Catena Media plc

Thank you, Manu, and good day. Looking into our Q3 financials.

Q3 was a strong quarter. Revenue was EUR 11.6 million, representing a 9% increase year-on-year and a 22% quarter-on-quarter increase.

Adjusted for foreign exchange rate fluctuations, year-on-year revenue was up 15%. This represents our first year-on-year revenue growth since Q1 of 2022.

Adjusted EBITDA was EUR 2.9 million, an increase of 119% in the same period previous year and a 12 percentage point increase in margin. Adjusted EBITDA increased 112% versus Q2 2025.

The quarter-on-quarter and year-on-year EBITDA growth was an encouraging step-up driven by both revenue growth and our cost optimization program implemented in recent quarters. NDCs decreased 12% year-on-year, driven by lower sports performance and shift towards casino revenue.

North America contributed 96% of group revenue, up from the 89% in the previous year. Please note that given the decreased contribution of products outside North America, we've reduced our focus on the geographical reports going forward.

The sustained underperformance in legacy Rest of World casino assets and our North American sports [indiscernible], a [ $16.5 million ] impairment loss recorded during the quarter. Moving on to our segment performance.

In Q3, our Casino segment contributed 85% of revenue with sports contributing 15%. I am pleased to see that our Casino revenues grew by 20% versus Q3 2024 and by 26% versus Q2 2025.

This growth came from both improvements in our soft tier products and positive developments in our diversification efforts to grow paid media, CRM and sub-affiliate channels as noted by the increase in direct costs. Casino NDCs increased by 1% versus Q3 2024 and by 23% versus Q2 2025.

Adjusted EBITDA in our Casino segment decreased by 4% versus Q3 2024 and increased by 82% versus Q2 2025. The year-on-year decrease is mostly [indiscernible] portion of our shared costs to the now much larger casino business as well as FX fluctuations and our efforts to diversify our revenue streams to lower-margin sources, including CRM, paid media and sub-affiliation.

Our sports revenue decreased 28% versus last year to EUR 1.8 million. There was a marginal 2% increase versus Q2 2025.

The slight quarter-on-quarter growth is mostly attributed to seasonality. However, the overall performance in our owned and operated sports brands remained unsatisfactory and will require more time to turn around as we continue to invest in our core sports products to improve long-term competitiveness.

New depositing customers decreased by 40% versus Q3 2024, but increased by 5% versus Q2 2025, again, due to the regular sports seasonality. Adjusted EBITDA in sports grew significantly versus last year's losses and our breakeven results in Q2 2025 to a healthy 25% margin.

The growth in adjusted EBITDA is primarily related to the delivery of our cost optimization measures. Please note that the Sports segment loss in Q3 2024 was also partially attributed to the remaining media partnerships that were operating at a loss for part of the quarter.

Continuing on to our cost development. We decreased our cost base by 6.9% versus Q3 2024 with a slight increase versus Q2 2025, driven by our increasing direct costs.

Our direct costs increased by 145% versus Q3 2024 and by 50% versus Q2 2025. This reflects our positive momentum in diversifying our revenue to include a larger mix of performance marketing channels, including paid media, CRM and sub-affiliation.

In line with our communicated cost optimization program, our personnel expenses decreased by 39% versus Q3 2024 and decreased by 8% versus Q2 2025. And other operating expenses decreased by 27% versus Q3 2024 and 21% versus Q2 2025, mainly due to optimized SEO activities and lower professional fees and IT support costs.

Total items affecting comparability were EUR 200,000 in the quarter. This was primarily related to movement associated with divestment of minor assets and an adjustment of H1 2025 revenues due to invalid player activity.

Moving on to our financial position. Total operating cash flow from continuing operations was EUR 2.1 million in the quarter, increasing from EUR 1.8 million in Q3 2024.

Our resulting cash and cash equivalents balance at the end of September was EUR 8.4 million. We do not have any remaining debt instruments, but our hybrid capital security with a nominal value of EUR 44 million has interest costs of approximately EUR 1.4 million per quarter.

