Catena Media continued in its significant efforts to streamline operations as it navigated headwinds in the fourth quarter of 2024.
Overall revenue in the quarter fell by 30% to €10.2m, whilst new depositing customers for the firm dipped by 19%.
There was a slight uptick in casino segment margin, which was boosted by 2 points even as quarterly casino revenue fell by 7% to €7.8m.
Stan provided the following outlook on the company’s Q4 performance: “The Q4 results reflected the ongoing challenges we face in our core markets. For the second consecutive quarter, profitability improved following the measures taken since mid-year to streamline the cost structure. These actions reduced the cost base by 33 percent from Q4 2023, lifting our adjusted EBITDA margin from 5 percent in Q2 to 15 percent in Q4.
“This represents a significant improvement, but reaching higher profitability will also require a return to top-line growth. In Q4, revenue remained under pressure as measures to focus the group on the new strategic priorities set by management gained traction more slowly than anticipated.”
Updating investors, Catena Media CEO Manuel Stan cited back-to-back Google updates in November and December as being a crucial factor in elevated volatility during the quarter.
He revealed that at the end of the year, the group’s Google score was 5.35, the worst it had been since they started measuring this indicator. However, Stan assured investors that the score at the end of the quarter is not necessarily indicative of the full quarter performance.
Furthermore, he added that although there was volatility with Google, the group is able to recognise solutions and improve search engine performance.
Stan added: “It is clear that our initiatives in search engine optimisation (SEO), product development and geographic expansion will take additional time to translate into revenue gains. While this is unsatisfactory in the short term, I believe we now have the right focus areas and organisational structure in place to create a sustainable business with solid long-term growth prospects.”
North America casino operations fell by 12% as a result of the volatility brought on amidst search ranking competitiveness after Google updates.
The group’s CEO Manuel Stan added that regulatory developments in the US remain slow, with the firm eyeing expansion and growth in states that are already regulated.
He also outlined that he anticipates moving forward that operators will continue to apply pressure and optimise their margins with the affiliate sector. However, he assured investors that they have managed to secure strong deals with partners.
In terms of the sweepstake sector, Stan revealed that the vertical continues on an upward trajectory, with it not just being an immediate strategy but also a bulletproof strategy for the group’s casino segment as they look to build their brand in states that are slower when it comes to regulation.
According to Stan, “sweeps represent the best gateway to put themselves in a strong position for when states do decide to regulate and it remains one of their fastest growing verticals.”
He did however concede that the regulatory pressure is increasing, but emphasised that they haven’t seen anything that leads them to believe they need to be concerned about the future of sweepstakes.
Catena Media is also set to take a new approach to AI after confirming the discontinuation of its AI-based content generation platform.
The firm emphasised that it still sees AI as a key part of its growth strategy moving forward, however, it has embarked upon a new approach to maximising the tech. The group specifically outlined that AI can be an important business enhancer for scaling up content output and quality.
iGaming Expert Analysis: There’s a lot to digest from the latest Catena Media update, notably the group remains bullish on the future of the sweepstake vertical, even as regulatory pressure grows from a myriad of states. They emphasised that sweeps aren’t just a force for growth but are also an avenue to gaining a headstart in states that are edging towards full regulation.
Furthermore, Catena also emphasised that, as the relationship between affiliates and operators continues to evolve, affiliates need to do more to enrich what they are bringing to the table – adding layers of player communication and boosting CRM strategies for operators.
