Catena Media EBITDA sinks as it is revealed 25% of European staff have been axed

Catena Media has posted a 111% downturn in EBITDA as the affiliate business revealed its strategic review had led to it slashing the European headcount by more than a quarter. The Malta-headquartered firm posted a negative EBITDA of €1.5m (£1.3m) in Q3 2022, falling from €14.9m in Q3 2021. The affiliate noted that its strategic review, which led to the firm openly selling off its Europe-facing assets, had led to the significant downturn. Catena said the review was nearing completion at the time of publication of EBITDA, with the firm having reduced its European headcount by 25% and generated annualised savings of €5.5m. As of 30 September, the group had 452 employees, rising from 426 in Q3 2021. Catena said the restructuring had also seen it offload assets in grey markets, amounting to a disposal of €12.8m, as it continues to eye sustained growth in North America. In fact, while group revenue was flat with a 2% year-on-year (YoY) decrease to €32.3m, North America revenue jumped 11% to €18.6m, accounting for 58% of the group’s revenue. Catena inked its first major US media deal in August after securing a partnership with Advance Local’s NJ.com website in New Jersey. Additionally, post-Q3, Catena confirmed it had released pre-live marketing campaigns with operators in Maryland and Ohio ahead of projected launches. In October, revenue from North American sports betting and casino increased by 20% compared to October 2021. Breaking down the group’s total revenue by vertical, casino continued to take the lion’s share, representing 59% after returning €17.9m in the quarter. However, this was a 10% YoY dip for the segment, as impacts in Japan and the continued strategic review in Europe hampered operations. The group’s sports betting arm returned €14m in revenue, a 13% jump YoY, to account for 43% of Catena’s revenue. Finally, financial returning made up the final 1% of total revenue after posting a 51% downturn to €0.4m. Elsewhere, new depositing customers for the quarter slipped by 24% from 153,701 to 116,746. Reflecting on the quarter, Catena CEO Michael Daly once again championed the potential of the North American market while he lifted the lid on his thoughts behind the strategic review. Daly said: “The measures being taken, and to be taken, as part of the strategic review are optimising the business to capitalise on the growth of online sports betting and casino in North America, where a wave of regulation continues to open new markets to licensed operators and create exciting openings for Catena Media. “Other future opportunities include Latin America and esports, both of which offer high potential for profitable growth over the longer term,” he added. Daly confirmed that despite the review, he still has hopes for Catena’s Italian and UK assets moving forwards, before touching on the success in the US. “Our strength and expertise in organic search has already made Catena Media the leading affiliate for online sports betting and casino in North America. “We see 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.” At the time of writing, Catena shares are down 16% on the day to SEK23.19 (£1.85).