XLMedia Faces Record Share Price Drop as 2023 Revenue Outlook Disappoints
Date: 2023-12-19 Author: Dima Zakharov Categories: PAYMENT SOLUTIONS
XLMedia Shares Plummet as Revenue Projections Falter
XLMedia, a prominent player in the affiliate marketing industry, recently experienced a sharp 23% drop in its share price, marking a record low since its initial public offering in 2014. This dramatic decline follows the company's announcement of a bleak revenue outlook for the year 2023, attributing the downturn to challenges faced in the North American market.
No Sale Pursued Amid Failed Suitors
In addition to the discouraging revenue projection, XLMedia's board has revealed that it will not pursue the sale of the company, despite prior discussions with potential buyers that failed to progress. This decision underscores the company's determination to overcome its current challenges.
Lowered Revenue Expectations
XLMedia's anticipated revenue for the full year 2023 is now expected to range between $50 million and $52 million, with adjusted EBITDA projected to fall between $12 million and $14 million. These figures represent a significant decline compared to 2022 when the company reported revenue of $73.7 million and EBITDA of $16.7 million.
Mid-Year Challenges in North America
The company attributes its lowered expectations to challenges encountered in the North American market, particularly a reduced level of customer acquisition marketing activity by some operators and the withdrawal of its major partner, Barstool Sports.
Hope for a Strong Finish in North America
Despite these setbacks, XLMedia anticipates a strong end to the year in North America following the launch of ESPN Bet in mid-November. Meanwhile, the group's European brands, Nettikasinot, Whichbingo, and Freebets, remain on track to deliver substantial year-on-year growth.
Exploring Asset Sales
XLMedia previously initiated a review aimed at creating shareholder value, leading to discussions regarding the sale of assets and the company as a whole. However, it has decided that a sale of the entire company is unlikely to maximize value for shareholders.
Exiting Non-Core Activities
XLMedia's strategic focus on exiting non-core activities remains unchanged. The company is committed to concentrating its resources on growth in North America and strengthening its presence in the European sports and gaming market.
In summary, XLMedia faces a challenging period as it navigates revenue and earnings setbacks, primarily driven by difficulties in the North American market. Despite the record share price drop and discussions of asset sales, the company remains determined to overcome these challenges and thrive in its core markets.