As mentioned in the press release before the Q1 report, we do not intend to redeem the hybrid capital security in the short term, and we have deferred making interest payments on this instrument. So far, we have deferred the July and October 2025 interest payments, and the accumulated deferred interest now totals EUR 2.5 million.

Following our annual asset value review, we have recognized an impairment of our North American sports assets of EUR 10.5 million and our Asia Pacific casino assets of EUR 6 million. This is a noncash affecting impairment, reflecting the poor performance in these areas over the past number of quarters.

I will now hand back over to Manu to give us an update on the strategy and outlook.

Thank you, Mike. We will now have a look into the strategy and outlook for the next quarters.

Status quo in terms of new marketing openings. Overall, market penetration remains at approximately 50% for online sports betting and only 16% for online casino, indicating a remaining sizable future opportunity.

As Missouri is approaching the December 1 go-live date, our teams are working diligently to prepare the launch. While this is the first launch of a legalized online sports betting market in the U.S.

since North Carolina in Q1 of last year, due to the specific nature of Missouri, i.e., the 19th largest U.S. state by population surrounded by legal sports betting in 6 out of the 8 neighboring states, we expect the revenue uplift to be moderate.

Alberta's iGaming bill was approved in May 2025, and the province is expected to go live at some time in 2026. There is no concrete launch date at this time.

Alberta will follow a model similar to Ontario, including both online sports betting and online casino. Moving on to the strategic focus areas.

As laid out in the previous reports, our 2025 strategy is focused on 3 key pillars: people, product and profit. From people perspective, the key initiatives in the recent periods included rightsizing the organization by eliminating more than 50 roles in Q2.

Q3 was the first quarter where the full financial effect of this action and resulted in a year-on-year personnel cost reduction of 39%. The implementation of OKRs was partly delayed during -- due to the Q2 layoffs and was fully rolled out throughout the organization during Q3, ensuring alignment and accountability.

The hubs build-out continued in Q3 with no roles being advertised or hired outside our 2 hub locations. And in early October, we rolled out the return-to-work initiative in our Malta HQ that will be also implemented in our Miami North American hub in early 2026.

From a product perspective, the key initiatives included performance marketing verticals, paid media, CRM and sub-affiliates continue to grow their share of revenues for the company. This contributed to the revenue mix diversification and also equally important, helped offset the SEO reliance.

The launch of Marketplace during the quarter showed strong interest from prospective sub-affiliates, and we are well positioned to grow this area further in the coming quarters. The ongoing tech consolidation work includes bringing all our product to a central platform.

The top-tier products that have benefited from this work during the quarter have shown encouraging performance improvements. Our third and last strategic pillar is profit.

We are pleased to see the outcome of our efforts on both revenues as well as costs, as our adjusted EBITDA margin almost doubled from previous quarter and corresponding quarter previous year, up to 25%. Direct costs are expected to trend slightly upwards as our performance marketing channels continue to grow and the cost will follow directly.

The remaining cost base is unlikely to see any significant movement in the near term as we expect to see a relatively flat -- we expect it to stay relatively flat moving forward. Lastly, let us recap the key takeaways from our report.

Revenue was up 9% year-on-year, 15% when adjusted for our primary currency USD, showing positive signs of operational stabilization. Adjusted EBITDA margin almost doubled to 25%, driven by both increased revenues as well as the cost optimization initiatives.

Q3 had the full impact of our cost optimization measures, and we expect the personnel and other operating expenses to remain relatively flat in the near future. Our core search channel has seen good development during the quarter reaching the best average position for our top 100 keywords in the last 6 months.

The focus on revenue diversification paid dividends during the quarter with all our performance marketing channels, paid media, sub-aff and CRM showing good progress. The launch of the next-generation sub-affiliate platform, Marketplace, represents a great opportunity to develop this vertical even further in the next quarters.

While the performance in Q3 was a welcome step, positive step forward, we remain cautious for the future quarters due to the potential headwinds, both by social sweepstakes casino regulatory pressures and the impact of generative search trends. We have deferred the July and October 2025 hybrid interest payments and have accumulated deferred interest, and our accumulated deferred interest now totals EUR 2.5 million.

Thank you very much for listening. I will now hand over back to Mike to move on to the Q&A section of our call and open up for questions.

