Catena Media, the affiliate marketing company, has reported preliminary financial results for the first quarter of 2025 showing a significant decline in revenue and profitability. In response to this performance, the company is implementing substantial cost optimisation measures, including a 25% reduction in its workforce and the suspension of interest payments on its hybrid capital security.

For the first quarter ending March 31, 2025, Catena Media reported preliminary revenue of €9.8 million. This figure represents a 3.9% decrease compared to Q4 2024 (€10.2 million) and a significant 38.8% drop when compared to the €16.0 million reported in Q1 2024. The company’s profitability also saw a sharp decline, with Adjusted EBITDA falling to €0.9 million. This marks a 52.6% drop compared to Q1 2024 and a 40% decrease from the previous quarter. Consequently, the company’s adjusted EBITDA margin declined to 9% from 15% in Q4 2024. Revenue from North America reached €8.8 million, a slight dip from €8.9 million in the prior quarter. Catena Media attributed the squeeze on its margins to a greater share of revenue originating from lower-margin sub-affiliation activities and a modest increase in personnel costs.

Cost Optimisation Measures Implemented

In response to the decline in financial performance, Catena Media is implementing significant cost optimisation measures. These include a 25% reduction in its workforce, which will affect over 50 roles encompassing both contractors and full-time employees. The company also plans to remove a layer of management in an effort to streamline decision-making processes. These steps are expected to deliver annualised savings of approximately €4.5 million to €5 million. Furthermore, additional technical consolidation changes are underway and are projected to reduce costs by a further €0.8 million annually.

Decision on Hybrid Capital Security

Alongside the announcement of its Q1 results, Catena Media also made a decision regarding its hybrid capital security. The company stated that it will defer interest payments on this security “until further notice” and does not plan to redeem the instrument in the near term. This decision, as reported by iGaming Times, is part of a broader strategy to ease financial pressures on the company. As noted by chairman Erik Flinck, as reported by iGaming Times, the decision was difficult but deemed essential to “secure the group’s financial stability” and “enable investment in development and growth.” The company added that further “financial-structure optimisation” is needed to create room for future tech-facing investments.

Management Commentary and Outlook

Catena Media’s CEO, Manuel Stan, commented on the results and the company’s path forward. As reported by iGaming Times, Stan stated that the Q1 results indicate that Catena Media still has “substantial work ahead to fully stabilise the business and rebuild profitability.” He emphasised, as reported by iGaming Times, that it is “vital that we protect margins” and expressed confidence that the strong actions being taken will lead to costs decreasing in both absolute and relative terms in the coming quarters. Despite the challenging results, Stan also noted, as reported by iGaming Times, that revenue had stabilised compared to previous quarters, suggesting that the “steep declines of past quarters may now be behind us.” This assessment contrasts with a statement made by Stan in November 2024 (as reported by iGaming Times from the Q3 2024 earnings call) where he had ruled out further layoffs, expressing confidence in the structure then in place.

In conclusion, Catena Media’s preliminary Q1 2025 results reflect significant financial challenges, marked by a sharp decline in both revenue and profitability. This performance has prompted the company to implement drastic cost-cutting measures, including a substantial workforce reduction and the suspension of interest payments on its hybrid capital security. The company is currently focused on stabilising the business, rebuilding profitability, and managing its financial structure amidst a challenging and evolving market landscape. Catena Media stated it will provide regular market updates on the hybrid capital instrument and its broader financial progress.