Catena Media hinted a month ago that it thought it might be able to report record revenue growth for the first quarter of the year, and it wasn’t wrong. The official numbers are out, and the global gaming affiliate company is outpacing the market by a long shot. Thanks to increased attention to the US gaming market and improvements in other parts of the world, Catena reported a year-on-year revenue increase of 52.4%, as it took in $49.8 million during the first three months of the year.
Catena Riding a Wave of Success
The $49.8 million was better than Catena had expected at the beginning of April when it predicted it would report record revenue of as much as $49.2 million. A year ago, before COVID-19 set in and before the US began its big casino and sports gambling push, the company reported revenue of $32.5 million. The North American market produced a 200% jump in revenue as Catena launched in Michigan and Virginia during the first quarter. CEO Michael Daly, who only took the helm this past January, is waiting for other states to go live and is also optimistic about the company’s chances for growth in Ontario, Canada, once the country’s market opens up.
Daly realizes that there have been challenges but knows the company has a bright future. He explains, “We still have a way to go to realize our full potential, but the outlook is bright, and I see clear promise for a prolonged upward trajectory for Catena Media in the next five to 10 years and beyond… Change can easily disrupt an organization, so I was especially cheered to see our teams deliver exceptional performance in Q1 in spite of transformation-related distractions.”
Dissecting the Numbers
The casino-related activity was a big winner in the first quarter, providing 62% of the company’s overall revenue. This was the result of a 53.7% year-on-year increase in revenue for the segment, which came in at $30.7 million for the quarter. Much of that improvement was due to the gaming expansion taking place in the US, but also to Catena’s operations in Italy and Japan. In the latter, the company saw double-digit growth of its revenue that could be a hint at things to come once Japan’s gaming market expands. The country is working on its plans to introduce integrated resorts, and there have also been rumors that it might explore sports gambling.
The increased attention given to sports gambling in the US has provided a significant boost to Catena, as well. Revenue from the segment increased by 65%, in year-on-year terms, to $17.54 million as more states legalized sports gambling and several big sports events, including Super Bowl LV and March Madness, were held in the quarter. With more states legalizing sports gambling and Catena making key acquisitions, the company’s revenue is likely to continue to grow by significant amounts.
After stripping out all of the operating expenses, taxes, fees, and costs associated with acquisitions, Catena still enjoyed a solid bottom line. Its profit for the quarter was $20.7 million, an increase of 84.8% from where it was a year ago, despite additional spending during the quarter. Daly attributes this to smart internal processes, asserting, “From an internal perspective, we continue to optimize our ability to maximize growth through onward expansion in our North America while also making inroads into frontier markets in Latin America, Asia, and Africa.”