Google search change prompts Catena Media to scrap full-year forecast
The gaming affiliate group expects the change in algorithm to harm the effectiveness of some media partnerships.
US.- Catena Media has lowered its expectations for this quarter and scrapped its full-year forecast due to changes in Google’s search engine. It said that changes to the organic search policy were likely to hurt the search ranking of sports betting and casino content on major news sites, impacting the effectiveness of some of its media partnerships.
Catena said the update would reduce both revenues and direct costs. However, it also hopes to see higher traffic and organic search rankings for some of its own brands. For Q2, it now forecasts revenue of €12.5m-€13.5m and adjusted EBITDA of €0.5m-€1.5m. That would still mark a return to revenue growth. As for the full-year, it said it would issue a new forecast at a future date.
Catena Media’s interim chief executive Pierre Cadena said: “Catena Media is embedding a new product-focused operating model as part of our efforts to reestablish the company as a healthy business. We believe that this is the right action in our strategy and we still forecast a return to sustainable growth with high-margin operations from the second half of 2024.
“This provides us with further financial flexibility and strengthens our ability to repay our senior bond next year and to confidently manage the business debt load. We continue to see media partnerships as an important source of added value in a fast-moving marketplace. We are ready to invest in partnerships that generate profit for both parties and will explore attractive collaborations in this space while redoubling our focus on our organic products.”
For 2023, Catena reported a drop in annual revenue for continuing operations to €76.7m, down by 22 per cent year-on-year. North American revenue represented 87 per cent of the total and was down by 21 per cent.
Adjusted EBITDA fell by 47 per cent to €25.4m, representing an adjusted EBITDA margin of 33 per cent. The group has updated its financial targets for 2024-2026. It expects double-digit organic growth in revenue and adjusted EBITDA for 2025 and 2026. It aims to develop a range of technical and data-based capabilities using AI while cost optimisation measures will continue.
