Catena Media has released its second-quarter update, noting that preliminary results for May-June were negatively impacted by changes in Google's organic search policy, which impacted its financial forecast for the quarter.
Changes made by Google to its organic search policy were linked to site reputation abuse, which, according to Catena, had a knock-on effect that resulted in some of its strategic media partnerships not performing as well as the group had hoped. This led Catena to issue a quarterly forecast update, with revenue expectations now falling to €12.5 million to €13.5 million ($13.3 million to $14.4 million) and adjusted EBITDA to €0.5 million to €1.5 million.
While the company said the financial impact of the affected media partnerships cannot be quantified into exact numbers, previous full-year EBITDA forecasts can now be viewed as inaccurate. Despite the setback, Catena remains confident of revenue growth in the second half of 2024.
Pierre Cadena, interim CEO of Catena Media, commented on the news: "Catena Media is adopting a new product-focused operating model as part of our efforts to rebuild the company as a healthy business. We believe this is the The right moves in the strategy, and we still expect the company to return to sustainable growth and achieve high-margin operations starting in the second half of 2024."
"These changes, combined with proceeds from our recent divestitures, will leave us with a healthier balance sheet. This provides us with greater financial flexibility, strengthens our ability to repay our senior notes next year, and gives us confidence in managing the business' debt burden."
Rising revenue is a welcome sight for Catena shareholders, as the group's Q4 2023 and Q1 2024 results showed revenue declines of 41% and 49% respectively.
However, the appointment of Michael Gerrow as the new CFO and Manuel Stan as the new CEO means Catena is trying to turn things around and enter a new phase.
