Catena Media second-quarter revenue down 5%

Finance News

Catena Media’s second quarter revenue dropped 5 percent in Q2 amid sports calendar seasonality and macroeconomic impacts on player spend in multiple markets. 

Revenue growth of 21 percent in the fast-developing North American market despite the seasonal lull in sports. Slower than expected initial revenue gains in Ontario after the launch of licensed online sports betting and casino in April due to unforeseen regulatory constraints on marketing.

Altered market launch timetables are likely to delay attainment of the group’s 12-month USD 100m revenue goal in North America until the first half of 2023. Revenue was EUR 28.9m (30.4), a decrease of 5 percent.

High inflation and energy prices and weaker economic conditions affected consumer spending in European markets in both sports betting and casino.

CEO Michael Daly’s comments: Q2 proved a challenging quarter for Catena Media as largely external factors led to a disappointing 5 percent dip in group revenue and a margin squeeze in parts of the business that caused adjusted EBITDA to decrease by 40 percent. A sharp deterioration in global economic conditions affected trading in multiple markets, denting performance in parts of our online sports betting and casino portfolio just as we had taken on extra cost to support new market launches and product upgrades.

During the quarter we took steps to reduce expenditures in response to the changing landscape and scaled back strategic investments from planned levels. Although we saw an initial effect of these measures in Q2, it was insufficient to compensate for the full impact of lower margins, particularly under our revenue share agreements with operators outside North America.

I nevertheless remain optimistic about the forward outlook. Catena Media is an agile business with global reach in markets where the fundamentals for online sports betting and casino remain strong.

The changed economic environment will likely reduce user spending on entertainment in coming quarters, and we are pivoting aggressively to this new reality. Our priority is to continue to remove costs where we can and to adapt the business to lower margins in key markets while continuing to develop the many attractive growth opportunities ahead of us. People will still be betting and we will be finding those new bettors and bringing them to the table for our partners. Volumes will likely reduce in some markets but increase in others.