Catena expects revenue drop of 30% in Q3, cuts jobs

Neha Soni October 25, 2024

SiGMA news

Affiliate company Catena Media has implemented cost-cutting measures, including restructuring and revealed a non-cash impairment charge for the third quarter of 2024.

The company has booked a non-cash impairment charge of €40 million ahead of third quarter results due on 7 November 2024. The charge is largely due to the write-down of certain sports betting assets.

Effective 1 November, the company has let go 29 positions within its content marketing team, which Catena said is an effort to further “streamline and right size” resources within its media network. Catena will pay severance costs of approximately €400,000 as a result of redundancies, with the company projecting cost savings of €2.2 million annually.

CEO comments on market challenges

According to the preliminary figures for Q3, the company is expected to register revenue between €10.5 million-€11.0 million. Catena expects adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) to be in the range of €1.0 million-€1.5m million, compared to €3.2 million registered in the third quarter last year, corresponding to a margin of 10-14 percent.

New CEO Manuel Stan (pictured above) said, “It is important that our balance sheet reflects current realities. In sports betting, we have been operating at a loss for an extended period. We have responded to market challenges by shifting resources away from loss-making products and into those that we believe have the best potential to generate long-term value. I believe that this strategy will position us for success in the coming quarters.”

Commenting on corporate developments, Stan said, “As part of our drive to embed our new product-led organiaation, we are optimising the operational teams to achieve a flatter structure that is more closely aligned with our product goals. Today, our priority is to support all the individuals who are affected by these changes.”

In the future, the company said the management will prioritise addressing the monetisation of a smaller core of flagship products and diversifying revenue streams. This follows Catena’s recent shift toward a new product operating model focused largely on core brands and shifting from underperforming, non-core products.

Looking ahead, Stan concluded, “We are keenly aware that the market is looking for signs of a return to revenue growth. Although the figures reported today do not yet show that improvement, we see positive signals from the changes we have made in recent months, such as a leaner cost base and improved search rankings, and we remain on course to achieve our objectives.”