Catena Media, a prominent player in the online lead generation industry, has reported another underwhelming quarter in its Q1 2024 results. After a disappointing end to 2023, the group’s revenue from continuing operations has taken a significant hit, dropping by 49% year-on-year to €16m ($17.2m).

North American revenue, which accounted for 90% of the group’s revenue from continuing operations during the quarter, went down by 50% to €14.3m. The largest fall in revenue was seen in the sports segment in North America, which dropped by 70% to €5.5m. Sports revenue for the rest of the world decreased only 1% to €607,000, while casino revenue for the rest of the world was down 46% to just under €1.1m. Casino revenue in North America also dropped by 15% to €8.8m.

Adjusted EBITDA from continuing operations saw a significant decline of 90% to €1.9m, resulting in an adjusted EBITDA margin of 12%, compared to 59% in Q1 2023. The group also experienced a 41% dip in new depositing customers (NDCs) from continuing operations, totaling 44,077. At the time of writing (12:22pm BST), Catena’s share price was 6.90 SEK, representing a 20.5% decrease from the closing price on Tuesday last week.

Looking ahead, Catena plans to invest in developing new technical and data-based capabilities, particularly in AI, while implementing cost optimization measures to ensure continued high profitability. The group anticipates organic growth to resume in the second half of this year and believes its financial position will allow for focused debt reduction and strategic investments.

Catena also aims to transition from a CPA-dominated revenue model to a higher mix of revenue share and significantly reduce its presence in unregulated grey markets and those with unclear regulatory frameworks. Pierre Cadena, Catena’s Interim CEO, addressed the results, stating, “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.”

He attributed the unsatisfactory operational outcomes, especially in North American sports, to stronger competition, tightened marketing spending by operators, and challenging comparables with Q1 2023, when online sports betting went live in Ohio and Massachusetts.

Cadena also highlighted the ongoing initiatives focusing on technology leadership, strategic product development, enhanced operational efficiency, and a new multichannel structure to diversify product offerings. He emphasized the introduction of a new technical platform, which began its rollout during the quarter and will be integrated across the global product portfolio in Q2.

As Catena Media navigates through another challenging quarter, the group remains focused on implementing strategic changes and initiatives to achieve a turnaround. With Manuel Stan set to take up the position of CEO on 1 July, investors and analysts will be closely monitoring Catena’s performance and the effectiveness of its strategies in the coming months.

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