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  • XLMedia’s FY 2023 Results Decrease amid Internal Restructuring

    XLMedia’s FY 2023 Results Decrease amid Internal Restructuring

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    Sports and gaming digital media company XLMedia has published its audited results for FY 2023, outlining significant declines across the board.

    Key highlights included revenue of $50.3 million, down 29% year-on-year. For comparison, the company’s revenue for FY 2022 stood at $70.9 million. The decline in revenue resulted in a 26% decrease in gross profit to $26.6 million (previously $36 million).

    Additionally, the FY 2022 operating profit of $6.2 million turned into an operating loss of $300,000 in FY 2023.

    Adjusted EBITDA, on the other hand, plummeted 36% to $12.1 million, down from $18.9 million in 2022. Adjusted EBITDA margin for FY 2023, meanwhile, stood at 24%, reflecting a decrease of 3% from the prior year period.

    XLMedia also reported a statutory loss of a whopping $45.5 million for the period, offsetting a statutory profit of $3.4 million in 2022.

    Whereas the company recorded basic earnings per share of $0.009, it now recorded a loss per share of $0.173.

    XLMedia’s business in Europe remained somewhat stable. The Europe (Gaming) segment reported a decline of 8%, offsetting an increase of 9% in Europe (Sport). Overall, the company’s revenue in Europe experienced a decline of 2%.

    The company’s business in North America, however, experienced significant setbacks as the North America (Sport) and North America (Gaming) segments declined by 42% and 54% respectively. Despite an overall decline of 42%, proceeds from the region still represented 55% of the group’s revenues.

    After divesting certain assets, XLMedia now expects FY 2024 adjusted EBITDA of approximately $5 million.

    Other Key Highlights

    Not everything is grim for XLMedia as the media giant continues to steadily expand its presence in the highly lucrative US market. The company is now operating in 21 states and counting.

    In 2023, XLMedia also supported PENN Entertainment’s re-entry with the launch of ESPN BET in Q4.  The company also re-platformed its Europe Sports websites alongside investing in Europe Gaming websites, delivering 9% YOY growth in Europe Sports.

    In 2023, the company proceeded to streamline its business, cutting non-core activities and delivering cost savings of over $8 million.  

    David King, XLMedia’s chief executive officer, commented on the results, saying that the company will focus on driving organic revenues in North America while continuing to expand its footprint in preparation for market expansion.

    Marcus Rich, the company’s chairman, added that the company is delighted to have realized value for shareholders. He added that XLMedia anticipates an initial return to capital shareholders from sale proceeds in Q4 2024.

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    Angel Hristov

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  • Gambling.com to Acquire XLMedia Betting Assets in $42.5M Deal

    Gambling.com to Acquire XLMedia Betting Assets in $42.5M Deal

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    Gambling.com Group, an award-winning performance marketing company serving the iGaming industry, has entered into an agreement to acquire XLMedia’s sports betting business in Europe and Canada. The $42.5 million deal comes in the wake of the signing of a new $50 million credit facility with Wells Fargo.

    Under the deal, Gambling.com will pay a fixed sum of $37.5 million, plus up to $5 million more, depending on the assets’ performance. The fixed consideration will be paid in three installments, including an initial payment of $20 million upon the completion of the deal, $10 million after 6 months and $7.5 million after a year. The potential earn-out will be paid out together with the final installment.

    To fund the purchase, Gambling.com will tap into its cash reserves, borrowings under its recent credit facility and future cash flow.

    The transaction will see XLMedia divest brands, such as Freebets.com, Nettikasinot.com, Vedonlyonti.com and WhichBingo.co.uk, among others smaller affiliates. Gambling.com expects the new assets to generate up to $10 million in revenue and approximately $5 million in incremental adjusted EBITDA from April, when the deal is set to close, to December.

    Gambling.com, however, will not acquire XLMedia’s North American business, which was the main driver of revenue in 2023. XLMedia will use the proceeds to cover transition costs, pay taxes and dividends, and supply the aforementioned NA business with capital. The deal aligns with the latter company’s goal to reorganize its business and focus on more profitable markets.

    The Deal Will Benefit Both Companies

    Charles Cillespie, Gambling.com’s group CEO, commented on the deal, saying that the new acquisitions will complement his company’s existing website portfolio in a number of key markets.

    The deal, he believes, will provide Gambling.com with opportunities to grow in high-margin jurisdictions.

    By operating these assets on our technology platform, we expect to unlock their full potential. We are confident that this latest acquisition will create incremental shareholder value in the same way we have done with previous acquisitions.

    Charles Cillespie, group CEO, Gambling.com

    Marcus Rich, XLMedia’s chairman, also commented on the matter, calling the sale an “excellent outcome” for XLMedia and its shareholders. He pointed out that the sale price is equal to two times the current market capitalization of the whole company.

    Importantly, this transaction will allow the company to clear legacy liabilities, provide working capital and return cash to shareholders.

    Marcus Rich, chair, XLMedia

    In other news, Gambling.com recently joined five like-minded US affiliates, namely Better Collective, Catena Media, Oddschecker Global Media, Spotlight Sports Group and XLMedia, to form the Responsible Gambling Affiliate Association (RGAA). The association seeks to promote regulatory improvements across US jurisdictions.

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    Angel Hristov

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