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Catena Media Plc has initiated an extensive internal investment programme to advance its tech platform and AI capabilities, as investors are warned that challenging trading conditions will continue until the second half of 2024.
The Stockholm-listed igaming media group published its full-year 2023 results, reporting a dire close to year trading, registering Q4 revenues of €14.5m, a decrease of 41% to 2022 comparatives of €24.5m.
Period trading saw Catena book impairment charges totalling €34m, related to the divestment of former European media assets, undertaken as part of the firm’s strategic review.
Reorganising its media network, Catena reported an adjusted Q4 EBITDA from continuing operations of €1.5m, down 88% to 2022 comparatives of €11.8m.
Leadership continues to focus on growth in North America, where Catena registered a 43% decline in revenues to €12.3m (Q4 2022: €21.5m), combined with a 66% decrease in adjusted EBITDA to €4.3m (Q4 2022: €13m).
Group CEO Michael Daly commented on period trading: “In Q4, market headwinds caused revenue and EBITDA declines in our core North American market. Lower cost-per-acquisition (CPA) rates paid by operators again impacted revenue, as did stiffer competition directed against us as the established market leader.
“We are responding to this competition to minimise the impact on market share. As in Q3, a pullback in marketing spend by operators led to lower user searches for sports betting and casino terms and a reduction in new depositing customers (NDCs). We also faced difficult comparatives due to the absence of a large state launch to offset Maryland in Q4 last year.”
On a year-end basis, Catena registered corporate revenues of €77m, a decrease of 22% from FY2022 results of €98m. Revenue from North America stood at €67m, down 21% from €84.5m, accounting for 87% of group revenue from continuing operations.
Following the reorganisation of its media network, further KPIs saw Catena report a 19% decline in new depositing customers (NDCs) to 185,000, compared to FY2022’s 228,600 NDCs.
For year-end trading, adjusted EBITDA from continuing operations decreased by 47% to €25m (FY2022: €48m), as results reflected a steep decline in Catena’s operating EBITDA margin to 33% (FY2022: 49%).
Closing its 2023 accounts, Catena’s consolidated statement detailed corporate losses from continuing operations of €28m, compared to profits of €33m registered in FY2022. Year-end accounts included a total impairment charge impacting profitability of €98.4m.
CEO Daly noted: “A strategic reboot on the scale that we have undertaken can take time and test the patience of employees and shareholders. Q4 was a difficult quarter, but I believe we are now turning the corner. My message today is that our goal is in sight: a leaner, nimbler multichannel Catena Media with the knowledge and technical infrastructure to thrive in our core regulated markets and to deliver a return to growth in the second half of this year.”
Moving into 2024, the board of Catena has launched a new internal investment programme to accelerate the development of the firm’s new tech platform that aims to integrate AI-led enhancements to Catena’s media portfolio to improve organic growth and profitability. Leadership has stated that it expects its new technical platform to launch in Q1 2024, alongside a new joint venture for AI-driven content production.
“The cornerstone of our transformation is a new technical platform that will launch in Q1. Once fully rolled out in Q2, this will be the first time Catena Media focuses affiliation activities on a single, coherent tech infrastructure,” Daly explained.
“Creating this new backbone is a step change that will make us technically far more robust across all products and make it easier to deploy new verticals.”
Moving forward, in North America, Catena assets continue to transition from a CPA model to a higher mix of revenue share, needed for a more sustainable revenue performance over time.
As a result of continued internal investments, shareholders were informed that organic growth is expected to resume in the second half of 2024. Full-year 2024 adjusted EBITDA is expected to be in the range of €20-30m.
Once tech and AI integrations are completed, Catena leadership expects “double-digit organic growth in both revenue and adjusted EBITDA for 2025 and 2026 at group level.”
