Catena Media posts 11% revenue rise in North America
Catena Media’s revenue rose 11 percent in the fast-growing North American market in Q3, led by the launch of licensed online sports betting in Kansas and a strong NFL season start. Group revenue decreased by 2 percent.
Solid growth in established markets contributed to a 43 percent increase in North American sports revenue when excluding the Arizona (Q3 2021) and Kansas launches.
As part of the expanded strategic review announced in August, restructuring measures unlocked combined annualised cash savings in Europe of EUR 5.5m, higher than the initial target of EUR 5m. The savings, which included a 25 percent reduction in European headcount, will be fully effective from Q1 2023.
CEO Michael Daly’s comments: Q3 was a healthy quarter for Catena Media in which we again reported strong growth in our core North American business. Revenue in North America reached EUR 18.6m, an increase of 11 percent from Q3 last year, which was an extremely strong quarter that saw the legalisation of online sports betting in the large Arizona market and the nationwide launch of a large operator. Excluding the Arizona opening and also the successful onboarding of Kansas in Q3, North American revenue was up 24 percent overall and rose 43 percent in sports.
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.
The strategic review is nearing completion at the time of writing. Certain assets are currently in a divestment phase. Amid significant interest from multiple parties, this process is being managed by an external adviser and is approaching a conclusion. I look forward to making a fuller announcement in the near future.
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.
In Europe the region where the current high-inflation environment is most pronounced and the squeeze on player spending is most acute, we scaled back our operations during the quarter to focus on a smaller core of strategic high-margin brands primarily in regulated online sportsbook markets, and to a lesser extent in casino. The key brands offer stable near-term growth potential and are located in the UK and Italy.