Catena Media Considers Additional Cost-Cutting amid Rough Q3 Financials

Catena Media is eyeing new cost-cutting measures after challenging third-quarter results in 2024. The Malta-based company, specializing in digital marketing for the online gambling sector, saw its quarterly revenues dip by one-third, from EUR 15.9 million ($17.2 million) to EUR 10.7 million ($11.58 million) year-on-year. These results mark a trend of revenue decline that CEO Manuel Stan aims to combat with strategic restructuring and further operational cuts.

The Company Remains on a Downward Streak

Third-quarter revenue in North America was down 29% to EUR 9.5 million ($10.28 million), constituting 89% of the group’s revenues from continuing operations. New Depositing Customers (NDCs) also plunged by 32% year-over-year, highlighting a challenging environment in the online sports betting sector. EBITDA from continuing operations nosedived to EUR -1.4 million ($-1.51 million), a stark drop from last year’s EUR 2.9 million ($3.14 million).

Q3 was a challenging quarter. Lower revenue also reflected the ending of certain media partnerships and changes made to other partner agreements.

Manuel Stan, Catena Media CEO

Despite these challenges, there are bright spots in its North American casino sector, which showed a marginal increase in like-for-like revenue. Products like Bonus.com, which recently expanded into the Latin American market, helped Catena stabilize its portfolio and are well-positioned to become consistent contributors to revenue.

Profitable Growth May Require Further Optimizations

In response to this lackluster financial performance, Stan finalized an internal restructuring, resulting in a flatter organizational model better positioned to support core product goals and content creation. The restructure included the challenging decision to lay off 29 employees, which should yield EUR 2.2 million ($2.38 million) in annual savings starting in November. Stan noted these efforts would enhance the company’s adaptability in the volatile digital landscape.

Following the restructuring, Catena announced a non-cash impairment charge of EUR 40 million ($43.28 million) on some sports and casino assets, reflecting a revaluation in line with a move toward a product-led strategy. The company has also renegotiated an early release from certain long-term capitalized contracts. While such early settlement negatively impacted Q3 EBITDA, it will save EUR 1.4 million ($1.51 million) in the future.

We have adapted the organization to these realities, and in Q3 continued to take actions to return to profit by adjusting the cost base.

Manuel Stan, Catena Media CEO

Catena intends to use its long-term savings to settle some of its debts and position itself for further growth. Stan noted that getting back to profitability will mean continued adjustments to a tough market and weaker sectors, but he expressed confidence in Catena’s renewed focus. The company’s enhanced leadership team should be more than up to the task, tightening operational efficiency and delivering product-oriented growth.

The steps we have taken to reduce costs, reset agreements, and focus on core products give us a solid platform to build on.

Manuel Stan, Catena Media CEO

Catena’s Q3 results underscore the urgency of its restructuring initiatives and Stan’s commitment to a leaner, more responsive organization. However, cost reductions and business optimizations may necessitate more tough decisions as the company remains committed to its cost optimization and core product alignment strategy.