Gentoo Media reports that its revenue for the first quarter of 2025 fell by 11% year-over-year, dropping to 24.8 million euros ($27.8 million).
The decline was primarily due to regulatory chaos in Brazil, as well as the company's deliberate move away from lower-margin business activities following its exit from the platform and sports betting sectors.
EBITDA before special items fell 39% to 8.2 million euros, as the group's EBITDA margin sharply narrowed from 48% to 33%.
Gentoo's net cash flow was also impacted by 22.5 million euros in deferred acquisition payments and spin-off related expenses.
CEO Jonas Warrer stated, "The first quarter was a transformative and necessary period. We faced external pressures and, after careful consideration, prepared for the future development of Gentoo Media. Ultimately, the company is more focused, with a clear growth strategy and a leadership team to execute it. We now move forward with confidence, committed to creating long-term value for players, partners, and shareholders."
The restructuring included reducing low-yield businesses and appointing key leadership, including a new CFO.
Despite weak performance in the first quarter, Gentoo reiterated its outlook for 2025, expecting profitability to recover in the second half of the year and revenues to stabilize again.
The company forecasts that annual revenue will remain roughly flat compared to 2024, with EBITDA margins expected to rebound to between 40-45%.
This performance comes after Gentoo Media set a record in 2024, with annual revenue of 124.5 million euros, up 41%, and an EBITDA margin of 45% for the year.
In just the fourth quarter of 2024 alone, revenue grew by 38% to 35.9 million euros, marking Gentoo's 16th consecutive quarter of growth and highlighting the early success of its affiliate-centric business model.
