XLMedia, a London-based affiliate marketing group, experienced a significant drop in its share price, falling to a record low of 5.86 pence each. This drop, amounting to a 23% decrease, followed the company’s announcement that its revenue for 2023 would be lower than previous years due to shortfalls in the North American market. This is the lowest share price XLMedia has seen since it first went public in 2014.
The affiliate group indicated that its revenues for the full year are now expected to be in the range of $50m to $52m, with adjusted EBITDA projected to be in the range of $12m to $14m. This is a significant decline from the reported revenue of $73.7m in 2022 and $66.5m in 2021, with EBITDA also showing a decrease from $16.7m and $17.9m in those respective years.
XLMedia attributed its mid-year challenges in the North American market as the primary reason for the decline in expectations. The company noted that a reduced level of customer acquisition marketing activity by some operators, as well as the withdrawal of its major partner Barstool Sports, significantly impacted its North American activities.
While the company has seen an uplift in revenues with the launch of ESPN Bet in mid-November and expects a strong close to the year in North America, it acknowledged that the mid-period shortfalls will have a lasting impact on its North American revenues.
In addition to its struggles in North America, XLMedia also discussed its decision not to pursue the sale of the company after talks with potential buyers failed to progress. The company had previously disposed of several business assets and outlined a strategy of focusing on growth in North America and strengthening its position in the European sports and gaming market.
Despite its challenges, XLMedia remains focused on continuing to build its North American-owned and operated brand and media partner footprint, and expects to see continued progress from its European brands in 2024.
In summary, XLMedia’s share price reached a record low after announcing a decline in expected revenue for 2023, primarily due to challenges in the North American market. Despite discussions about selling the company, XLMedia has decided against pursuing a sale and remains focused on its strategic growth initiatives.