Catena Media reported a 14% year-over-year drop in revenue during the second quarter earnings call, posting €12.8m in revenue.
The company has been undergoing a rapid adaptation period, faced with numerous technical challenges traced back to Google’s changing algorithms that have hit some of the best-established affiliate companies in the sector.
Catena Grapples with Past Mistakes Under New Leadership
Catena has been no exception with the company seeing a decline in its operational results. Regardless, Catena has been adapting quickly under the leadership of Manuel Stan, the company’s new CEO who took over the company on July 1, and who has remained somewhat critical of the previous leadership.
Stan argued that his predecessor, Pierre Cadena, had indeed shown skilled leadership but made the mistake of spreading the group’s resources “too thin,” the incumbent argued somewhat critically.
“The new board and management agree on the need for a laser-sharp operating focus. We are now in a stronger position to concentrate on the core products and drive revenue,” Stan said during the earnings call.
Presently, 88% of Catena Media’s revenue is derived from the North American market which continues to be the bulk of the company’s operations. However, revenue in the market fell by 11% to €11.2m, the company’s earnings update reflected.
More importantly, the company saw a 17% decline in the number of depositing customers, down to 31,475 from 36,935 a year ago. Both numbers relate to the second-quarter number of depositing customers.
Similarly, EBITDA shrunk by more than 67% to €700,000 the company noted in the update. Stan has tried to balance between offering critics and leadership direction, arguing that when he took over the company, he saw a lot of “energy” directed in certain areas that may not be always ideal.
Strategic Review Initiated, Hopes for Better Results Raised
However, Stan has been able to organize the Board of Directors and complete an extensive review that will allow the company to shed some of its low-performing domains and move team members and resources into the company’s best product instead.
Importantly, though, Stan said that the company has been able to drive some important changes towards the end of the second quarter that should show up on the balance sheet in Q3. Some important media partnerships were negotiated, Stan explained.
The company is also rethinking its sports betting strategy and is looking to replicate the successful model it used to promote online casino products into the segment right now. Regardless of these rather moribund results, the company remains optimistic about the future.
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