Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Catena Media PLC (LTS:0RUE, Financial) has implemented a new organizational structure, leading to an annual cost saving of approximately EUR2.2 million starting in Q4.
- The company has completed a brand new executive management team, enhancing leadership capabilities.
- Despite a decrease in overall revenue, adjusted EBITA improved by 97% quarter on quarter, with margins increasing from 5% in Q2 to 13% in Q3.
- North America contributed 89% of group revenue, showing an increase from 84% in the same period last year.
- The company has made significant efforts to improve profitability, with a 26% decrease in the adjusted cost base compared to Q3 2023.
Negative Points
- Q3 revenue from continued operations was EUR10.7 million, down 33% from the previous year.
- Adjusted EBIDA decreased by 58% from the previous year, indicating financial challenges.
- Sports revenue saw a significant decline, down 60% compared to the previous year, due to increased competition and lack of new state launches.
- North American casino revenue decreased by 12% year on year, highlighting challenges in maintaining growth.
- The company took a non-cash impairment charge of EUR40 million related to a write-down in the book value of certain sports and casino assets.
Q & A Highlights
Q: What measures are being taken in the content and marketing teams to ensure competitiveness while targeting double-digit growth in 2025?
A: The biggest changes include prioritizing products that generate the best ROI and aligning marketing, content, and product teams with these priorities. Positive momentum has been observed, particularly in CRM efforts.
Q: What is driving the unfavorable revenue trends, especially in casino and sports, despite Q3 typically being a strong quarter?
A: In sports, negative impacts stem from media partnerships and competitive pressures. In casino, despite improved rankings, volatility from Google algorithm updates affected performance. CPA pressure is more evident in sports than in casino.
Q: How confident are you in achieving double-digit growth in 2025 given the current revenue trends?
A: The strategy is to be less reliant on new market launches and focus on organic growth through CRM efforts and sub-affiliation. While Missouri and Alberta present opportunities, the focus is on sustainable growth from existing properties.
Q: Will there be any changes in the CPA versus revenue share model moving forward?
A: No major changes are expected. The distribution has been stable around 15% for revenue share, with CPA deals remaining more prevalent, especially in the casino and sweepstakes segments.
Q: What is your view on growth in H2 of 2024 given the current challenges?
A: While algorithmic changes and discontinued media partnerships have impacted the top line, efforts continue to improve the bottom line. No specific guidance for Q4 is provided at this time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
