XLMedia revenue sinks 31% on Google demotion and Covid impact
Full-year revenue falls to $54.8m as CEO Stuart Simms says affiliate was “knocked off track” by unforeseen challenges
XLMedia has reported a 31% decrease in full-year 2020 revenue to $54.8m.
The downturn was driven by a Google search ranking demotion at the beginning of the year across more than 100 of its casino websites.
That, combined with a lack of sport due to Covid-19, saw the group lose $2m in revenue per month for a number of months after the initial impact was felt in March.
Closure of the Jersey-based affiliate’s media business during the year also negatively impacted annual revenue to the tune of $5m.
During the year, 61% of revenue came from the casino vertical, dropping to 22% for sports, 15% for finance and 2% for bingo.
More than half (57%) of total revenue was earned via rev share model, falling to 20% for CPA.
Adjusted EBITDA for 2020 fell by 64% to $12.2m, down from $33.5m in the prior corresponding period.
Gross profit for the year also dropped by 36% to $34.3m.
Since the reporting period, XLMedia has narrowed its focus to concentrate on 10 of the top-tier penalised casino websites, as well as high-performing assets that did not get penalised by Google.
It has since pledged to focus resources on rebuilding new revenue sources from a lower base.
During the year, XLMedia made two key acquisitions in the US sports betting market, first paying $12m for CBWG Sports before buying Sports Betting Dime for $26m.
XLMedia CEO Stuart Simms said: “We entered 2020 with strategic and operational clarity, only to find ourselves knocked off track in the short term by the unforeseen challenges of a Google penalty and the Covid-19 global pandemic.
“Even against this backdrop the business performed relatively well, and we made significant progress on the priorities of upgrading the asset portfolio and restructuring the organisation, which will drive performance over the longer term.
“Over the last few months, the company completed two significant acquisitions in the US sports market. This is a very positive and material step in rebalancing the group, providing immediate scale in an attractive and high-growth, regulated market.”
Simms pledged XLMedia will invest further in 2021 to transform the business and overhaul the systems supporting it as it looks to deliver a new long-term operating structure to maximise growth.
The business restructuring has already led to a headcount reduction of around 20%.
“Notwithstanding this, our level of confidence in the business performance and recovery continues to grow and we have entered 2021 with positive momentum, which we expect to lead to revenue materially ahead of the previous year,” Simms added.
XLMedia’s share price fell by more than 13% in trading on the London Stock Exchange.