Genius Sports saw its revenue increase 29.3% year-on-year in Q3 2023, from $78.7m to $101.7m.
Of the total revenue, the majority (64.8%) came from the firm’s Betting Technology, Content and Services division, which delivered $65.9m in revenue amid 34.1% year-on-year growth.
Revenue from the Media Technology, Content and Services division grew by 27.9%, meanwhile, to $22.9m, while the Sports Technology and Services division delivered a further $12.9m, up 11.3%.
Adjusted EBITDA for the quarter came to $17.7m, up 131.1% from Q3 2022’s EBITDA of $7.7m, as the group’s adjusted EBITDA margin grew significantly from 9.7% to 17.4%.
However, the company still delivered a net loss of $11.6m, compared to a $9m net loss in the same period last year.
Those figures brought the company’s earnings in the first nine months of 2023 to $285.8m in revenue, up 21.3% year-on-year, and $41.4m in adjusted EBITDA, up 215.3%.
Total net loss for the first three quarters equalled $47.1m, down from a $53.9m net loss in the same period of 2022.
Key events and commentary
“Our consistent outperformance reflects the execution of our core strategy as we continue to develop and distribute innovative technology across the sports ecosystem, enabling success for our partners, and further solidifying our long-term strategic position,” said Genius Sports co-founder and CEO Mark Locke.
CFO Nick Taylor added: “We have reached a critical turning point in our business as we have realised consistent margin expansion in each quarter this year and now have much higher visibility into our long-term model following the renewals and extensions of key rights partnerships.”
During Q3 the company made several advancements including the launch of its new sports betting product BetVision, and the signing of a new partnership with Snap to power “immersive AR experiences with NFL data”.
The company also developed the first official Rugby World Cup fantasy game, was awarded a provisional gaming licence in Nebraska, extended its partnership with Brazil’s National Basketball League and partnered with the Ryder Cup to launch interactive gamification hub the Ryder Cup Game Zone.
Following the end of the reporting period, Genius expanded its partnership with the NFL to power on-screen graphic overlays and visualisations on its NFL+ exclusive streaming platform.
It also signed a new partnership with Premier League Productions “to deliver an enhanced live broadcast with rich tracking data insights and data-driven augmentations.”
The group expects to generate full-year revenue of around $412m in 2023, with adjusted EBITDA of around $53m.
It has also reaffirmed its expectation to generate positive free cash-flow in the second half of the year.
As of the end of Q3, the company held cash and cash equivalents of $92m.
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.
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.
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.
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.
Genius Sports exceeded previously issued earnings guidance in Q1 2023, and has adjusted its full-year revenue and adjusted EBITDA expectations accordingly.
Group revenue came in at $97.2m in Q1, up 13.2% year-on-year, or 19.1% on a constant currency basis.
That saw the business exceed its previously stated quarterly revenue guidance of $92m by some 5.4%.
Adjusted EBITDA for the quarter totalled $8m, well ahead of previously stated guidance of $3m and a significant improvement on the $2.9m adjusted EBITDA loss reported in Q1 2022.
Still, the business posted a net loss of $25.2m for the quarter, down some 37.4% compared to the $40.2m net loss registered in Q1 2022.
Genius Sports CEO Mark Locke (pictured) said: “2023 is the year in which Genius expects to significantly accelerate group adjusted EBITDA profitability and rapidly expand margins.
“Our first quarter results demonstrate the operating leverage of our business model, built to benefit from positive industry trends and support sustainable, profitable growth.”
Although the business has outperformed expectations and recorded significant growth across the group, its betting technology, content and services division was the only one of its three business segments to grow year-on-year.
Growth in that segment was driven by new customer acquisitions and growth among existing customers, as a result of price increases on contract renewals and renegotiations, Genius said.
In addition, growth in the betting technology segment was driven by a higher volume of total bets placed and increased in-play betting driving higher operator margins.
Those factors have helped to generate increased revenue for Genius while generating minimal or no additional costs.
Negative growth in the media technology, content and services segment was caused by lower advertising spend by its clients relative to the prior-year comparative period.
The sports technology and services segment suffered, meanwhile, due to lower revenues from non-cash consideration contracts.
