The digital performance publisher XLMedia has indicated a cautious outlook as it prepares for a year focused on consolidating its assets and operations. The company predicts both revenue and adjusted EBITDA for the year to be at the lower brackets of its previously issued guidance in December. The anticipated figures represent reductions from the previous year, attributed to challenges primarily encountered in the North American market.
In a detailed financial update, XLMedia has disclosed that their 2023 revenue will hover around $50.0 million, marking a substantial 32.2% decline from the prior year, aligning with the lower end of the $50.0m to $52.0m range forecast in December. Regarding adjusted EBITDA, it is set to hit $12.0 million, a 28.1% decrease compared to 2022, again at the lower limit of the December projections, which extended from $12.0m to $14.0m.
Delving into its performance nuances, the firm highlighted a diverse year with some positive developments and a few setbacks. A return to growth was seen in its premium European assets, including Nettikasinot, WhichBingo, and Freebets.com. The company noted strides in modernizing legacy technologies and effectuating further cost-cutting strategies.
The year also started promisingly in the United States, with the successful introduction of online sports betting in Ohio. However, the American market proved volatile; shifts in operator customer acquisition strategies significantly affected XLMedia’s outcome. This volatility included the departure of the Barstool Sportsbook betting brand and the entrance of ESPN Bet. The company also reflected on the banner revenues of early 2022 brought on by the launch of online sports betting in New York and noted that the 2023 figures mirror a decreased scale of state launches in comparison.
As XLMedia sets its eyes on 2024, key plans are highlighted, such as the anticipated mid-March debut of online sports betting in North Carolina—a market deemed potentially significant. Poised to leverage both owned and media partner brands, the company believes they are well-positioned for this launch.
With no other state launches on the immediate horizon for 2024, XLMedia is betting on a post-electoral acceleration in online sports betting legalization across additional states. Approximately 20 states currently lack a legal betting framework, with some showing active ballot initiatives which could translate into future opportunities for the company.
With the landscape gradually evolving, XLMedia has outlined a year of consolidation ahead, focusing on opportunities in both the U.S. and European sectors. Emphasizing growth in its coveted European brands and capitalizing on the existing U.S. markets, the company is also strategizing to pare down further, thereby right-sizing the business in anticipation of market expansion in 2025.
This forecast follows an announcement last month where XLMedia stated that their Chief Financial Officer, Caroline Ackroyd, would resign from her position effective March 31. Ackroyd, who assumed her role in March 2022 after being named CFO in November 2021, is departing to join a gambling operator, bringing to a close a tenure that spanned a turbulent fiscal environment.
XLMedia’s announcement underscores the challenges and the resiliency required to navigate the complex and shifting sands of the digital betting landscape. The strategic focus on consolidation reflects a pragmatic approach as the company seeks to stead its financial footing and prepare for future growth opportunities in the ever-evolving world of online sports betting.
