Catena Media has published its financial results for the first quarter of 2022, declaring another record quarter as revenue grew by 11% year-over-year thanks to new market openings in North America.
The gambling affiliate and media publishing group reported Q1 revenues of $47.6m (Q1 2021: $2.9m), while adjusted EBITDA improved by 2% YoY to $26.9m (Q1 2021: $26.4m), with a margin of 57% (Q1 2021: 61%).
North America contributed 65% of the group’s total returns for the quarter, as its revenue improved by 32% YoY to $31m (Q1 2021: $23.4m). Meanwhile, the number of new depositing customers grew to 171,918, a 9% increase YoY (Q1 2021: 157,546).
Per unit, sports revenue improved by 77% YoY to $26.8m (Q1 2021: $15.1m), accounting for 56% of operational group revenue, while adjusted EBITDA for this segment grew by 127% YoY to $16.3m (Q1 2021: $7.2m) with a margin of 61% (Q1 2021: 47%).
Sports revenue from North America more than doubled during the quarter thanks to new online sports betting market launches in New York and Louisiana, the former of which became Catena’s largest North American market by revenue.
The group notes that New York benefitted from the previous acquisitions of Lineups.com and i15 Media.
North American sports revenue was also helped by the Super Bowl and strong showings in Pennsylvania, Illinois, New Jersey, Colorado, and Indiana.
Latin American expansion maintained its momentum ‘despite a seasonal lull in Brazilian football’, but the group sees ‘encouraging trends’ in Brazil and several Spanish-speaking markets.
Catena’s casino unit, meanwhile, saw its revenues fall by 25% YoY in Q1 to $19.9m (Q1 2021: $26.6m) while adjusted EBITDA fell by 44% YoY to $10.6m (Q1 2021: $18.8m) with a margin of 53% (Q1 2021: 71%).
The group noted that the casino revenues in North America fell YoY, which was expected due to Q1 2021 being an extraordinarily successful quarter in which player activity surged due to Covid-19 lockdowns. The legalization of online casinos in Michigan, and the entry of two major operators to the large Pennsylvania market were also contributory factors.
Despite the YoY revenue decrease, player activity met expectations in Pennsylvania and New Jersey in Q1, while revenue in Michigan was higher than in the previous quarter.
CEO Michael Daly commented: “Q1 was a solid quarter, driven by impressive performance in North America. It gives us an excellent springboard for the remainder of 2022 as we take the business forward.”
Elsewhere geographically, Europe continued to pose some challenges for the company with organic growth falling by 9%. The German sports betting and casino market and difficulties in the Netherlands were key factors.
Commenting on the outlook, Catena anticipates further difficulties due to economic and political factors such as the war in Ukraine and rises in energy prices, particularly in Europe.
Daly stated: “The combined impact of the current spike in energy prices, inflation running at a level not seen for 30 years, and rising interest rates is difficult to measure but would be expected to affect entertainment spending over time.
“The implications for our business are difficult to forecast, but we continue to watch developments closely and stand ready to tailor our investment spend to market realities and the prevailing conditions in our key markets.”
Catena plans to invest ‘substantial sums in growth-oriented products across the group’, focusing on North America, the Asia-Pacific region, and Latin America, which it has identified as the fastest growing.
Although the group’s launch in Ontario was deemed ‘unspectacular’, Daly emphasized his confidence in the group’s North America position, expecting strong revenues once the NFL season begins in September.
The CEO concluded: “After our solid start to 2022 we are well-positioned for a busy year ahead and to keep delivering on our financial targets. We are investing strongly in personnel to prepare for future market launches and growth.
“Our people-focused culture and innovative strength equip us to continue capturing the outstanding opportunity in North America while remaining adaptable and responsive to market conditions at a global level.”