Catena Media plc

Welcome to the Katina Media Q1 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Manuel Stan and CFO Michael Gero. Please go ahead.

Good morning. Good evening, everyone. Welcome to Catena Media's Q1 Interim Report. I am Aron Stan, and today I am joined by our Chief Financial Officer, Lime Giroux. Today, we will be speaking to our Q1 Interim Report, related financials, and our strategy and outlook going forward. We will start today's presentation with a high-level summary of the most important developments in the board. I am pleased to see another solid quarter with strong revenue and, more importantly, continued efficiencies translating into a strong bottom line. Q1 revenue amounted to €12.3 million. This represents an improvement of 26% versus the same period last year and 21% down versus last quarter. While this is a decline from a very strong Q4, it is a significant step up from Q1 previous year. The adjusted EBITDA almost tripled 2.7 million euros from 0.9 million euros the corresponding quarter last year. This meant lifting the margin to 22% up from 9% the same period last year. This was our third consecutive quarter. over 20%. We continue to focus on operational efficiency and diversification. The diversification efforts continued, and performance marketing channels showed another strong closer, albeit a step down from the old-time high registered in Q4. Our disciplined cost management approach continued in Q1. Normalized for direct cost and incentive programs, the year-on-year comparable costs have decreased with 26%. From a geographical perspective, the share of revenue coming from North America remains relatively unchanged at 95%, reflecting our focus on this geography. While we continue to evaluate other geographies, North America remains our core focus for the immediate future. New depositing customers increased by 88% year-on-year to 34,573 customers. Overall, even though we saw decline from the first 24, we are pleased with the performance this quarter and remain confident in our trajectory. Moving on to operational development. Performance marketing channels remain a very strong area for us, as we see solid performance on all different channels. To further accelerate the success of the CRM channel, in early January we launched Play First, our first group-wide loyalty initiative designed to improve user engagement and loyalty. We have plans to expand such products to other products in the coming quarters. In January, we have also announced the launch of Marketplace Plus. This is a strategic evolution of our sub-affiliate platform, offering tailored marketing support, advisory services, and potential working capital solutions to sub-affiliate partners. From that perspective, we continue to invest in our central platform and continue the consolidation of our top tier products. The employee metamotor score reported the highest level since June 2022, having improved over 60 points in the last 12 months. OrganicSearch faced headwinds post-algo update, and we will discuss in more detail on the following slide. Moving on to the OrganicSearch score. As mentioned, the organic search performance saw some post-December LGL days. The performance is mostly stabilized in the second half of the quarter. As you can see in the graph, the average fewer ranking score for the quarter decreased slightly in the first part of the quarter, but since then stabilized. It is worth noting that the algorithm changes have temporarily elevated some low relevance products that provide little user value. We expect Google's continuous quality focus refinement to correct this over time. I will now hand over to Mike for an in-depth update on our financial performance. Thank you, Mario, and good day. Looking into our Q1 financials, Q1 shows solid growth compared to last year, but with some way below our particularly strong results in Q4. Q1 revenue was €12.3 million, representing a 26% year-on-year increase and a 21% quarter-on-quarter decrease. Adjusted to foreign exchange rate fluctuations, year-on-year revenue was up 41%. North America contributed 95% of group revenue in the quarter. Adjusted EBITDA was €2.7 million during the quarter. This is a 43% decrease when compared to the very strong Q4 2025 and a 191% increase versus Q1 2025. This quarter's performance represents a more sustainable baseline for us to continue building on in future quarters. New deposit and customers increased 58% year-on-year, driven by stronger contributions from our core brands and from the growth of fellow affiliate partners on our marketplace platform. Moving on to our segment performance, in June 1, 2026, our casino segment contributed 88% of revenue, with the sports segment contributing 12%. Casino revenues grew by 43% versus Q1 2025. This growth was spread across regulators and three state casino operators. Casino NDCs increased by 98% versus Q1 2025 and decreased by 19% versus Q4 2025. Adjusted EBITDA and casino segments increased by 12% versus Q1 2025 and decreased by 45% versus Q4 2025. This reflects the year-on-year success of our efforts to diversify revenue sources to include a greater share of paid marketing channels, including self-affiliation. Fourth segment revenues decreased by 34% versus last year's 1.5 million euros. This reflects continued underperformance, but also the divestment of our e-force products in late June 2, 2025. New deposit rate customers decreased by 17% versus June 1, 2025, but increased by 15% versus June 4, 2025. Adjusting to the done force grew significantly versus last year's losses to a satisfactory 30% margin. The growth in adjusted EBITDA is primarily related to the delivery of our cost optimization measures. Continuing on to our cost development, the total cost base was €9.7 million in the quarter. This represents a year-on-year increase of 8% and a quarter-on-quarter decrease of 11%. Direct costs increased by 110% versus Q1 2025. This reflects our progress in diversifying revenue to include a larger mix of performance marketing channels, including Haiti Media, CRM, and self-affiliation versus last year. Direct