Online lead generation company Catena Media recorded a decrease of €0.8 million in revenue during the third quarter (Q3) of 2022, equivalent to a two per cent drop from the same period last year, it shared on Thursday.
This comes despite a rise of 11 per cent in revenue in its North American market to €18.6 million, with this being equivalent to 58 per cent of group revenue. This rise was primarily led by the launch of licensed online sports betting in Kansas, United States, and by a strong start to the National Football League (NFL) season.
Solid growth in established markets contributed to a 43 per cent increase in North American sports revenue when excluding the Arizona and Kansas launches.
Catena Media’s organic growth was down by four per cent during Q3, or by three per cent when excluding the German sports betting and casino market.
As part of the company’s expanded strategic review which was announced in August, restructuring measures allowed for combined annualised cash savings in Europe of €5.5 million to be unlocked, higher than the initially €5 million target. The savings, which included a 25 per cent reduction in European headcount, will be fully effective from Q1 of 2023.
Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell by 29 per cent to €11.7 million from the comparable period’s €16.4 million, corresponding to an adjusted EBITDA margin of 36 per cent. The company stated that this reflects the “continued strong growth-oriented investment into the fast-expanding North American market”.
Earnings per share totalled -€0.08 before dilution and -€0.05 after dilution, representing further drops from the comparable period’s -€0.51 and -€0.34 respectively.
Commenting on the financial performance, CEO Michael Daly remarked that Q3 was a “healthy quarter” for Catena Media, as it reported “strong growth” in its core North American business.
“For the group, revenue decreased slightly, and the EBITDA margin narrowed. I am nevertheless encouraged by our overall performance given macroeconomic challenges in multiple markets, our heavy growth-oriented investments in North America, and considering the internal engagement that the ongoing strategic review demanded from the business throughout the period,” he added.
Mr Daly remarked that the strategic review “is nearing completion”, with certain assets currently in a “divestment phase”. “Amid significant interest from multiple parties, this process is being managed by an external advisor and is approaching a conclusion. I look forward to making a fuller announcement in the near future,” he continued.
He stated that Catena Media’s “strength and expertise in organic search” has made it “the leading affiliate for online sports betting and casino in North America”, and the company sees “no reason why this remarkable growth story should not continue”.
“High player values and public enthusiasm for online sports betting and casino are projected to support high margins for the foreseeable future. And as the market gradually shifts towards maturity in terms of state launches, we believe that operator-side activities and the development and refinement of our affiliate offerings will preserve healthy growth rates even in established markets,” Mr Daly said.
He continued by saying that Catena Media is continuing to “build for the future” and is doing so “from a position of unprecedented strength”. Concluding, Mr Daly remarked that the company’s “low debt, strong cash flow, organise search know-how and lean organisation” make it “uniquely placed to set the pace in lead generation for online sports betting and casino – in North America and beyond”.
Headquartered in Malta, Catena Media has a large portfolio of web-based affiliation brands that guide users to customer websites and enrich the experience of online casino and sports betting players worldwide. It employs over 450 people in Europe, North America, Asia-Pacific and Oceania.