revenue model to a more balanced revenue share model is also in the cards. Furthermore, the company aims to reduce its exposure to unregulated grey markets and jurisdictions with ambiguous regulatory frameworks.
Leadership Changes:
Recognizing the need for transformative leadership, Catena Media announced organizational changes, with Manuel Stan appointed as the new CEO, effective from July 1st. These changes signal the company’s commitment to steering through the challenges and driving growth.
CEO Commentary:
Interim CEO Pierre Cadena acknowledged the disappointing performance and outlined the ongoing initiatives aimed at a turnaround. These initiatives encompass technological leadership, strategic product development, operational efficiency enhancements, and a revamped multichannel structure to diversify product offerings. The rollout of a new technical platform is underway, promising a cohesive architecture for all monetization activities across Catena’s global portfolio.
Catena Media’s Q1 2024 results underscore the challenges it faces in the dynamic iGaming and sports betting landscape. While the downturn in revenue and EBITDA is concerning, the strategic direction, coupled with organizational and leadership changes, signal a proactive approach to address the underlying issues. The company’s focus on technological innovation, operational efficiency, and regulatory compliance will be critical in navigating the evolving market landscape and achieving sustainable growth.