XLMedia Reports Revenue Drop Following Assets Sale

Financial Performance Overview

The H1 revenue decrease reflects the partial year reporting of the discontinued European and Canadian businesses, which contributed $5.2 million in Q1 2024 compared to $12.5 million in H1 2023.

The continuing business, primarily in North America, generated $10.4 million, down from $16.9 million in the same period last year.

The main highlight for the H1 was the completion of the sale of XLMedia’s European and Canadian assets to Gambling.com Group Limited (GAMB) for a fixed consideration of $37.5 million, with a potential earnout of up to $5.0 million based on revenue performance. The transaction was completed on April 1, 2024.

The North American segment experienced a solid start to the year, bolstered by the launch of online sports betting in North Carolina on March 11, 2024.

Despite this positive development, H1 2024 revenues were lower than H1 2023 due to launches in Ohio and Massachusetts last year during and after the NFL season, respectively.

The upcoming NFL season in September 2024 is expected to provide a substantial revenue boost for the company.

Operational Adjustments and Future Outlook

XLMedia’s cash position at the end of June 2024 was $19.4 million, following the receipt of an initial $20.0 million payment from the GAMB transaction. The next installment of $10.0 million is due in October 2024. The company plans to return capital to shareholders from the net sale proceeds in Q4 2024.

Additionally, XLMedia made a $3.5 million payment related to the final tranche of the CBWG acquisition and will make a final $4.0 million payment for the acquisition of Saturday Down South in September 2024, eliminating any remaining deferred acquisition payments.

The group continues to incur transition and restructuring costs related to the discontinued business. Despite a seasonal dip in sports revenues during the NFL off-season, XLMedia is preparing for the new NFL season and optimizing performance in legalized sports and gaming states.

The company is diversifying revenue streams through daily fantasy sports, paid media, advertising, sponsorship, and expanding its gaming presence for long-term growth.

In response to Google’s actions in May 2024, which affected the visibility of some sports betting and gaming content, XLMedia is working closely with media partners to mitigate impacts and enhance content rankings. The owned and operated sports affiliate websites have shown improvement in their search rankings.

Adjusted EBITDA for the continuing business, excluding the revenues and costs of the discontinued business, is projected to be around $5.0 million for the full year. This projection benefits from the upcoming NFL season and a reduction in central costs serving the continuing business in the second half of 2024.