Genius Sports shares jump 4% on Q3 growth and reaffirmed 2022 earnings guidance
Genius Sports has reaffirmed its previously issued full-year 2022 earnings guidance following the release of its Q3 financial results.
The business continues to point to expected revenue of around $340m and adjusted EBITDA of around $15m in 2022.Genius remains confident in its predictions following significant year-on-year growth in Q3, even in spite of highly volatile foreign currency exchange rates and an exceptionally strong US dollar.
Revenue for the quarter totalled $78.7m, a real terms increase of 13.8%.
Due to volatility in foreign exchange rates, Genius also provided a like-for-like constant currency comparison, based on an exchange rate of $1.35 to the British pound, which was the rate at the time earnings guidance was first issued in January 2022.
On a constant currency basis, revenue increased by 28% year-on-year. On that basis, revenue figures exceeded previously issued guidance of $85m, despite falling short in real terms.
The majority of revenue came from Genius’ Betting Technology, Content and Services segment, which generated $49.2m (up 12.6% year-on-year), or 62.5% of total revenue.
The Media Technology, Content and Services segment generated a further 22.8% of group revenue, at $17.9m, an increase of 29% year-on-year.
The Sports Technology and Services segment generated the remaining 14.7% of group revenue at $11.6m, but was the only segment to shrink year-on-year as revenue was down by 0.3%.
Adjusted EBITDA in Q3 came in at $7.7m in real terms and $8.7m on a constant currency basis, compared to a $0.4m EBITDA loss in Q3 2021. Both of those figures missed the mark of previously issued Q3 guidance, which pointed to EBITDA of $9m for the quarter.
Looking at the first nine months of 2022, however, group revenue and adjusted EBITDA totalled $235.7m and $13.1m, respectively.Both of those figures exceeded previously issued guidance for the period of $231m and $12m, respectively.
In Q3, Genius recorded a net loss of $9m, an improvement of 87% year-on-year, which the firm said was driven by a reduction in stock-based compensation, gains on foreign currency, and improved profitability compared to Q3 2021.
The business ended the quarter with a strong balance sheet, holding a cash balance of some $150m, and expects to hold between $140m and $150m at the end of the 2022 fiscal year.
Important events during the quarter – which saw the beginning of the 2022 NFL Season – included signing new partnerships with a total of 27 new sportsbook customers, including MaximBet, Bally’s Interactive and NorthStar Gaming.
Genius Sports co-founder and CEO Mark Locke: “This year has been characterised by strong execution as we continue to deploy innovative technology, win new customers, and strengthen our key partnerships across the sports, betting, media, and broadcasting ecosystem, all with an eye towards cost discipline and profitable growth.”
The business also launched new free-to-play game options in partnership with NFL organisations including the Denver Broncos, Indianapolis Colts, Las Vegas Raiders, and Los Angeles Rams.
Following the end of the quarter, Genius also extended an existing partnership with bet365 to include the exploratory launch of next generation betting products, powered by the supplier’s Second Spectrum tracking technology.
It also launched its new ‘In-Play MultiBet’ product and secured a new partnership with Australian Pro Leagues, including exclusive official data rights, integrity services and Second Spectrum technology.
The firm’s earnings guidance for 2023 points to revenue between $430m and $440m, and group adjusted EBITDA between $40m and $50m.
“We are pleased to deliver another quarter of growth and group adjusted EBITDA profitability, and we remain on target to achieve our full-year goals set on our Investor Day at the start of 2022,” said Mark Locke, Genius Sports co-founder and CEO.
“This year has been characterised by strong execution as we continue to deploy innovative technology, win new customers, and strengthen our key partnerships across the sports, betting, media, and broadcasting ecosystem, all with an eye towards cost discipline and profitable growth.”