XLMedia has adopted a new strategy that emphasizes organic revenue growth in North America to balance costs by 2025. The company sees significant market potential in the 20 states yet to legalize online sports betting, including California and Texas, and the 43 states that have not legalized online casino gaming.
As part of its strategic reorganization, the London AIM media group has agreed to sell its European and Canadian assets to Gambling.com Group for $38 million, with an additional $5 million in cash. XLMedia management anticipates “an initial return of capital to shareholders from the net proceeds of the sale in the fourth quarter of 2024.”
The company will provide Gambling.com with six months of transition support. Following the sale, XLMedia expects its adjusted EBITDA from continuing operations to be around $5 million.
XLMedia CEO David King stated: “With no further state launches confirmed, the Group is focused on optimising existing legalised sports betting states, monetising its audiences, and preparing the portfolio to maximise revenues from the new NFL season.
This includes daily fantasy sports, advertising and sponsorship, as well as new customer acquisition. The North America business is now in the off-season and will see the normal seasonal dip in sports revenues.”
The new strategy prioritizes growth in the U.S. market. For fiscal 2023, XLMedia reported a corporate loss of $57 million, primarily due to necessary write-downs of its former European media assets and the reorganization of its U.S. network.
Despite recent Google algorithm changes affecting SEO rankings, US media partnerships remain positive. “The Group is working closely with all of its media partners, most of whom have not been impacted by the changes to date. The Group continues to focus on its owned and managed websites, which have seen some improvements in rankings.”
King concluded: “Going forward, we will retain our focus on driving organic revenues in the North American market while continuing to prioritise rightsizing the Group’s remaining cost base, allowing it to enter 2025 with an infrastructure commensurate with the requirements of our North America business.
We would like to thank our shareholders for their support and look forward to updating shareholders on our progress going forward.”
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