XLMedia has unveiled its full-year 2023 financial results, reflecting a transformative period marked by significant asset sales and strategic refocusing. The company, known for its affiliate marketing services in the sports betting and gaming sectors, reported a considerable decline in revenue following the sale of its European and Canadian sports betting and gaming assets to Gambling.com in March 2023.

XLMedia Reports 2023 Financial Results

Financial Performance Highlights

Revenue Decline: XLMedia’s total revenue for 2023 fell by 29% to $50.3 million, a sharp drop from the $70.9 million recorded in 2022. This decline was felt across nearly all segments of the business.

• North America: The most notable regional decline was in North America, where revenue plummeted by 42%.
• Europe: European revenue saw a minor decrease of 2%.
• Segment Specifics: The largest individual drop was in North American gaming, with revenue falling 54% to $0.6 million. Conversely, the only segment that saw growth was European sports, which increased by 9% to $9.7 million.

Profit and Loss: Gross profit took a significant hit, decreasing by 26% to $26.6 million. The company recorded a statutory loss of $45.5 million, a stark contrast to the statutory profit of $3.4 million in 2022.

EBITDA: Adjusted EBITDA also saw a decline, dropping 36% to $12.1 million compared to the previous year.

Strategic Focus and Future Outlook

CEO’s Vision: XLMedia CEO David King emphasized the company’s strategic shift following the asset sale. “Following the announcement of the sale of the Europe Sports and Gaming business on 1 April 2024, we are focused on driving organic revenues in the North America market. We are preparing for new state launches and right-sizing the group’s cost base for 2025,” King stated.

Chair’s Remarks: XLMedia Chair Marcus Rich highlighted the financial strategy behind the asset sales. “We are delighted to have realized value for shareholders from the sale of the Group’s Europe and Canada assets. This sale has provided cash to clear legacy liabilities and bolster working capital for the North America business. We anticipate an initial return of capital to shareholders from sale proceeds in quarter four 2024,” Rich noted.

Impact of Asset Sales

The sale of the European and Canadian assets is a pivotal move for XLMedia. It allows the company to streamline its operations and concentrate on the burgeoning North American market. This strategic pivot is expected to facilitate better resource allocation and prepare the company for future growth opportunities, especially with the potential of new state launches in the U.S.

Conclusion: The 2023 Financial Result

XLMedia’s 2023 financial results reflect a year of significant transition. The sharp declines in revenue and profit underscore the impact of strategic asset sales, while the focus on the North American market signals a new direction for the company. With the anticipated return of capital to shareholders and a streamlined cost base, XLMedia is positioning itself for a more focused and potentially lucrative future in the sports betting and gaming industry.

FAQs on XLMedia’s 2023 Financial Results and Strategic Changes

1. What significant changes did XLMedia make in 2023? 

In 2023, the company sold its European and Canadian sports betting and gaming assets to Gambling.com, significantly impacting its revenue and strategic focus.

2. How did XLMedia’s revenue perform in 2023? 

The revenue declined by 29% in 2023, falling to $50.3 million from $70.9 million in 2022. The decrease was seen across nearly all business segments.

3. Which regions experienced the most significant revenue changes for XLMedia? 

North America saw a 42% decrease in revenue, while European revenue declined by 2%. The largest drop was in North American gaming, with a 54% fall to $0.6 million. The only growth was in European sports, which increased by 9% to $9.7 million.

4. What were XLMedia’s profit and loss figures for 2023? 

The gross profit decreased by 26% to $26.6 million. The company reported a statutory loss of $45.5 million, compared to a statutory profit of $3.4 million in 2022.

5. How did XLMedia’s EBITDA perform in 2023? 

Adjusted EBITDA for the company was $12.1 million in 2023, a 36% decline from the previous year.

6. What is XLMedia’s strategic focus following the asset sales? 

Post-sale, the company is concentrating on driving organic revenue growth in the North American market. This includes preparing for new state launches and optimizing the group’s cost base for 2025.

7. What did XLMedia’s leadership say about the asset sales? 

CEO David King highlighted the focus on North America and cost optimization for 2025. Chair Marcus Rich emphasized the value realization for shareholders and the provision of cash to clear liabilities and support North American operations.

8. How will the proceeds from the asset sales be used? 

The proceeds from the sales will be used to clear legacy liabilities and provide working capital for the North American business. There is also an anticipated initial return of capital to shareholders in the fourth quarter of 2024.

9. What segment showed revenue growth for XLMedia in 2023? 

The only segment that showed revenue growth was European sports, which increased by 9% to $9.7 million.

10. What is the outlook for XLMedia in 2024 and beyond? 

It aims to focus on organic growth in North America, expand its market footprint in preparation for new state launches, and optimize its cost structure for 2025. An initial return of capital to shareholders is expected from the sale proceeds in the fourth quarter of 2024.