Thank you, Manu. I'll open up for questions now.

[Operator Instructions] All right. I have a question coming in from Pontus.

I'll let him in now.

Great stuff, seeing some double-digit growth, very exciting. I just wanted to know on sub-affiliation, you mentioned it's best in class.

What should we look at in terms of metrics to back that up and so to say, and [ performance ]? And what is the ambition would you say of that vertical, given it's kind of slightly lower gross margin?

If you can -- I know it's early days, but given your kind of talking about it as a very good product in the market, can you tell us anything about that?

Pontus, I'll take a first stab and Mike, if you want to fill in the gaps, please do. I think one interesting anecdote is that, obviously, as a marketplace between operators and sub-affiliates, we have to earn the trust of both sides.

And it happens relatively frequent that we actually get recommended by operators in North America to sub-affiliates to work as a partner bridging that partnership between operators and sub-affiliates. That is a great testament that we have built a trust to operators by being a great partner when it comes to doing the proper due diligence, being transparent and being a helpful part in that whole journey.

When it comes to us saying that it's a best-in-class, I think from any perspective, you're looking at the platform, again, you're looking at the functionalities, you're looking at speed, you're looking at user experience, you're looking at a transparency. We built that platform with the idea of making it a marketplace where eventually operators and sub-affiliates can come and self-serve directly as much as possible, making that process as automated and as smooth as possible.

So I don't think we have any -- well, we don't -- I'm sure we don't have any third-party opinions or user research to say particular on this criteria as the best-in-class. But subjectively speaking, when we're comparing the platform with whatever else we see out there in the market and knowing what we try to achieve, and we managed to achieve when we launch this, we're confident to say that from our perspective, this is a best-in-class platform.

Okay. And the ambitions there, would you say it's a complement?

Or is it potentially a kind of substantial business in a few years? Or how do you see it when you -- it's hard for us, I think to -- it's kind of a new effort for most players.

It's interesting to hear your views on it, but maybe it's too early to kind of point to that.

I think I can answer the first part for sure. I think it's complementing our business.

It's not replacing our current -- our existing business model. We remain a media company, and we -- our first and most important focus is to grow our owned and operated product and brand.

But this is a very nice way to complement that and to diversify our revenue streams to make sure that we're well protected against anything that may change the landscape. I think, obviously, you have the direct costs in the report, and you can make an estimation of how much this is growing quarter-on-quarter, and you can understand that it's becoming a relatively important revenue stream and a focus area for us going forward.

But I do see it in the short, medium term, at least for sure that it is a complementary business to our core owned and operated brands.

Okay. Good.

Just a quick one on the potential impact of prediction markets. Could you say anything about that?

Like is it positive or negative or no impact to go -- because there's so much noise going on there and a lot of kind of revenues going there. So can you just comment on that?

Yes, of course. Thank you, Pontus.

So far, we have not disclosed any particular revenues coming from this subsegment per se. We have launched our activities on different products or different brands and trying to work with the top operators in the production market space.

I think it will continue to grow, and we will continue to invest in this. So related to what are the strategies for 2026, prediction market is definitely one of the areas where we want to continue to invest, and we want to grow.

We see that as a good opportunity. I think there are key unit economics to take into account.

The CPA for prediction market is substantially lower than sportsbook or than the casino verticals in general, which means that it's more a play of volume rather than seeing the same revenue per customer that we see in other verticals. But our products are well positioned to tap into this market.

And as I said, I think it will be one vertical where we'll continue to invest into the rest of 2025, but also 2026.

And I think I'll add a little point -- I'll add a little clarification there as well for you, Pontus, which is that we report any revenue that comes in through the prediction market at this stage through our sports segment. So as a portion of that, as you can tell, with an 85% split on casino versus sports, it's a portion of the smaller portion of our revenue base at the moment.

Thank you. I think that's all the questions we have on the line.

So I have a few questions that are -- came in from written format. So I'll start asking a couple of those towards you now, Manu, if that's all right.

So the first question, probably generic is, just are you satisfied with the performance in Q3?

Thanks, Mike. I think, absolutely, there is no way to go around it, both from revenue as well as cost perspective or adjusted EBITDA perspective, we have seen growth in the quarter.

