XLMedia on target to deliver 2023 expectations despite H1 decreases

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In a trading update, XLMedia has reported a year-over-year decline in both total revenues and adjusted EBITDA for the first six months of 2023.

However, the group has noted that yearly performance is a reflection of operator marketing activity not being on the same level during the period as it was in early 2022, following the launch of the New York online sports betting market.

For H1, XLMedia declared total revenue of approximately $29.4m, down 34 per cent when compared to H1 2022’s $44.5m. Adjusted EBITDA fell as well by 39 per cent in comparison to the previous year to $6.5m (2022: $10.6m).

Despite these drops, the company has stated it is making significant progress with its strategy and that full-year adjusted EBITDA is still “in line” with management’s expectations after adjustment for the recent sale of three European casino assets.

As previously noted, the group made it clear that H1 2023 did not have the same level of operator marketing activity as H1 2022, despite Ohio’s online sports betting market going live in January.

XLMedia added that new European growth across gaming and sports betting was delivered, while costs were reduced and the organisation’s structure was simplified, although this did result in the group reducing its headcount by 14 per cent.

Highlights from the company’s H1 include signing revenue share agreements with bet365 and Betway in the US, adding three more years to an amNY partnership with Schneps Media, US gaming casino traffic growing by 124 per cent in three key states growing non-seasonal revenue, and the launch of US online casino site HoneyMonkeyPineapple.

Elsewhere, XLMedia aforementioned asset sale – Casino.se, Casino.gr and Casino.pt – was done so for $4m, while also exiting non-core activities via the sale of personal finance business Reef Media and Blueclaw for a cash consideration of $2.05m.

The group has also launched its dynamic offer engine to automate and optimise new sports betting promotions conversion rates utilising AI tools to improve content creation, and is getting ready for the launch of online sports betting in Kentucky and North Carolina.

In preparation for the new NFL and NCAA seasons in the US, XLMedia went live with daily fantasy sports promotions and new display media advertising and sponsorship packages.

In Ireland, Freebets.com was launched, accessing the country’s horse racing market and in readiness for the new Premiership football season.

Taking a look at each individual vertical, gaming H1 revenue came in at $7.4m, down 12 per cent YoY (2022: $8.4m). This figure includes the performance of the previously mentioned three European casino assets up until their sale.

Per region, the company stated that European operations were performing “marginally” better than management’s expectations, despite being down to $7m compared to 2022’s $8m. Real money players increased by nine per cent YoY.

WhichBingo revenue rose by 38 per cent with RMPs growing by 28 per cent, while Nettikasinot revenue improved by five per cent with RMPs increasing by 16 per cent. The group also launched the Swedish online casino site Kasino.se.

In North America, gaming revenues stayed flat at $400,000 as its offering in the region was rebuilt, culminating with the launch of HoneyMonkeyPineapple.

For sports betting, H1 revenue came in at $21.4m, a 37 per cent decline YoY (2022: $34m). European operations rose to $5.2m (2022: $3.8m) following 36 per cent growth in RMPs, strong performance across several horse racing events and a good end to the Premier League season.

Meanwhile, North American revenues fell to $16.2m (2022: $30.2m) as several operators limited their marketing spend as strategies were reviewed, reducing operator marketing activity in comparison to the previous year despite the market launches of Ohio and Massachusetts.

Cash balances for the period stood at approximately $7.4m, which includes the sale of the three European casino assets for $4m.

Elsewhere, a 15 per cent reduction in the level of fees paid to non-executive directors was implemented, the advisor’s panel was streamlined, and both Richard Rosenberg and Jonas Mårtensson announced their intention to step down as Directors of the group.

XLMedia expects to report unaudited H1 interim results in the week beginning 25 September 2023.