Catena Media suffers revenue slide and soaring losses in Q3
“Past misinvestment” leads to 33% decrease in topline figure as CEO Manuel Stan completes new look C-suite with ex-Kindred Group head joining as chief legal and compliance officer
Catena Media has recorded Q3 2024 revenue of €10.7m (£8.9m) as bosses said the reporting period was “challenging” amid a 33% year-on-year (YoY) slide in revenue.
Additionally, adjusted EBITDA for Q3 came to €1.3m, down 58% YoY. Adjusted EBITDA margin also dropped by seven percentage points to 13%.
Operating expenses for the quarter soared 231.7% to €53.4m, mainly due to a €40m “impairment on intangible assets” related to a write-down against the affiliate’s sports betting assets.
In turn, this contributed to Catena making a €41.7m loss for the quarter, slumping further from the €4.5m loss it made in Q3 2023.
When it came to attracting new customers, Catena had 27,342 new depositing customers for Q3, down 32% YoY.
Breaking Catena’s operations down by vertical, casino revenue contributed €8.2m, down from €10.1m the previous year.
Management said the decline was as a result of “annual seasonality patterns” as well as several key brands exiting the Japanese market which had “hampered performance”.
Sports betting revenue took a significant hit, dropping 57% to €2.5m, with the Stockholm-listed affiliate pointing to a lack of US state launches compared last year when Kentucky went live.
The continued impact of Google’s search update was also lamented, although there is hope the tide will turn following the reorganisation of the sports betting arm, which saw 29 redundancies handed out last month.
Although North America continued to be Catena’s biggest contributor, revenue from the region fell 29% YoY to €9.5m. Revenue from the rest of the world also fell 53% YoY to €1.2m.
In terms of the first nine months of the year, revenue amounted to €39.5m, representing a 37% decrease YoY.
In the year-to-date, adjusted EBITDA has plummeted 84% YoY to €3.9m, with the group’s share price down more than 60% since 1 January.
In early trading this morning, Catena’s shares were down almost 4% to SEK4.72 (34p).
In his first full quarter in charge, Catena Media CEO Manuel Stan attributed the company’s underperformance in sports betting to a mismanagement of products.
He said: “In sports betting, it was disappointing we did not see the usual boost from the start of the NFL season in September. This reflected our underperformance as well as past misinvestment in the sports portfolio.
“While we are working hard to address these issues, we appreciate it will take some time to get back on track. We have been operating at a loss in sports for an extended period due to products that have not been optimally managed.
“In addition, the organisation was scaled for a faster rate of new state launches than we have seen in recent periods.”
Stan remained optimistic about the firm returning to profit in the next quarter, as he revealed his new look C-suite had been completed with the arrival of Liv Biesemans.
Biesemans will join the firm from 1 January and will serve as chief legal and compliance officer. The new exec moves over from Kindred Group where she has spent more than 12 years, most recently, since July 2019, as group deputy general counsel.
The CEO added: “In summary, while Q3 did not deliver the revenue growth we are striving for, I am pleased with our progress in improving margins and optimising the business.
“The steps we have taken to reduce costs, reset agreements and focus on core products give us a solid platform to build on. As we head into Q4, we remain focused on executing our strategy and returning to profitable growth.”