The revenue -- the most pleasing thing for me to see is that the revenue came from a variety of initiatives. It was not just based on diversification or based on strength in rankings, but it came from all over the place.

It came from our continuous improvement in Google rankings throughout the quarter. It came from the diversification of our revenues.

It came from sub-affiliates as well as CRM. So we've seen really nice development there.

And then, as you pointed out in your part of the presentation, Mike, we have seen the first year-on-year growth since Q1 2022. So that's the first year-on-year after 14 quarters of relative struggles, I guess, for us as a company.

So seeing the revenue increasing year-on-year as well as quarter-on-quarter is fantastic. And again, looking at the FX, removing the FX from calculation on a year-on-year growth, we're looking at the 15%.

Secondly, we've done this while putting the business in a stronger operational place with a lower cost base than we had last year. So that's also great to see and that added to having a pretty healthy EBITDA -- adjusted EBITDA margin at 25%, as we said, pretty much doubled from previous quarter in 2024 as well as Q2 2025.

So all in all, I think good development across the entire P&L. That being said, realistically speaking, we appreciate the pressures that are coming from sweepstakes.

We appreciate how the impact of California then will play in the short term, but also throughout 2026, how that impact may have additional effect in other states and how that will impact our business. We appreciate the challenges coming from the zero click and generative search threats.

So we do have a reasonable amount of headwinds in front of us, and we have to be able to navigate that and continue to strengthen our position. But talking about Q3, I think, overall, I am pleased to see the progress that our teams have made.

All right. Thanks, Manu.

Kind of related to a question Pontus asked, but I guess I'll ask that. But what is -- what initiatives do you have ongoing to reduce the dependency on Google Search?

Yes. I think, first and most importantly, we've talked about diversification for a few quarters now.

And we talked about the investments we're making into CRM. We talked about the investments we've made into building our Marketplace platform.

We've talked about us investing more in paid media. So that's definitely one of the key focus areas for us in to reducing the dependency on Google Search.

Secondly, I think very important for us, we're investing into customer engagement initiatives. Those include stuff as loyalty programs, gamification, product features and so on.

Those are all a part of our wider strategic shift towards building brands and products that emphasize on customer added value and loyalty. So instead of putting all our force into acquiring new customers, we do realize that we have an equally strong opportunity to retain the customers, to engage with the customers and build our own communities and build the loyalty towards our brands and be in a much better position to extract value from those customers in a longer period of time.

Thanks, Manu. And one more for you, which is that the direct costs grew noticeably during the quarter.

Why is this? And is it a concern from a margin perspective?

Absolutely. Thanks, Mike.

I think this is pretty much related to Pontus question about sub-affiliation. And obviously, as this grows for us, as the share of the revenues coming from sub-affiliate platform grows for us as a company, so will the direct cost.

So on the positive, this is obviously a cost that's proportional to the revenues. It's a performance-driven costs, so we're pleased to see the development.

But we equally appreciate that it's a lower margin than the rest of the business. I think all in all, I am happy to see this keep on growing.

And the more we grow, the more it benefits us on the bottom line also. And I think it's a scalable platform, and it's a scalable part of the business that should not have any ceiling, and we should be happy to see it growing even further.

All right. We actually have, I think, a clarification question coming in from Pontus again, so I'll activate him and let him ask a follow-up here.

Sure.

Sorry, to -- but I had a more -- one more question. You mentioned this Rest of the World assets basically.

Some are now written down historically, and you're also very much a U.S. business at the moment.

Would you say -- I guess, you still have these assets? Could we see like a selling or total closing of the Asia and European pages?

Or doesn't it work like that? Or is that something you just kind of run in the background?

Can you just explain what that will be in the future?

Thanks, Pontus. So I think we're talking about some European assets and some assets that are targeting Lat Am, some assets that are targeting Southeast Asia.

Overall, we do not see these assets performing as there -- as we would like them to perform. So over the last few quarters, one of our key initiatives that we talked about was reducing our focus when it comes to products, when it comes to brands, when it comes to geographical assets.

