Home NewsMarketing Catena introduces new operational model after “underperformance” of Q1

Catena introduces new operational model after “underperformance” of Q1

by
50 views 6 minutes read


Catena Media has announced that its revenue in the first quarter of this year had almost doubled from EUR16.0m to EUR16.0m. This is equivalent to $17.2m or PS13.7m.

Catena’s revenue was down 49.2% in Q1. This decline occurred across the board. North America’s revenue has been cut in half, due mainly to the decline of sports betting revenues, and revenue for the rest of the world fell by 34.6%.

Catena, in response to the “underperformance”, as described by interim CEO Pierre Cadena, during the third quarter and declines projected for 2023, will implement a new operational model. The new operating model will also be supported by changes in management.

Catena undergoes a radical change

In March, Catena announced Manuel Stan to be its new CEO. Michael Daly left the company in February. Cadena was temporarily at the top. Stan will take the reins on July 1.

Michael Gerrow was appointed as the group’s chief financial officer by Catena last month. He will take up his new position in mid-April. Catena promoted Edward Midolo, who has been with the company for six years, to chief technology officer.

It has also proposed that Erick Flinck be appointed as the new Chairman. Catena will vote on the motion at its AGM, which takes place on 15th May.

Catena has announced that it will “reinvent” the core focus of its technology by creating new products which prioritise innovation, technology and user experience.

The company’s main goals are to improve its organic search and grow its paid-media division. It also wants to secure new media strategic partnerships, and invest in new technologies, including artificial intelligence and paid-media subaffiliation.

These initiatives also include “significantly reducing our presence on unregulated grey market and in those markets with uncertain regulatory frameworks. It will also move away from a revenue model based on cost per acquisition (CPA), and towards one that is dominated by a mix of revenues. It says that this will lead to a higher, more stable revenue flow over time.

The decision was made late last year to sell its Italian operations. This sale was the culmination of a strategy review which began in May 2022.

Interim CEO supports plan to grow business

Cadena explains that these changes are essential to the progress of business.

Cadena explained that the initiatives had multiple foci: technological leadership, strategic product development, enhanced operational efficiency and a multichannel structure for diversifying our product offering.

In Q1, we implemented a series of measures to prepare the organization for this change. The geography-based model was replaced with an operating model that is product focused. This strategic pivot will enhance our agility, and help us focus on high-value products.

The key products in our portfolio will have a distinct management structure, with clear missions, brand purposes and visions. This is all supported by financial and operational metrics that ensure accountability.

The creation of “fast-response” product squads will also allow us to respond more quickly and decisively than ever before to the market’s dynamics.

He also supported the new Catena management team. He stated: “I’m confident the new management team has the skills and experience to drive forward the company after a number of disappointing quarters.”

North America’s performance on sports betting declined in the first quarter

Catena’s Q1 results are difficult to find positives.

North America was its main market and revenue fell by 50% to EUR14.3m. This represents 90.0% total revenues for Q1. The main reason for this is the decline in sports betting revenues to EUR5.5m. Catena attributed this to a weaker performance in terms of operations and the lacklustre Super Bowl. In Q1 2023, dual sports betting was also launched in Ohio and Massachusetts. Catena went live in North Carolina in March this year when it opened the market.

Catena also describes the decline in North American revenue as “unsatisfactory”. It was still higher than the Q4 2023. This could be a sign that increased investment and product focus is paying off.

The group stated that Catena Media will continue to invest in order for this trend to persist. This should result in year-over-year growth for future quarters.

Revenues from the rest of the world drop by 34.6%

This was also a difficult read for the operations of the Rest of World segment. This area’s revenue fell by 34.6% to EUR1.7m.

Casino revenue remained almost the same at EUR607,000 despite a 45.0% drop in sports betting revenues to EUR1.1m.

Catena cited the operations in Japan and said that performance had been impacted due to a more extensive overhaul than expected of CasinoOnline.jp. Slotsia in Japan, however, has doubled their revenue for Q1 and is now the biggest Japanese brand.

Catena stated that “Plans have been put in place to increase Slotsia’s user base by expanding the offer, strengthening marketing efforts and providing a multichannel user experience.”

On a group-wide basis, the CPA agreement accounted for 86.0%. About 12.0% of the revenue came from revenue-share agreements, and another 2.0% was fixed fee revenue.

The number of new depositing customers in the industry fell by 40.6%, to 44 077. 81.0% of those classified in this category were in CPA and 19.0% in revenue share.

Catena’s Q1 loss slips.

Spending and operating costs increased only slightly, from EUR16.3m to EUR16.4m. Catena’s main expense was EUR6.9m in personnel costs.

Pre-tax losses for the first quarter of this year were EUR1.9m after accounting for all non-operating expenses, compared to EUR12.9m last year.

Catena reported a loss of EUR222,000 from discontinued operations and paid EUR332,000 tax. Interest payable on hybrid securities had a negative impact of EUR1.3m, while currency conversion brought a positive EUR422,000 impact to the group.

It ended the first quarter with a loss of EUR3.3m compared to EUR21.5m in 2023. The adjusted EBITDA also dropped 89.8%, from EUR18.7m down to EUR1.9m.

You may also like

About Us

On iGamingWorld, we provide in-depth analysis, the latest news and opinions from famous people of the gaming industry.

Featured Posts

Newsletter