genius sports

Genius sees clear path to NYSE profitability following strong H1

Genius Sports has exceeded its H1 trading expectations, prompting the firm to upgrade its guidance for the remainder of 2023 and project full year revenue of $410m.

Publishing its interim H1 trading results, the NYSE sportstech and data provider reported revenue of $184.1m for the first six months of the year, a 17% increase from $157m in 2022.

The company also outlined that it has made further progress regarding profitability, having cut its net loss down again by 21% to $35.5m (H1 2022: $44.9m), whist adjusted EBITDA surged by 333% from $5.5m to $27.7m, with an uptick in margin of 9.4% to 12.9% (3.5).

From a product perspective, the group’s betting technology, content and services division recorded the biggest revenue growth rate of 28.6% to $121.6m ($94.5m), whilst media technology, content and services income rose 2.5% to $40.1m.

In contrast, Genius’ sports technology and services unit registered a loss of 4.3% from $23.4m to $22.4m, although this has overall not impacted the group’s total revenue for the first half of the year.

As a result, Genius anticipates that revenue will reach $100 in Q3, $126m in Q4 and $410 for the full year, with respective adjusted EBITDA rates of $17m, $11m and $52m.

“We enter the second half of 2023 having reached a significant inflection point in our business,“ said Mark Locke, Genius Sports Co-Founder and CEO. 

“Following the financial outperformance in the first half of the year and the recently renewed partnerships with FDC and the NFL, we have validated our core strategy, differentiated our technology stack, and proven our sustainable business model.”

Meanwhile, group revenue for the second quarter stood at $86.4m (Q2 2022: $77.1m), representing a growth rate of 22.1%, with the net loss reduced by a significant 116.6% to $10.3m ($4.8m) and adjusted EBITDA increased by 87.2% to $15.6m ($8.4m) with a margin of 18% (11.8).

Betting technology, content and services once again proved to be the biggest driver of growth as revenue increased 26.8% to $56.9m ($44.9m), although media, technology and content followed not far behind with growth of 22.4% to $18.4m ($15m). 

Sports technology and services also performed better in the quarter than in the first half as a whole, with revenue improving 3% from Q2 2022 to $11.6m ($11.3m).

Genius attributed the leading performance of the tech, content and services division in Q2 to heavier use of event content by customers and continued growth with the firms’ existing customers.

Meanwhile, growth in the Americas – specifically regarding demand for programmatic advertising services – was given as the reason for media technology’s performance, whilst the marginal growth for sports tech and services was attributed to higher revenues from non-cash consideration contracts.

Specific business highlights for the company during the quarter include those highlighted by Locke, with Genius long-term NFL partnership until the 2027/28 season marked as providing a bedrock for further growth.

Back in its home territory of European sports, Genius signed a partnership with UK football data rights holder Football DataCo, encompassing the Premier League, English Football League (EFL) and Scottish Premier Football League (SPFL). 

Further European developments included an expansion of its integrity partnership with the German Football Association (DFB), whilst further afield the group has added digital features for the ongoing FIFA Women’s World Cup, taking place in Australia and New Zealand.

Locke concluded: “The ongoing success through the second quarter perfectly demonstrates our balanced approach in delivering near-term results, while accelerating Genius towards our long-term growth and profit targets.”

Entering H2, Genius expects to generate Group Revenue of approximately $410m and Group Adjusted EBITDA of approximately $52m for the full year of 2023 as leadership anticipates reaching a significant milestone of generating “sustainable free-cash-flow in the second half of the year” from its business activities.

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