costs decreased by 22% versus Q4 2025. Including the increase in revenue-driven direct costs, the cost base decreased by 15% versus Q1 2025. Personnel expenses decreased by 18% versus Q1 2025 and decreased by 2% versus Q4 2025. But it's important to note that if we normalize personnel expenses to include 800,000 euros of bonus accruals taken in Q1 2026, basic personnel expenses decreased by 32% versus Q1 2025. We included a gray section in the chart separating incentive program accrual versus the continued decrease of fixed-cost personnel expenses over the quarters. Other operating expenses decreased by 12% versus Q1 2025 and decreased by 11% versus Q4 2025. Normalizing the cost base for direct costs and incentive programs, the year-on-year comparable costs has decreased by 26%. During the quarter, we started implementing an administrative streamlining program that will yield simplification of our legal structures and liquidation of entities outside of Malta and the U.S. We recognized some 100,000 euros as items affecting comparability during the quarter, which were primarily related to this program. Moving on to our financial position. Total operating cash flow for continuing operations was €4.4 million in the quarter, increasing from €3.2 million in June 1, 2025. Our resulting cash-to-cash equivalence balance at the end of March was €13.7 million. We do not have any remaining debt instruments after the repayment of our senior bond in Q2 2025. But our hybrid capital securities, with a nominal value of 44 million euros, have interest costs of approximately 1.4 million euros per quarter. We have deferred interest payments since July 2025, and the accumulated interest now totals 5.4 million euros as of April 10, 2026. We expect to continue deferring interest payments from hybrid capital securities in order to maximize flexibility for effective capital allocation, including creating skills for investment that support strategic opportunities and revenue growth. 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 quarter. As we have presented over the last quarter, our strategy is based on a three-filler model focused on people, products, and products. From people's perspective, the most important developments in the recent period included the employee net promoter score recorded the highest level since June 2022, having improved over 50 points in the last 12 months. The Return to Office program, initiated in early October, is now fully implemented across both our European and North American offices. And the first content-wide bonus, paid in several years, awarded following the partial achievement of the annual performance review. From a product perspective, some of the key developments included the continuation of the diversification effort, The performance marketing channel showed another strong quarter, albeit a step down from the open high before. PlayCurse loyalty program was launched on PlayUSA.com in mid-January, aiming to improve user engagement and loyalty, user-wise. This is planned to be extended to other brands in the near future. Marketplace Plus launched in January, expanding Publisher Program Framework with marketing support, advisory services, and potential investment opportunities. And continuing investments in our central platform, as majority of our top tier products are now consolidated on a single platform. Our third and last strategic pillar is Process. The adjusted EBITDA margin remains strong at over 20% for the third consecutive quarter. Normalized for direct costs and incentive programs, the year-on-year comparable costs have decreased by 26%. Direct costs saw a drop in Q1 as a result of the decrease in performance marketing channels. €0.8 million accrued for short-term incentive programs demonstrated the company's confidence in reaching the annual target. Moving on to the market phases. The era of rapid sports and casino launches is largely behind us. The Q2 2022 Ontario Sports and Casino Launch was the last combined market to launch in North America. That represents a gap of over four years. Alberta is scheduled to launch online casino and sports betting on July 13th of this year. That is the first combined sports and casino launch in Ontario. With the addition of Alberta, the share of U.S. and Canada population living in a regulated sports-backing state or province is 51%, while for Latino the share is 70%. This represents a great opportunity in the market. Prediction markets have emerged as a strong alternative in the sports vertical accessible nationwide. Lastly, let us recap the key takeaways from our report. Revenue was up 26% year-on-year and down 21% quarter-on-quarter. While this represented a decline from a very strong Q4, it was a significant step up from Q1 previous year. Adjusted EBITDA almost tripled to 2.7 million euros, lifting the margin to 22%, up from 9%. third consecutive quarter with adjusted EBITDA margin over 20%. Organic third performance, softened on December 11th. The performance has not been stabilized in the second half of the quarter. Revenue diversification efforts continue during the quarter. A key event was the launch of Play First on playusa.com, our first ever loyalty program. This is planned to be expanded on other grants in the future. Since announcing the launch of Marketplace Plus, we have built a strong pipeline of opportunities that are currently being reviewed. We expect to begin deploying capital in the near future. The April 2026 hybrid interest payment was deferred, bringing the accumulated deferred interest costs and interest to 5.4 million euros. Interest payments are likely to remain deferred as capital is directed at strategic buyers. While Q1 showed a decline from a very strong Q4, we are pleased with a year-on-year trajectory and with another efficient border with a projected EVR volume over 20%. Thank you very much for listening. I will now hand over to Mark to move on to the QA section of our call and open up for questions. Thank you, Manu. We'll now open it up for questions from anyone on the line.

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