So a lot of these products did not get the much-needed love for them to continue to perform. But going forward, for us, as we're trying to make sure that our organization is well set up and we're doing the right things for North America, we may try to duplicate some of those things in other geographies or on other products.

But that is a secondary thought once we're confident that doing the right things for North America. I don't see in the near future any sizable effect of those.

I don't think that we will spend significant time resources, investments outside North America, at least in the near future. That being said, for the long run, we still have a number of assets that can become at some point -- at the right time, they can become valuable for us.

We did divest over the last few quarters, a few smaller assets for different geographies. And that remains part of our ongoing strategy.

But I don't think that we have anything big there that it should be a game changer either as a divestment cash coming in, either as operational generating significant revenue stream. Mike, if there's anything you want to add on top of that, please do.

No, I'd say that's about right with it representing 4% of our revenue in the most recent quarter is not an area of focus, but at the same time, we would only look at divestments if they make sense, if it's still financially viable products, it makes sense to operate them even at only 4% of our current revenue base. All right.

Thank you again, Pontus. Just a couple of more questions, which came in or more kind of focused in my area.

So I'll ask those and answer those, which is regarding the deferred hybrid capital security interest payments, are there any plans to resume payments soon? And should investors be concerned for the future?

So the short answer on that is no. According to the terms of the hybrids, we're allowed to defer the payments indefinitely, and there's no kind of default risk or anything like that towards shareholders.

So I just want to make that one very clear. Our role from a cash planning perspective is to try to sustain recent growth in the healthy cash generation before making any further decisions on our capital structure.

That includes any resumption of the hybrid interest payments. Building up the cash by deferring the payments, it gives us flexibility.

And flexibility is important when it comes to seeing whether we should invest more tech-facing investments, strategic initiatives, and also lets us adapt as the market does change quite rapidly that we work in. And then another question that I had was that the margins have improved significantly since Q2.

And can these levels be maintained going forward? And on that one, I'll say that Manu already spoke a little bit to the fact that we're trying to keep our cost base relatively flat with the exception of the direct costs, which follow the revenue streams.

But overall, we're cautiously optimistic that the margins can be maintained. The improved margins reflect both the revenue growth and also the cost discipline that we've put in place.

But this is only one quarter of improved results. So we need to sustain this, knowing that there are headwinds that are coming forward in the next quarter as we talked about the increased regulatory pressure on social sweepstakes, casinos.

We talked about the fact that generative search is definitely highly impact across affiliation, not specific to iGaming. So we know those are in front of us, so we need to make sure that we can withstand [ those ].

The other thing is that quarterly revenue and the cost variations are always possible, but the business is now operating from a much stronger base with a more efficient structure. So I don't see significant variance coming in unless there's an adverse revenue item that happens, with one potential exception that the current cost structure could change a little bit just based on the fact that we haven't had any performance-based incentive programs that have been very, very minimal in the recent years.

So that's one area that could potentially bring that up. And that's all the questions that we have that have come in today.

So I guess I'll hand it back over to you, Manu, and you can handle the closing remarks.

Thanks, Mike. We'll wrap up today's call with some quick closing remarks.

Revenue was up 9% year-on-year, 15% when adjusted for our primary currency USD, showing positive signs of operational stabilization. This represents our first year-on-year revenue growth since Q1 2022.

Adjusted EBITDA margin almost doubled to 25%, driven by both increased revenues as well as the cost optimization initiatives. Q3 had the full impact of our cost optimization measures, and we expect the personnel and other operating expenses to remain relatively flat in the near future.

Our core sales channel has seen good development during the quarter, recording a 6-month high performance. The focus on revenue diversification paid dividends during the quarter with all our performance marketing channels showing good progress.

That being said, while the performance in Q3 was a welcome positive step forward, we remain cautious for the future quarters due to the potential headwinds posed by social sweepstakes casino regulatory pressures and the impact of generative search trends. We have deferred the July and October 2025 hybrid interest payments, and the accumulated deferred interest now totals EUR 2.5 million.

Thank you all for joining today's call. Thank you for the questions.

And looking forward to hosting you for the year-end Q4 report on 10th of February 2026. Thank you very much.