XLMedia H1 revenue falls 34%
Affiliate posts revenue of $29.4m as it notes unpredictable nature of sports betting in different US states
XLMedia has stated that it still expects to hit adjusted EBITDA targets despite revenue and earnings falling in H1 2023.
The London-listed affiliate announced revenue of $29.4m (£24.2m) for the first six months of the year for all operations, representing a year-on-year (YoY) drop of 34% on the $44.5m recorded in 2022.
Adjusted EBITDA fell by 29% YoY from $10.6m to $6.5m, while reported profit for the firm rocketed by 840% from $500,000 to $4.7m.
Breaking revenue down by vertical, sports generated $21.4m, representing a 37% YoY drop from H1 2022’s $34m.
Further breaking this figure down by region, North American sports revenue fell 46% from $30.2m to $16.2m, while European revenue rose 37% from $3.8m to $5.2m.
Due to market openings in Ohio and Massachusetts, XLMedia is now operational in 19 states, however, the affiliate noted that due to the late state launch of Massachusetts after the end of the NFL season, revenue was a lot lower than expected.
The launch of Kentucky sports betting this month was highlighted as a potential business driver for H2 2023, with management noting the new NFL season remains a “critical element” in delivering expectations.
The firm’s media partnership business saw revenue also fall by 40% from $20.5m to $12.2m.
Elsewhere, the affiliate’s gaming revenue fell by 14% YoY to $7.4m, with the firm’s European operations reporting a drop of 13%.
The gaming business did not have any dedicated North American gaming site during H1, and the only revenue the firm generated from the region in H1 was via the group’s O&O betting sites, which amounted to $400,000.
Additionally, XLMedia also announced the sale of the loss-making personal finance business for a total cash consideration of $2.1m during H1, with revenue for this segment prior to the sale reaching $600,000.
Following the conclusion of the period, XLMedia announced that it was selling three of its European gaming divisions for a total cash consideration of $4m.
Speaking on the results, CEO David King commented: “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.”
King noted that due to the unpredictable nature of the legalisation of sports betting in different US states, growth was also unpredictable as a result.
He explained: “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.”