Catena blames Google update as it drops media partnerships and lowers estimates

Catena Media has announced it has lowered financial estimates for the rest of 2024 following the impacts of Google’s latest organic search policies.

The affiliate has adjusted its revenue for Q2 to be in the range now of €12.5m (£10.58m/$13.42m) to €13.5m and adjusted EBITDA of €500,000 to €1.5m. Catena Media also reiterated that it expects the quarter to bring a return of revenue growth.

Yet, Catena has decided to remove its full-year adjusted EBITDA forecast, having said that it is “no longer applicable”.

Media partnerships dropped

Media partnerships the company deems “lower-margin” will also not be renewed once each current deal ends. The partnerships are due to expire in Q2 and Q3 contain over €1.4m per quarter in minimum guarantees and are treated by Catena as direct costs. It hopes that letting the deals expire will set the company on a path to improve margins and revenue growth.

Catena blames the organic search policy update by Google in May for affecting the rankings of sports betting and casino published by traditional news sites. The update is expected to reduce revenue and also direct costs from the group’s media partnerships.

Yet, the affiliate also notes that it has observed an “offsetting effect” through some sites performing higher in traffic and organic search rankings with the Google update favouring high-quality relevant content.

Push towards healthier business

Pierre Cadena, Catena Media Interim CEO, commented: “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,” he added.

Cadena also highlighted that these changes along with the affiliate’s recent divestments will bring a healthier balance sheet. “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.”

Catena’s Q1 results highlighted across-the-board drops as it implemented new management and operation changes.

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