XLMedia Reports Financial Results for FY 2023
XLMedia, a sports and gaming digital media company, reported its audited results for the year ending December 31, 2023. The company delivered revenue of $50.3 million from continuing operations, with an adjusted EBITDA of $12.1 million. The company maintained a loan-free status with cash balances, including short-term deposits, of $4.8 million as of December 31, 2023.
Significant transactions in 2023 included the sale of XLMedia’s Personal Finance business for $2.05 million in H1 2023, and the sale of three Europe gaming domains and associated websites for $4.0 million in July 2023.
Additionally, XLMedia received $37.5 million from the sale of its Europe and Canada assets to Gambling.com Group Limited on April 1, 2024, with potential additional earnouts of up to $5.0 million.
Financial Performance
Revenue from continuing operations decreased by 29% to $50.3 million compared to $70.9 million in 2022. Gross profit also declined by 26% to $26.6 million.
The company recorded an operating loss of $44.9 million, mainly due to a non-cash net impairment charge of $44.6 million related to US Sports and Europe Sports assets. Adjusted EBITDA fell by 36% to $12.1 million, resulting in an adjusted EBITDA margin of 24%.
Revenues from North America dropped by 42% to $27.5 million, primarily due to the smaller scale of new state launches compared to 2022.
Europe revenues experienced a modest decline of 2% to $22.8 million. Notably, North America contributed 55% of the Group’s total revenues, down from 67% in 2022.
Strategic Initiatives
XLMedia continued to expand its presence in the US, now operating across 21 regulated states. Key initiatives included the expansion of its Media Partnership Business with agreements signed with Atlanta Journal-Constitution and WRAL.
Post-period, contracts were also signed with Star Tribune and NOLA.com. The Group re-platformed its Europe Sports websites and invested in its Europe Gaming websites, resulting in a 9% year-on-year growth in Europe Sports.
In March 2024, XLMedia announced the sale of its Europe and Canada assets for a fixed sum of $37.5 million, with a potential earnout of up to $5.0 million.
The transaction was completed on April 1, 2024. The Group paid $7.4 million in deferred and earnout acquisition payments in 2023, using approximately $6.0 million of gross proceeds from asset sales to support these payments.
Future Outlook
XLMedia’s focus in 2024 will be on driving organic revenues in the North American market while preparing for new state launches. The absence of new state launches in January 2024 will impact period-on-period comparisons.
However, the launch of online sports betting in North Carolina in March 2024 has shown promising growth in customer registrations.
The company expects Adjusted EBITDA for continuing operations to be around $5.0 million for the full year 2024, with 2025 benefiting from the full-year effect of cost savings made in 2024.
Management Commentary
David King, Chief Executive Officer of XLMedia, stated, “Following the announcement of the sale of the Europe Sports and Gaming business, we are focused on driving organic revenues in the North American market, while expanding our footprint in preparation for new state launches. We are committed to right-sizing the Group’s cost base for 2025.”
Marcus Rich, Chair of XLMedia, added, “We are delighted to have realized value for shareholders from the sale of the Group’s Europe and Canada assets, providing cash to clear legacy liabilities and working capital for the North American business. We anticipate an initial return of capital to shareholders from sale proceeds in Q4 2024.”
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