Still, the business achieved significant highlights in Q1 including expanding its partnership with the NBA, launching a suite of NFL free-to-play interactive games to help grow the league’s international fanbase, and introducing its Genius Marketing Suite fan engagement engine.
Analysts at strategic advisory firm Regulus Partners suggested that Genius is “finally” leveraging the value of the exclusive rights it holds in several professional sports leagues, putting the business “within touching distance of real profitability.”
Now, it added, Genius should seek to capitalise further on those rights by “showing to stakeholders how they are adding value to sports rights over and above” the core benefits of providing official data.
It suggested Genius should do this by further developing the ways in which sports data can be used by operators, which “could unlock the secret to making mass market betting customers become more engaged in a sustainable manner and growing the segment.”
Senior equity analyst for JMP Securities, Jordan Bender, asked management on today’s earnings call to clarify whether Genius’ US operations had been EBITDA positive during the quarter.
In response, CFO Nick Taylor explained that it’s difficult for Genius to provide geographical breakdowns of its revenue and earnings because many of its rights contracts are agreed on a multi-national basis.
With that said, Taylor added that the quarter was not EBITDA positive in the US, but that “the losses that we’ve found in the US have certainly got less and will continue to reduce through 2023″.
“I said at the year-end that we’ll be looking at around a single-digit EBITDA loss in the US for 2023, which is considerably better than it was in 2022, and I expect that to continue to progress to a breakeven and positive position for 2024,” he concluded.
Current trading and outlook
Genius Sports has increased its revenue guidance for the full year 2023, from $391m to $400m.
Group adjusted EBITDA for the year is now expected to come in at $49m, up from previously issued guidance of $41m, on an EBITDA margin of 12%, revised upwards from 10%.
Sportradar has opened a new office in Mumbai and appointed Prasun Bhadani as general manager of India.
Bhadani holds extensive experience in sports marketing, having managed prominent Indian Premier League (IPL) cricketers such as MS Dhoni and Bhuvaneshwar Kumar, while working as head of sales, marketing and talent for the Rhiti Group of Companies.
Bhadani has also worked with brands through RISE Worldwide’s sports marketing services, managing sports-related brand campaigns and sponsorship agreements.
He was also a co-founder of Rubicube Gaming, which operates the PokerStreet online poker platform in India.
In his new role at Sportradar, Bhadani will be tasked with supporting the company’s strategy in the region, by strengthening client relationships as well as forging new partnerships across key business verticals.
Sportradar general manager of India Prasun Bhadani: “India has a rich sporting culture and sports fans here have deep passion and enthusiasm. It is an exciting time for a sports technology company like ours to be at the centre of the action.”
Bhadani will report directly to the company’s managing director for APAC, Oscar Brodkin.
“India has a rich sporting culture and sports fans here have deep passion and enthusiasm,” Bhadani commented.
“It is an exciting time for a sports technology company like ours to be at the centre of the action. I look forward to supporting Sportradar in its goal to continue innovating the sports industry through impactful technological solutions.”
Brodkin added: “India is a key market and will contribute significantly to our overall growth in the Asia Pacific region.
“Prasun has the experience and ability to help us achieve our business objectives in India and at the same time prioritise the delivery of quality service and value to our partners.”
Sportradar’s Indian ambitions
Sportradar commented that India’s sports industry has grown exponentially over the past decade, with support from both the government and private sectors.
With the nation’s passion for sports, more business opportunities are set to be unlocked in the region, it added, “especially through the further application of sports technology and the commercialisation of rights for sport leagues.”
The company already works with several leading Indian football leagues and state cricket associations, as well as the Board of Control for Cricket in India, to safeguard the integrity of both the IPL and the Women’s Premier League (WPL).
Sports betting in India
According to figures published in the Waterhouse VC March update, India’s online betting market is growing at a rate of over 20% per year, thanks to the more than 370 million bettors in the country.
Cricket wagering alone is estimated to be worth $150bn in the country already, with some 85% of Indian bettors placing bets on the sport.
At present, only three Indian states have officially legalised wagering: Daman, Goa and Sikkim.
India’s Information Technology Act (2000) does not prohibit online wagering activities and the country’s original wagering legislation, the Public Gaming Act (1867), long predates online wagering, meaning the legal status of betting in India remains grey.
