Catena Media revenue decreases continue in Q2

Revenue for the affiliate decreased by 16% in a period where it also announced long-term media partnerships, appointed a new interim CFO and published new financial targets for the next two years.

Catena CEO Michael Daly said the affiliate’s Q2 was a “quarter of further evolution” as it transitions itself towards becoming a net cash-positive business operating in North America.

Daly also believes that the performance was impacted by a “backdrop of reduced marketing spend by betting operators in North America”. He added this also led to “dampened of search volume and levels of new depositing customers, particularly in sport”.

The CEO also cited seasonal factors with the “absence of a market launch similar to Ontario in 2022” and expects Q3 and Q4 to be stronger with increased sports betting activity. He also revealed that his team are preparing for the launch of licensed sports betting in Kentucky at the end of September that Catena “expect to deliver a moderate revenue boost this fall”.

Catena revenue down 16% in Q2

Catena’s 16% decrease year-on-year in revenue resulted in the affiliate earning €16.9m (£14.43m/$18.44m). This is down from the €20.1m the company was able to earn in the same period in 2022.

Within the company’s revenue, its operations in North America had a matching decrease of 16% from €14.9m to €12.5m. In this period, Catena announced a long-term partnership with Lee Enterprises to provide online sports betting and casino content.

Looking deeper at Catena’s revenue, the company saw its casino operations reduce to €10.5m representing a 20% decrease year-on-year from €13.1m. It also attracted fewer new depositing customers with this reducing by 9% to 44,660.

In terms of sport-based revenue, Catena also faced a reduction here with it managing to earn €6.4m. This is a 9% decrease year-on-year with the company posting a revenue of €7m in the same three-month period in 2022.

Adjusted EBITDA is down 60% from Q2 last year taking the revenue from €6.5m to €2.6m, while cash flow was down similarly by 52% to €8.8m.

Across the whole business, new depositing customers took a hit of 31% as the company attracted 49,770 down from 72,060 in Q2 of 2022.

Revenue down across all segments in H1

The group’s performance for the first half of the year closely follows its Q2 results, with revenue down 9% year-on-year to €55.6m. Revenue from North American operations is also down by 7% as Catena earned €41.5m.

Adjusted EBITDA took a smaller hit for the first half of the year than it did in Q2 with a 20% decrease of €22.7m, down from €28.4m Catena earned in 2022.

Similarly, cashflow fell by 16% to €23.2m and new depositing customers dropped by 19% to 147,115.

Breaking down the segments of Catena’s operations, revenue from casino-related activity was reduced by 12% and sports-based by 7%.

In this period, Catena announced that it was preparing for the 2024 North Carolina sports betting launch while also declaring in January that it saw record revenue from the launch of sports betting in Ohio.

Future direction

Despite the reduction in revenue, the company says that it remains committed to its strategic direction and financial targets as it aims to get North American revenue to $125m with adjusted EBITDA to exceed 50% by 2025.

The affiliate also expects to be net cash positive during the second half of 2023.

Catena Media recently agreed to sell its UK and Australian online sports betting brands to Moneta Communications for €6.0m, but this was announced in August which falls outside of its Q2 and H1 earnings.

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