Sportradar caps first full year as public company with 25% Q4 revenue rise

Sportradar registered impressive growth across all business segments throughout 2022 during its first full year of trading as a public company.

Topline numbers

Q4 revenue came in at €206.3m, 25.4% ahead of the prior-year period.

Revenue is divided into four business segments: US, Rest of World Betting, Rest of World AV, and Other.

Sportradar’s US segment was the fastest growing area of the business in Q4, where revenue increased 77.3% to €41.2m.

Rest of World Betting was the largest segment by revenue, however, growing 28.8% to €105.9m. 

Rest of World AV revenue climbed 17.4% to €41.8m, while the Other segment generated the remaining €17.4m of Q4 revenue, up 54.1%.

Those figures contributed to significant growth for full-year 2022. 

Total annual revenue reached €730.2m, up 30.1% compared to 2021.

Group adjusted EBITDA for Q4 was €35.1m, up 64.3%, and for the full year was €125.8m, up 23.4%.

The business declared a full-year profit of €10.5m, down 18%. This came despite reporting a €33.3m loss during Q4.

News nugget

Sportradar was able to pay off an outstanding €420m term loan debt in its entirety during 2022.

Meanwhile, the business generated positive cash flow and ended the year with more than €240m in cash, with total cash and undrawn credit facilities totalling €464m.

That was helped in no small part by the firm’s managed trading services (MTS) division registering 75% growth in Q4, thanks to a strong performance during the FIFA World Cup.

MTS trading volume was at least twice as high during the tournament in November and December when compared to any other month throughout 2022.

Sportradar also signed a number of new multi-year agreements with US market leader FanDuel for the provision of data from the NBA, NASCAR, the Turkish Basketball Federation, Australian cricket competitions and tennis.

During 2022, the firm also acquired AI solutions start-up Vaix.

According to London-based advisory firm Regulus Partners, Sportradar’s 2022 results proved a successful shift “from a waterfront betting content distribution model to a rights-led model,” as the rights to exclusive sports data become an increasingly significant part of the business.

After the reporting period, Sportradar noted it was in discussions with the ATP over an exclusive six-year rights deal focused on data, streaming and integrity.

Regulus added, however, that “in a rights-led data model, we are unlikely to see a 4x blended turn on the cost of the rights portfolio (i.e. a 25% cost of rights) being sustainable, in our view. 

“Pushing the increasing cost of rights onto larger betting operators has proved to be relatively easy (if painful) in visible domestically regulated markets, but it becomes much more challenging in the long-tail of betting operators which Sportradar historically serviced effectively.”

Best quote

Sportradar CEO Carsten Koerl: “When annualising our Q4 trading volume, we traded €19bn, which is comparable with the liquidity of a top 10 global betting operator.”

Best question

The best question on today’s earnings call came from UBS MD and leisure analyst Robin Farley. 

She asked management what percentage of the bets processed using Sportradar data were in-play, as opposed to pre-match.

Koerl said that while Sportradar does not give a specific breakdown on a quarterly basis, the business noted the proportion of in-play bets in the US is far behind where it stands in Europe.

“In Europe we see around 80% of all bets are in-play. In the US, that varies, depending on the sport, between 15% and 35%,” he revealed. 

Sportradar’s active participation is much higher when it comes to taking in-play bets, he added, suggesting that any percentage point increase in in-play mix would result in additional revenue of €1.2m for the company. 

“And that has practically no cost, because we have the deployment systems and the products in place,” he added. 

Koerl concluded there is a general trend that US markets follow international markets eventually, and that in-play participation should continue to increase.

Current trading & outlook

Earnings for 2022 came in ahead of previously stated expectations. For 2023, the company expects revenue to fall between €902m and €920m (representing growth of between 23.5% and 26%) and adjusted EBITDA between €157m and €167m (up between 24.8% and 32.8%).