In recognition of the potential tax revenue that sports betting could generate, however, India’s government is considering a new gambling bill to replace the Public Gaming Act, according to Waterhouse VC.
In October last year, it was revealed that ISPs in India had blocked access to several iGaming websites under orders from the Ministry of Electronics and Information Technology (MEITY).
The blocked websites included Curacao-licensed betting exchange Fairplay, Cyprus-headquartered Parimatch and Super Group-owned Betway.
Sportradar registered impressive growth across all business segments throughout 2022 during its first full year of trading as a public company.
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.
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.”
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.”
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%).
Israeli sports data supplier LSports has acquired Polish data company Statscore in a multi-million euro deal.
The acquisition will strengthen LSports’ data collection capabilities by adding a fully established data centre covering more than 30 sports to the business, it said.
Specific details of the deal were not disclosed, but the acquisition is thought to have cost somewhere in the region of several million euros.
It marks the first European acquisition undertaken by LSports, and is expected to provide it with expansion opportunities in several global regions, including the US, Latam and Asia.
The deal will significantly increase LSports’ sports data product portfolio and allow it to create unique and personalised content for the first time in its history, the supplier said.
At present, LSports tracks more than 175,000 pre-match and 100,000 in-play events each month, and is the exclusive data rights holder for several lesser-known sports and leagues, including the American Ultimate Disc League, American Football Flag League and Brazilian Basketball Confederation.
LSports co-founder and CEO Dotan Lazar: “Our goal is to double the company in all aspects in a very short period.”
Statscore provides sports data and statistics in the form of widgets, mini-sites and feeds, and employs a global team of data scouts covering more than 10,000 live events per month.
The firm holds data rights for several sports leagues across Europe, including in Poland, Slovenia, Belgium and the Czech Republic.
Commenting on the acquisition, LSports co-founder and CEO Dotan Lazar said: “We have full confidence in Statscore’s products and its people. Our goal is to produce technology-based, in-depth content.
“I believe the acquisition of Statscore will lead us to new heights, more B2B products, personalisation, and data validation tools that will bring our accuracy level to 100%. Our goal is to double the company in all aspects in a very short period.”
Statscore COO Dariusz Łęczyński added: “LSports joining forces with Statscore is nothing but a natural move. To us, it looked like a matter of time as we have been successful partners for a very long time now. Similar visions, yet different approaches to the products and data collection made each company unique.
“This spectacular potential created with the synergy has a chance to explode once combined together. I am convinced that the first impressive effects will be deployed sooner than anyone can think.”
Sportradar has been awarded a sub-licence to provide Football DataCo (FDC) data following the settlement of a lawsuit filed by the supplier against its competitor Genius Sports.
FDC represents the data rights of the professional football leagues in England and Scotland; the Premier League, English Football League and Scottish Professional Football League.
Genius has held the exclusive rights to low-latency data from those leagues since signing an agreement with FDC in May 2019.
Following the settlement of the case earlier this week, Genius will retain the exclusive rights to the low-latency data but has ceded a sub-licence to Sportradar for a delayed data feed, lasting until 2024, to be marketed as the Official FDC Secondary Feed.
The settlement marks the end of a legal battle which saw Sportradar challenge Genius for not allowing a sub-licensing deal, which it argued went against competition laws.
After the initial complaint was filed in 2020, Genius Sports attempted to counter-sue Sportradar for dispatching ‘data scouts’ to attend matches and relay data back to Sportradar for the purpose of facilitating in-play betting in real time.
Genius contested the practice as it had been selected as the exclusive collector and distributor of official data from those games.
A joint statement released by Sportradar, Genius Sports and FDC confirmed that following the settlement and Sportradar’s securing of a sub-licence for the data, Sportradar will cease sending data scouts to FDC-represented matches.
No further details of the settlement have been revealed.
In related news, Sportradar today (11 October) signed a new agreement with affiliate XLMedia to be the firm’s official sports data provider through the provision of a range of digital products and services.
XLMedia will use the firm’s real-time sports data products for North American and international sports properties across its digital sports brands, including SportsBettingDime, EliteSportsNY and Canadian Sports Betting.
Sportradar still holds exclusive data rights with both the NBA and the International Hockey Federation.
It also retains a significant hand in international football, with exclusive rights to betting data from UEFA competitions including the Champions League.