Catena Media’s EBITDA plummets 95% in Q1 as interim CEO talks up incoming leadership team

Catena Media suffered a “quarter of underperformance” in Q1 2024 as EBITDA plummeted 95% year on year (YoY) to €909,000 and revenue decreased 49% YoY to €16m.

Interim CEO Pierre Cadena said the firm was implementing several changes to “confront continued poor performance” through Q1 2024 to improve results in the second half of the year. three quarters?

Adjusted EBITDA from continuing operations for the group fell 90% YoY to €1.9m from €18.7m,  while EBITDA margin decreased 47 percentage points.

Non-adjusted EBITDA landed at €909,000, down from €17.9m in Q1 2023, with the margin falling 51 percentage points to just 6%.

There was a 90% YoY drop in operating cash flow, with the figure standing at €1.2m, while revenue slumped 49% from €31.5m to €16m.

Revenue in North America decreased 50% YoY to €14.3m and, despite the significant decrease, North America accounted for 90% of total group revenue from continuing operations.

Total new depositing customers (NDCs) for the affiliate fell 41%, from 74,186 last year to 44,077 during the first three months of the year. Catena confirmed 81% of NDCs were on a CPA basis.

Breaking revenue down by vertical in North America, casino revenue fell 15% YoY to €8.8m while sports betting revenue saw an even steeper drop of 70% to €5.5m.

Adjusted EBITDA for the region fell 72% YoY to €5.4m, with NDCs falling 41% YoY to 41,432.

Revenue for the rest of the world stood at €1.7m, a 36% YoY decrease, with casino dropping 46% to €1.1m and sports betting falling 1% to $607,000. Dollars ok??

NDCs for the rest of the world dipped 37% to just 2,645 during the reporting period.

Cadena called the results “unsatisfactory” as he detailed plans for the Stockholm-listed firm to resume growth later this year.

The CEO said: “Catena Media is implementing a programme of organisational and leadership changes to confront continued poor performance through Q1 2024.

“This transition is essential as we continue to target organic revenue growth in the second half of this year. Operational outcomes during the period were again unsatisfactory, especially in North American sports.

“Stronger competition, tightened marketing spending by operators, and challenging comparables with Q1 2023 – when online sports betting went live in Ohio and Massachusetts – combined to push revenue and EBITDA lower.”

Cadena added that there was shoots of progress, with quarter-on-quarter growth of 12% for North American casino revenue, as he also talked up future AI and sub-affiliation opportunities.

Catena Media has undergone significant change in the past few months, with CEO Michael Daly leaving on 26 February and Cadena assuming the role on an interim basis.

Kindred Group’s US senior vice-president and general manager Manuel Stan was appointed new CEO on 5 March, coming into the post from 1 July 2024, while Michael Gerrow was announced the new CFO, effective from 15 April.

On the refreshed leadership team, which will include Edward Midolo as chief technology officer, Cadena said: “We expect to expand the leadership rebuild in the near future with senior appointments for product and commercial roles.

“I am confident that the new team possesses the experience and acumen to improve operating performance and drive the business forward after several recent disappointing quarters.”

There were two online sports betting affiliation launches in Q1, first Vermont on 11 January followed by North Carolina on 11 March. Cadena confirmed the latter to be the firm’s strongest performing US state due to the NCAA’s March Madness tournaments.