Catena Media suffers Q2 revenue slide as Google update takes its toll
EBITDA takes a massive 125% hit year on year as the Malta-based affiliate endured “suboptimal” media partnerships after search engine update
Catena Media recorded revenue of €12.8m for Q2 2024, representing a 14% decrease year on year (YoY), as May’s Google update continued to hamper the Malta-based affiliate.
Although casino revenue increased 3% YOY to €10m, sports revenue slumped 47% from €5.2m in Q2 2023 to €2.8m for the corresponding quarter in 2024.
North America continued to be Catena’s most valuable revenue stream, despite revenue in the region falling 11% YoY to €11.2m. Revenue from the Rest of the World came in at €1.6m, down 33% YoY.
Non-adjusted EBITDA for the quarter stood at a negative €574,000, a massive 125% drop from the €2.3m generated in the corresponding period the previous year.
Adjusted EBITDA also dropped 67% to €680,000 but higher than the €500,000 predicted by the company back in June.
New depositing customers slumped 17% YoY to 31,475, driven by a slump in sports betting conversions of 46%. Casino new depositing customers, however, were up 5%.
Operating expenses for Q2 totaled €14.7m, down from €15.2m the year before.
Personnel expenses came to €6.9m, direct costs were €3.5m, depreciation and amortisation expenses were €1.4m, while other operating expenses came to €3m.
Overall, Catena made a loss of €2.7m for the quarter, compared to the €18.2m loss experienced in Q2 2023.
May’s Google search update also continued to prove to be a significant obstacle for the affiliate.
The changes impacted on the quality of Google search, with websites being negatively affected by having third-party content which looked to take advantage of a strong domain reputation.
Poorly performing media partnerships had also hampered the affiliate during the first quarter of 2024.
Catena Media CEO Manuel Stan said that media partnerships will continue to be of interest to the company going forward, despite the “immediate negative effect” the Google update had on the company.
He said: “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.
“During the quarter, we also renegotiated some media partnerships and withdrew from others where results were suboptimal. Media partnerships remain of interest provided they offer the right financial and commercial terms,” he added.
Q2 also saw Catena revamp its executive team, with Mike Gerrow coming in as CFO, and Stan being named as permanent CEO.
Stan added: “The new board and management agree on the need for a laser-sharp operating focus. We are now in a stronger position to concentrate on the core products and drive revenue.
“To that end, we have completed an extensive prioritisation exercise and, as a first step, we are clearing many low-performing domains to allow our teams to focus on the top products.
“I am excited by the challenges ahead and optimistic of the future as we maximise 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.”