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Sportradar Group AG announced today its financial results for the first quarter of 2023. The company is a global leader in technology focused on enabling sports engagement through business-to-business services to the global sports betting market.
First Quarter 2023 Highlights
The revenue in the first three months of 2023 increased by 24%, to EUR207.6 millions ($226.2million)1 as compared to the first three months of 2022.
The RoW Betting Segment, which accounts for 52%, saw a 25% increase in revenue to EUR108.5 Million ($118.3 Million)1. This was mainly due to the strong performance of Managed Betting Services and Live Odds.
The U.S. segment’s revenue increased by 55%, to EUR39.7m ($43.3m)1 in the first quarter 2022. This was due to higher sales of betting and digital advertising products (ad:s). The U.S. Segment generated positive AdjustedEBITDA2 for a third consecutive quarter, with an AdjustedEBITDA2 Margin of 17%.
The total profit for the first three months of 2023 was EUR6.8m, compared to EUR8.2m for the same period last year. The company’s adjusted EBITDA2 for the first three months of 2023 increased by 37%, to EUR36.7m ($40.0m)1. This is a result of higher revenues despite an increase in investment into Artificial Intelligence, Computer Vision, and liquidity trading.
The adjusted EBITDA margin2 in the first quarter 2023 was 18%, a 176-bps increase compared to the previous year period.
The Adjusted Cash Flow2 for the first quarter 2023 was EUR12.4 Million, compared to EUR12.9 Million in the previous year. This is due to an improved working capital management, offset by a negative impact of foreign currency exchange rates. Cash Flow conversion2 in the quarter was 34%.
The Net Retention Rate (NRR) of the Company’s customers was 120% during the first quarter 2023. This is an improvement from the NRR of 119% in the fourth quarter 2022.
Carsten Koerl is the Chief Executive Officer of Sportradar. He said: “We began fiscal 2023 with a solid foundation, as we delivered strong top-line growth. This was primarily due to our growth of value-add products, such as MBS, Live Odds, in the rest of world business and our strong, profitable growth in U.S. We also demonstrate operational leverage, as we continue to focus our attention on cost discipline and prudently invest to grow the top line. “We are confident that the ongoing innovation of our products in AI and computer-vision will allow us to be a leader on the market and increase shareholder value.”
Key Financial Measures
Change in millions of Euros Q1 Q1 Change
2023 2022 %
Revenue 207.6 166.7 24 %
Adjusted EBITDA2 36.7 26.7 37 %
Adjusted EBITDA margin2 18 % 16 % –
Adjusted Free Cash Flow2 12.4 12.9 (4 %)
Cash Flow Conversion2 –
Segment Information
RoW Betting
Segment revenue increased by 25 percent to EUR108.5 millions in the first three months of 2023 compared to the first quarter 2022. This growth was mainly driven by the Company’s more value-added offerings, including MBS which grew 40% to EUR37.1 millions and Live Odds which grew 29%.
Segment adjusted EBITDA2 increased by 6% in the first three months of 2023 to EUR 47.4 million, compared to the first three months of 2022. Segment adjusted EBITDA margin2 fell to 44%, from 51%, in the first quarter 2022. This is due to an increase in investment in AI technologies for MTS and Computer Vision. These investments will allow the Company to grow its revenue and increase its Adjusted EBITDA Margin over time.
RoW Audiovisual
Segment revenue decreased by 3% in the first three months of 2023 to EUR44.6m compared to the first three months of 2022. The expected completion of the Tennis Australia Contract partially offset growth in sales from new and existing clients.
Segment adjusted EBITDA2 increased by 27% in the first three months of 2023 to EUR11.3 millions compared to the first quarter 2022. Segment Adjusted EBITDA Margin2 increased to 25% in first quarter 2023 from 19% in first quarter 2022, due to savings associated to the completion of Tennis Australia contract.
United States
Segment revenues in the first three months of 2023 grew by 55%, to EUR39.7m ($43.3m)1 as compared to the first three months of 2022. The growth of core betting data and ad:s products drove the results.
