Catena Media has reiterated that its future focus is now on the North American sports betting and online casino markets, noting that the region offers ‘the best investment case’ in the current climate.
Reporting its Q4 of 2022 financial report, Catena declared total revenues of $29.2m, up 15% year-over-year. 78% of this turnover was sourced from North America and the region’s revenue grew by 31% YoY.
Catena takes 78% of revenue from North America
Placing an increased emphasis on the US and Canadian markets, Catena lauded the impact of several state launches during 2022 which helped to catapult revenue. Q4 saw the launch of Maryland’s online sports betting market which drove Q4 revenue increases.
CEO Michael Daly explained: “The final quarter of 2022 was strong for Catena Media as we recorded a 15% increase in revenue to EUR 27.4m, along with the growth of 14% in adjusted EBITDA from continuing operations.
“These figures reflected the further expansion of our core North American business, where revenue climbed 31% on the back of robust performance in Maryland, which legalized licensed online sports betting in November, a strong World Cup, and contributions from recently opened markets in New York, Louisiana, Ontario and Kansas.
“We also profited from a favorable run-up period prior to the launch of legal sports betting in Ohio on 1 January 2023.”
In particular, the Maryland launch, in Daly’s view, was a perfect time for regulation, given the proximity to Thanksgiving and a strong coinciding NFL schedule.
He noted: “Our teams made sure we hit the ground running for the player pre-registration phase as well as the go-live. Today, we have in place a well-oiled launch model with the agility and acumen to capitalize fully on legalization processes, drawing on our experiences from multiple state openings in the last three years in North America.”
Daly noted that, so far in 2023, Ohio’s launch has been the firm’s most successful launch ever, outperforming the first opening months of the New York market last year.
These results come off the back of a strategic review that saw Catena reduce its focus on the European market, culminating in the sale of AskGamblers and associated web assets to Gaming Innovation Group for around $47.9m in Q4.
On the strategic review, Daly noted: “The review process concluded in Q4 with the sale of AskGamblers and associated global casino brands to Gaming Innovation Group (GiG) for $47.9m. AskGamblers is a solid business with healthy margins. However, the accelerating trend towards market regulation led us to conclude that the brand, which partly addresses non-regulated grey markets, would enjoy better development prospects under new ownership.”
Though North America is increasingly becoming the priority market for Catena, management explained that, beyond Massachusetts, Vermont and Maine, there is little indication of further state launches this year, despite several loads of legislation in states such as Texas, Georgia and North Carolina all proposing sports betting.
More Q4 figures
Catena recorded a 1% increase in its new depositing customers in Q4 of 2022, totaling 84,651 and organic growth of 15% during the quarter.
The firm’s adjusted EBITDA from continuing operations jumped 14% to $13.1m at a margin of 45%, while the earnings per share from continuing operations totaling $0.04.
For the full year, revenues increased 7% to $117.2m, with North American revenue improving 24% to $89.9m, making up 77% of group revenue.
The firm’s adjusted EBITDA decreased by 16% YoY to $53.3m, with significant investment made in growing its presence in newly regulated US markets.
Daly explained: “Fully exploiting the high-margin opportunities on offer in this market will be our core operational focus going forward. The shift towards regulation in online sports betting and casino continues to gain momentum globally – and nowhere more so than in North America, where five new states and provinces legalized online sports betting in 2022, while Ontario also opened for online casino.”