Sportradar upgrades 2022 guidance as CFO Gersh departs

Sportradar AG has upgraded its year guidance, forecasting full-year revenues in the new range of €695-to-€715m – representing a prospective growth of 24% over fiscal 2021 results.

The Nasdaq-listed Sportstech group capitalised heavily on US market expansion during 2022, as Q2 revenues across all segments continue to grow, albeit with rising costs and expenses. 

Headline results saw Sportradar record revenue of €177.2m, a 23% increase on the previous year (€143.6m), although increased expenditure saw adjusted EBITDA drop by 13% to €27.6m (€31.6m), with a margin of 16% (22%).

A breakdown of costs showcased the burdens of enhanced international activity, as purchased services and licences during Q2 rose by 32% to €43.2m (€32.6m), alongside an increased employee headcount to 3,520 which drove personal expenses up by 37% to €64.4m (€46.8m). 

“As the world’s leading provider of technology solutions to the sports betting industry, our Q2 revenue exceeded our expectations for the quarter, growing 23% year-over-year,” said Sportradar CEO Carsten Koerl.

“Confident about the momentum we have built in our business, we are raising our revenue guidance for the year.”

Sportradar maintains faith in its future prospects as revenue rose across its two primary segments of RoW Betting and RoW Audiovisual in Q2 – recording growth rates of 21% and 9% respectively.

For the former, quarterly income stood at €95.5m (€75.5m), attributed to increased sales of the firm’s Managed Betting Services (MBS) and Live Odds Services. The segments achieved growth rates of 65% and 9% each to €32.9m and €28.5m, against 2021 comparatives of €11.6m and €26m.

However, despite a revenue uptick, Sportradar’s RoW Betting segment also saw EBITDA drag due to operational costs – in particular continued post-COVID costs as well as acquisitions of new sports rights such as UEFA, the ATP and NHL, which drove expenses up by 39.5% to €48.7m (€34.9m).

RoW Betting EBITDA dropped from 59% to 45% as a result of these costs, but RoW Audiovisual performed much better in this regard, recording an EBITDA increase of 33% (29%), with lower sports rights costs cited as a key reason. 

Revenue for this division increased by 9% to €39.7m (€36.2m), attributed to an influx of new customers coupled with the operations of Synergy Sports – acquired in March 2021 – although the group asserts that earnings were somewhat offset for both Betting and Audiovisual by the Russian invasion of Ukraine. 

Having achieved headline growth across its product verticals as well as a strong performance in the US – where betting service sales and Synergy Sports’ operations drove revenue growth of 66% to €29.1m (€9.9m) – Sportradar has decided to pay off half its outstanding debt.

Korel explained: “Given our strong cash flow generation and demonstrated good stewards of our capital, we have also chosen to pay down about half of our outstanding debt. We remain as confident as ever in the leverage and scalability of our business, and our ability to deliver results in the face of global challenges and economic conditions.”

Consolidated statements saw  H1 costs reported at €156m up 30% on corresponding interim 2021 outgoings of €120m. H1 costs were primarily attributed to personnel expenses totalling €116m.

In addition, the Q2 period accounted for the respective net foreign currency gain of €18m that provided a €28m benefit overall during first-half trading.

A further breakdown of expenses saw Sportradar reward an H1 share-based compensation of €12.5m, of which €8.7m was allocated during the Q2 period.

Closing its Q2 financial statement, Sportradar declared operating profits of €22m as year-to-date net income stands at €33m (H12021: €25m).

In a corresponding announcement, Sportradar disclosed that it had begun an executive search for a Group CFO, following confirmation that Alex Gersh had decided to leave the company to work on a new US opportunity. 

“I appreciate Alex’s many contributions to Sportradar and invite you to join me in wishing him well as he embarks on his next chapter.” –  Koerl informed investors. 

“We have launched a search for a new CFO, and have named Ulrich Harmuth as interim CFO. Ulrich, who has been with the company since 2013, has served as Chief Strategy Officer since 2020 and has been a member of my management team overseeing corporate development activities, including M&A, strategic partnerships, and ventures. I am confident in Ulrich’s leadership to support Sportradar’s growth and the continued execution of our financial priorities.”