Catena Media has released its preliminary third-quarter results, reporting strong growth in revenue and EBITDA that are driven by the company’s performance in the US.
North American Growth
Ahead of its interim report on November 17, 2021, Catena Media, an established online lead generator for the gaming industry, announced a third-quarter revenue estimate of €33.1 million ($38.6 million), a significant increase of 33% on the €24.9 million ($29 million) registered in the respective quarter in 2020.
Revenue from North American operations alone accounted for 51% of the group’s total in the quarter, posting a 124% rise year-over-year, mainly due to Catena Media’s expansion in the region by acquiring online sports affiliation Lineups in an all-cash deal valued at $39.6 million in May, and i15 Media in September in a $45 million cash plus stock deal.
Q3 was an exceptional quarter with September revenue breaking our monthly all-time high. This was the result of our strategic investment in organic development, particularly in North America, and was supported by two recent acquisitions in the United States and the opening of the iGaming market in Arizona.”
Michael Daly, CEO, Catena Media
Catena Media estimated organic growth in the third quarter would be at 23%. The percentage goes up to 34% when excluding the now-regulated German iGaming market, which accounted for 4% of the group’s total. The segment posted a 62% decrease compared to the respective three-month period in 2020.
Write-down of Assets
Third-quarter results would be negatively affected by a non-cash impairment of intangible assets which are deemed to be unable to generate cash flows, €49.4 million ($57.6 million), the bulk of which, €42.8 million ($49.9 million), resulting from a write-down pertaining to German sports assets Catena acquired between 2016 and 2018. The remaining €6.6 million ($7.7 million) would be a write-down associated with French sports assets the group acquired in 2018.
The impairment charge adjusts our European business to new market realities following a review by the management team and our focus on transforming the business to reach maximum potential.”
Michael Daly, CEO, Catena Media
The company explained that the write-down of assets would reflect an updated assessment of the assets’ future earnings in light of the recent regulatory changes implemented on Germany’s iGaming market. As part of Catena’s management regular practice, the assessment also considered overall market conditions in Germany, and while this write-down will not affect Catena’s cash flow, the company warned about the possibility of further adjustments to its amortization plans.
Catena Media estimated adjusted EBITDA excluding items affecting comparability to be €16 million ($18.6 million), an increase of 33% on adjusted EBITDA in the third quarter of 2020, and corresponding to a margin of 48%.