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Shares in Sportradar have slumped nearly 15% despite the company reporting a total revenue increase of 23.6% in Q1 2023 and 55% annual growth from the US.

Topline numbers

Revenue in Q1 2023 grew 23.6% year-on-year to €207.6m.

The company’s Rest of World (non-US) Betting segment continued to generate the lion’s share of revenue, at €108.5m, a 25.1% increase year-on-year.

The Rest of World AV segment generated €44.6m, down around 3% on the prior year, while the US Betting segment was the fastest growing business area for Sportradar, generating €39.7m in revenue, up 54.8%.

The remaining €14.8m revenue came from ‘all other segments’, up 54.7% year-on-year.

Overall, the business was left with quarterly adjusted EBITDA of €36.7m at a margin of 18%, up from €26.7m on a 16% margin in the prior-year comparative period.

Group profit for the period was down by 17% year-on-year to €6.8m.

News nugget

Effective as of yesterday (9 May), Sportradar has appointed former Zynga finance chief Gerard Griffin as its new CFO.

He takes over from outgoing CFO Ulrich Harmuth, who occupied the role for the past seven months on an interim basis, alongside his primary role as Sportradar’s chief strategy officer.

In other news, Sportradar had a productive quarter across several areas in Q1. 

The company was selected as the successful bidder for the global Association of Tennis Professionals (ATP) data and streaming rights, beginning in 2024, “as a result of the company’s commitment to product innovation,” it claimed.

Sportradar has been a supplier of official ATP Tour and Challenger Tour secondary data feeds since 2022.

The business also announced the integration of its ad:s technology into social media messaging service Snapchat, creating a new channel for betting operators to deploy its paid social media advertising service.

Betting operators will now have the ability to reach Snapchat’s 350 million daily and 750 million monthly active users, it said.

Finally, the business has broadened its footprint in the US college sports space, by renewing its partnership with the Big Ten Network, operator of the oldest Division I collegiate athletic conference in the US.

Sportradar will power the Big Ten’s B1G+ over-the-top platform through the 2024-25 college athletics season, and will manage the platform across web, mobile and connected TV apps, as well as providing UX/UI design and third party integration.

Best quote

“Snap is from a technology perspective very quick in adopting and integrating, so that was naturally a very good partner for us in this. Paid social is a very interesting segment for us and you will see more rollouts here.”

– Sportradar CEO Carsten Koerl on whether ad:s will be integrated with social platforms such as TikTok, Facebook and Instagram following its Snapchat integration

Best question

Sportradar has recently put significant investment into the development of AI technology to help automate some of its processes and develop better products for operators.

Bernie McTernan of Needham and Co asked management how that investment is expected to drive future growth for the company, and over what timeframe.

In response, CEO Koerl said: “The industry is in a transformation process, so we are replacing human beings collecting sport information with digital systems. That’s a continuous process, and it will be rolled out over most of the sports. 

“What it provides is much deeper insights into the sports, and allows us to create new, value-creating products for our clients. So the answer here is it’s a continuous investment. 

“We need to do it to stay on top of the technology, and to serve clients with products which are creating value for them.”

Koerl explained that the technology has been proven first in racquet sports, with tennis and table tennis being the first to demonstrate its uses.

He added that the business is “working heavily in the background” with both the NHL and NBA, on using deep data for creating insights and assessing probabilities in hockey and basketball.

In turn, he said, the developments will help to drive new and innovative products for operators.

“So the answer is that it’s an industry transformation, and the market is very hungry for the data and for products which are based on this,” Koerl concluded.

Current trading and outlook

Following the release of its Q1 results, Sportradar has reaffirmed previously issued revenue guidance for the full year 2023 of between €902m and €920m.

Adjusted EBITDA for the year is expected to come in between €157m and €167m, at a margin between 17% and 18%.

If those targets are achieved, year-on-year EBITDA growth will be somewhere between 25% and 33% compared to 2022.

As of the end of the quarter, the business holds €239.6m in cash and cash equivalents and a revolving credit facility of €220m, providing total liquidity of €459.6m.

However, the stock fell by some 15% following the publication of the Q1 2023 financial results.

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