Stateside prospects trump Europe for XLM after achieving 2022 revenue targets

Stateside prospects trump Europe for XLMedia after achieving 2022 revenue targets

Momentum in the US last year provided XLMedia (XLM)  a ‘solid start’ to 2023, the company has asserted to its AIM investors, having achieved broad growth amid a business-wide restructuring.

The London-headquartered betting and gaming publisher reported that, having launched operations in 19 US states, revenue from ‘continuing operations’ has risen 24% to $71.8m ($57.8m) in 2022.

However, XLM was forced to acknowledge a 14% decline in full year profit from its continuing operations, which fell from $2.8m in 2021 to $2.4m last year as the group focused on restructuring its European Gaming and Sports division and expanded in the US.

When financial services assets, which the group plans to divest, are included in full year earnings, XLM was able to achieve its projected revenue figure of $73.7m, up 11% from $66.5m the year prior.

Despite this, the costs of growth still bit into both profit and EBITDA from continued and discontinued business, declining respectively by 7% to $16.7m ($17.9m) and 521% to a loss of $11.8m, in comparison to $2.8m in profit the year prior.

XLM CEO David King said: “We made good progress in 2022, having re-engineered the business to become one of the leading sports betting affiliates in North America and our US business is expected to continue to evolve at a rapid pace as the market starts to migrate from up front acquisition payment to revenue share agreements. 

“However, our mix of media and betting brands, both owned and partnered, are well placed in that environment to build sustainable revenues. Within our European Sports and Gaming operations, our teams continue to build back our business following the recent restructure.”

Although facing some hurdles in the path of profit and positive EBITDA, XLM remains confident in its 2023 prospects – particularly its business potential in North America – as revenue for its core business grew 27% to $69.6m ($54.6m), with adjusted EBITDA up 25% to $18.2m ($14.6m) but with a slightly slower margin of 26% (27%).

Updating its investors on 2023 strategy, the company highlighted the US as the main area of focus, with its European focus remaining on the restructuring of the Sports and Gaming division and no new launches planned in the continent.

XLM stated that its main areas of focus in the US will be on revenue diversification, working with operators on a revenue share basis when available.

Capitalising on the recent launch of online sports betting in Massachusetts is also a key objective for the group, although the New England state has taken a more stringent approach to affiliate marketing than other jurisdictions, such as limiting revenue share arrangements.

“2022 has been an important year for refocusing the business and I’m pleased with the progress we have made,” King continued.

“Whilst still early into the new year, I’m confident XLMedia is in a stronger position as a result of the actions we took and I look forward to updating on our continued progress in 2023.”

Looking back over 2022, XLM noted a number of major changes for the firm, both regarding structure and leadership – developments in the latter area saw King assume CEO duties, Marcus Rich join as Chairman and Caroline Ackroyd as CFO.

On a structural basis, the aforementioned reorganisation of its European business began last year and continues into the new year, whilst in the US ‘one layer of management’ was removed and all media and betting assets acquired the year prior were integrated.

Internally, the group places faith in the planned sale of its Personal Finance division and exit from the financial services sector as aims to lay the foundation for a more streamlined focus on betting and gaming.

Concluding, Chairman Marcus Rich remarked: “A key feature of the past year has been the progress of our strategic redirection. Pleasingly, this is being delivered against the backdrop of the renewal of our leadership team. 

“I firmly believe that we now have our focus on the correct areas and that the quality of our content and our engaged users gives us a competitive advantage.”

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