Sportradar strikes US profit for first time in Q3 and raises full-year revenue guidance
Sportradar has reported a 31% year-on-year rise in revenue to €178.8m and a 75% increase in adjusted EBITDA to €36.5m for Q3 2022. Year-to-date revenue is now up 28% on 2021.
The major takeaway for Sportradar is that it reached profitability in the US during Q3 for the first time since becoming a Nasdaq-listed company. Adjusted EBITDA from the US soared by 152% to reach €3.4m, up from a €6.6m loss in the same period of last year. The adjusted EBITDA margin came in at 11%, compared to an EBITDA loss equal to 34% of revenue in Q3 2021.
The profits were driven by a 61% uptick in US revenue to €31.6m. CEO Carsten Koerl hailed the firm’s long-term partnership with US sports betting market leader FanDuel. He said: “We are proud of the continuous success of our US operations. We managed to generate a US profit for the first time in the third quarter, displaying solid operational leverage in the business model.
“Underpinning this success is the extension of our long-term partnership with FanDuel. This partnership is a testimony for our strategy, to expand our relationships and become an embedded technology provider for our customers, based on strategic long-term deals with our league partners,” he added.
The two companies have signed a long-term NBA data agreement through to 2031. Koerl wants to use the FanDuel deal as the blueprint for the business outside of the US.
Sportradar CEO Carsten Koerl: “For the first time ever, we can use tracking data to create attractive player proposition bets to help our clients have more parlays in running, which is consistent with our strategy to convert pre-match bets into live bets.”
Is this US profit sustainable going forwards or is it a result of the US sporting calendar? The question came from Ryan Sigdahl, senior research analyst at Craig-Hallum Capital Group.
In response, Koerl said: “We see profitability in the US segment is mainly driven by what we can convert from pre-match into live betting.” The supplier currently has a 15% to 35% share of live betting depending on the sport. NFL is the weakest, while NHL is the strongest.
“This trend is giving us great confidence and we have continued to reduce the losses and reach profitability. Because of that, we are optimistic and confident in this outlook,” he added.
Current trading and forecast
Strong quarterly performance and seasonality benefits have led to increased full-year revenue guidance from Sportradar. It now expects to generate 2022 revenue of between €718m and €723m, compared to prior estimates of €695m to €715m. This would represent annual revenue growth of between 28% and 29%.
The data provider has also narrowed its full-year EBITDA guidance to between €124m and €127m, compared to previous forecasts between €123m and €133m.
Investors reacted positively to the upgraded guidance and US profitability.