Segment Adjusted Earnings per Share (EBITDA2) in the first three months of 2023 were EUR6.8 ($7.4million)1, compared to a loss of EUR6.4 million in the same period of 2022. The third consecutive quarter of positive Adjusted Earnings2 indicates the strength of the U.S. Business Model despite constant investments. Segment adjusted EBITDA margin23 improved to 17% compared to (25%) in the first quarter 2022.
Costs and Expenses
The first quarter 2023 saw a significant increase in services and licenses purchased, from EUR11.6 to EUR48.4 millions, compared to the first quarter 2022. This was due in part, because of the continued investment in content creation and increased event coverage, as well as higher scouting expenses. Sports rights accounted for approximately EUR14.0m of the total services and licenses purchased.
Personnel costs in the first three months of 2023 grew by EUR25,2 million to EUR77.5 millions compared to the first three months of 2022. The main reason for the increase was an increased investment in growth, which was driven primarily by increased headcount as a result from investments in AI and Computer Vision. Also, share-based compensation and inflationary adjustments were made for labor costs.
The first quarter 2023 saw an increase of EUR1.7 million in other operating expenses, to EUR21.2 millions, as compared to the first quarter 2022. This was mainly due higher software licensing costs, increased audit fees, and the implementation of a new financial system.
Total sports rights costs decreased from EUR2.8 million in the first three months of 2022 to EUR51.2 millions, mainly due to the completion of the Tennis Australia Contract.
Recent Company Highlights
SportradarSportradar has renewed its partnership the Big Ten Network and extended its partnership with Big 10 Conference in order to expand its footprint into the U.S. College space by powering B1G+’s OTT platform through the 2024-2025 season of college athletics. Sportradar will provide its data-driven OTT technology to manage B1G+’s OTT web and mobile apps, UX/UI and third party integration.
Sportradar has announced that its ad-s technology will be integrated into Snapchat. This integration creates a new channel through which betting operators can engage with and acquire customers via the paid social media advertising services of the Company. Snapchat’s age and location targeting features allow betting operators to reach the 350 million daily active Snapchat users as well as over 750 millions monthly active Snapchat users.
Sportradar won the bid for global Association of Tennis Professionals data and streaming rights beginning in 2024, due to the company’s commitment towards product innovation. Sportradar has the largest reach for tennis fans worldwide and is a provider of official ATP Tour data and Challenger Tour second data feeds.
Sportradar has published its first Sustainability Report, highlighting the company’s commitment to sustainability in its business and communities. The report is based upon Sportradar’s five sustainability priorities: sustainability, people and oversight, respect, and technology-led. These are aligned to the standards and framework set forth by the Sustainability Accounting Standards Board.
Sportradar Integrity Services published its second annual report on betting corruption and match-fixing in 2022. The Company revealed that it had identified 1,212 suspect matches across 12 sports, in 92 different countries, which is a 34% increase year over year. Overall, 99.5% sporting events were free of match-fixing. No single sport had a suspicious match rate greater than 1%.
Sportradar has named Gerard Griffin, a technology executive, as its Chief Financial Officer. This will take effect on May 9, 2023. Mr Griffin was previously the CFO at Zynga Inc. a global leader of interactive entertainment. He will now be responsible for Sportradar’s accounting, finance, and investor relations functions. Mr. Griffin has more than 25 years’ experience in the areas of financial and operational management, particularly within the gaming and media sectors.
Annual Financial Outlook
Sportradar has reaffirmed the outlook it provided on March 15th, 2023 for revenue and Adjusted Earnings per Share2 (EBITDA2) for fiscal 2023.
Sportradar’s revenue for fiscal year 2023 is expected to range between EUR902.0 and EUR920.0 millions ($983.2 to $102.8 million), representing a growth of 24 to 26 percent over fiscal 2022.
The adjusted EBITDA2 range is expected to be between EUR157.0 and EUR167.0 millions ($171.1 to $182.0)1. This represents a 25% to 33% increase compared to last year.
Expected adjusted EBITDA margin2 to range between 17% and 18%.
