XLM reiterates July trading expectations as H1 revenues slump but profit rises

Although XLMedia (XLM) revenue fell during H1 2023 the group closed the quarter with a significantly higher profit than last year despite noticeable declines in revenue.

The affiliate and media publisher, listed on the London AIM exchange and active in Europe and the US, more or less confirmed the figures projected in a trading update back in July. 

Overall group-wide revenues stood at $29.4m, 34% lower than $44.5m the year prior. Having divested its Personal Finance asset portfolio to focus solely on the betting and gaming media side of its business, XLM further detailed revenue from its ‘continuing business’ of $27.9m, 33% lower than $41.9m last year.

EBITDA for both group wide revenue and continuing business also fell, in the case of the form by 4% from $11m to $6.5m, and in the latter by 19% from $12m to $7m.

Despite these declines in revenue and EBITDA, the streamlining of its business has apparently benefited the group’s profitability, with reported profit for the period rising 90% from $500,000 to $4.7m.

The above mentioned process has seen the company implement a ‘rationalisation and simplification programme’ which has seen the closure of ‘non-core assets’ and a 14% reduction in headcount.

As with previous trading updates, XLM was keen to emphasise its activity in the US, where it has been building up its business via revenue-share agreements with the likes of bet365, Betway and Pointsbet, whilst also extending its partnership with Schneps Media.

H1 saw market launches in Ohio and Massachusetts in January and March respectively – with XLM live in both states via its Cleveland.com and MASSlive.com sites – but the group acknowledged that this “did not match the same period in the prior year”.

Although still the standout revenue generator for XLM, US sports revenue dropped 46% from $30.2m to $16.2m, but the company remains confident in its prospects after the Massachusetts and Ohio launches expanded its stateside presence to 19 states.

In contrast, European sports betting saw an increase of 15% from $4.8m to $4.5m, although gaming revenue in the region fell 12.5% from $8m to $$7m.

David King, Chief Executive Officer XLM CEO, said: “Having pivoted the Group into a North American, sport-led business in 2020 and 2021, XLMedia is well placed to participate in the long-term growth of online sports betting. 

“However, as previously noted, the Group’s overall growth will not be linear while the affiliate revenues in North America remain principally a one-off introductory fee and the timing and scale of new state launches impact period-to-period comparisons. 

“We are working to develop more revenue share relationships with operators in the US, while also successfully building our recurring revenues in Europe, providing a solid base for future growth.”