Catena Media Q2 EBITDA could slump to €500,000 on Google Search woes
Affiliate also points to faltering media partnerships that are set to be discarded as bosses view H2 as a return to growth period
Catena Media has warned its Q2 EBITDA could be as low as €500,000 (£422,463) on the back of the Google Search updates and poorly performing media partnerships.
The Malta-based firm said Q2 revenue is expected to land between €12.5m and €13.5m, while earnings should finish between €500,000 and €1.5m in what would be a disappointing quarter for the affiliate.
On the Google Search update, which took effect in May and has adversely impacted the rankings of gambling content on major news websites, Catena Media said there were still some signs of positivity.
While the update is expected to “reduce revenues and direct costs arising from some of the group’s media partnerships” there has been some higher traffic and organic search rankings for its owned and operated brands.
On the media partnerships, the affiliate said the financial impact could not yet by fully quantified as it stands, but that it could become “material over future periods subject to the group’s organic traffic offset”.
Certain “lower-margin” media deals will not be renewed when the current terms end, the business also confirmed.
Those partnerships, which were not explicitly named, will expire in Q2 and Q3 and contain more than €1.4m per quarter in minimum guarantees.
Additionally, internal and outsourced content costs are set to decrease between €700,000 and €1m due to the non-renewal of the deals.
In Q1, direct costs for the business increased to €4.6m as a result of higher media partnership costs in preparation for the launch of online sports betting in North Carolina on 11 March.
As a result, the group’s previous full-year 2024 EBITDA guidance has been deemed no longer applicable, but has yet to publish new expectations.
The firm had previously pegged EBITDA guidance of between €20m and €30m as part of its Q1 report.
Pierre Cadena, Catena Media interim CEO, said he trusted in the group’s new “product-focused operating model” and that the business was forecasting a return to “high-margin operations” in H2.
He said: “As a result of these changes, combined with the proceeds from our recent divestments, our balance sheet will be much healthier.
“This provides us with further financial flexibility and strengthens our ability to repay our senior bond next year and to confidently manage the business debt load.
“We continue to see media partnerships as an important source of added value in a fast-moving marketplace. We are ready to invest in partnerships that generate profit for both parties and will explore attractive collaborations in this space while redoubling our focus on our organic products,” Cadena added.