Sportradar announces strong growth in the first quarter of 2022
Sportradar has announced the financial results for its first quarter ended March 31, 2022.
First Quarter 2022 Highlights
- Revenue for the first quarter of 2022 increased 31% to $186.4 million from the first quarter of 2021, driven by strong growth across all business segments. In particular, revenue from the US segment increased by 124% to €25.7 million ($28.5 million) compared to the first quarter of 2021.
- Adjusted EBITDA in the first quarter of 2022 decreased 5% to $29.6 million compared to the first quarter of 2021, primarily due to higher costs associated with being a public company as well as the reversal of certain temporary cost savings related to COVID-19 compared to the first quarter of 2021.
- Adjusted EBITDA2 margin was 16% in the first quarter of 2022, compared to 22% in the corresponding period of the prior year.
- Adjusted Free Cash Flow2 in the first quarter of 2022 increased by 100% to €12.9 million, compared to the same period of the previous year. The resulting free cash flow conversion2 was 48% in the quarter.
- Strong net retention rate2, based on the last twelve months, increased to 121% at the end of the first quarter of 2022, compared to 107% at the same period in 2021, underlining the continued success of the cross-selling and up-selling strategy incentive of the company in its global market. customer base.
- Cash and cash equivalents amounted to €715.5 million as of March 31, 2022. Total available liquidity as of March 31, 2022, including undrawn credit lines, was €825.5 million .
- The Company reiterated its previously provided full year 2022 outlook for revenue and Adjusted EBITDA2. Please see the “Annual Financial Outlook” section of this press release for further details.
“Our 2022 fiscal year is off to a fast start, with high-margin core betting products driving growth around the world,” says Carsten Koerl, managing director of Sportradar. “Our business in the United States continues its tremendous growth story as more states legalize and sports betting becomes live mainstream entertainment. As a market leader, our technology and information based on data continues to transform the converging media, entertainment and sports industries and fuels our story of consistent, long-term profitable growth.
- Row betting
- Segment revenue in the first quarter of 2022 increased by 25% to €86.7 million compared to the first quarter of 2021. This growth was mainly due to increased sales of our higher value offerings added, notably managed betting services (MBS) which increased by 51%. to €26.4 million and Live Data/Odds Services, which increased by 16% to €46.8 million. MBS growth was driven by increased revenue and Live Data/Odds services grew due to upselling content to existing customers. MBS includes Managed Trading Services (MTS) and Managed Platform Services (MPS). Additionally, increased content sales resulting from the Synergy acquisition contributed to the growth.
- Segment2 Adjusted EBITDA in Q1 2022 increased by 13% to €44.6 million compared to Q1 2021. Segment2 Adjusted EBITDA margin decreased to 51% from 57% in Q1 2021 , due to temporary savings in sports rights and prior year scouting fees related to the COVID-19 pandemic as well as the acquisition of new sports rights.
- RoW Audiovisual (AV)
- Segment revenue increased by 17% to €45.9 million in the first quarter of 2022 compared to the first quarter of 2021. This growth was mainly due to increased content from Tennis Australia and the National League of hockey (NHL) as well as the upselling of content from the Synergy acquisition.
- Segment2 Adjusted EBITDA in the first quarter of 2022 remained stable at €8.9 million compared to the first quarter of 2021. The Segment2 Adjusted EBITDA margin decreased to 19% compared to 23% compared to the first quarter of 2021 , primarily due to higher sports rights costs due to the easing of the COVID-19 pandemic compared to the prior year and the acquisition of new sports rights.
- United States
- Segment revenue in the first quarter of 2022 increased by 124% to €25.7 million compared to the first quarter of 2021. This growth was driven by increased sales of betting services in the United States. States, mainly due to the legalization of betting in new states. We also experienced growth thanks to increased sales to media companies and the positive impact of the acquisition of Synergy Sports.
- Segment2 Adjusted EBITDA in the first quarter of 2022 amounted to (6.4) million euros compared to the first quarter of 2021 of (3.6) million euros, mainly due to the increase in investments in the Company’s league and team solutions business. The segment’s adjusted EBITDA margin2 improved to (25%) from (32%) compared to the first quarter of 2021, reflecting an improvement in the operating leverage of the US segment.
- Costs and expenses
- Personnel expenses in the first quarter of 2022 increased by €13.7 million to €52.3 million compared to the first quarter of 2021, mainly due to additional hiring in the Company’s product and technology organizations at high-cost and low-cost sites. The salaried workforce increased from 620 to 3,075 full-time employees at the end of the first quarter of 2022 compared to the first quarter of 2021.
- Other operating expenses in the first quarter of 2022 increased by €5.0 million to €19.5 million compared to the first quarter of 2021, mainly due to higher costs associated with being a public company and the cancellation of temporary cost savings related to COVID-19 compared to the previous year.
- The total cost of sports rights in the first quarter of 2022 increased by €13.1 million to €54.0 million compared to the first quarter of 2021, mainly due to new rights for 2022 for the ICC, l UEFA, ATP and a standardized schedule in sports such as the NBA, NHL and MLB as COVID-19 pandemic restrictions ease.
- Recent Business Highlights
- In April 2022, Sportradar acquired Vaix, a pioneer in the development of AI solutions for the iGaming industry. Vaix’s innovative artificial intelligence technology allows betting and gaming operators to get a personalized view of their customers, resulting in a more targeted and user-friendly experience for players. Sportradar has already partnered with Vaix and integrated its technology into its Managed Trading Services (MTS) offering. Sportradar’s MTS solution is a sophisticated trading, risk, live odds and liability management offering that helps betting operators increase margins and profits, while increasing efficiency and managing risk .
- Sportradar has obtained provider registration for online/mobile betting in Ontario. With this registration for Online/Mobile Betting from the Alcohol and Gaming Commission of Ontario, Sportradar now holds over 36 licenses in North America in states, territories, tribes and Canada. Additionally, Sportradar Integrity Services and the Canadian Hockey League announced a multi-year betting education and monitoring services agreement. This new relationship expands Sportradar Integrity Services’ portfolio of ice hockey partners to nine different leagues and federations around the world and strengthens its leadership position in North American sports leagues.
- The company continued to strengthen its leadership in the United States by appointing former Fiserv executive Michael Gandolfo as Group Head, Regional Sales. Gandolfo led Fiserv’s large financial institution sales and service team, responsible for over 300 top-tier financial institutional clients.
- Norwegian state-owned gaming operator, Norsk Tipping, will roll out Sportradar’s self-service betting terminal (iSSBT) to 245 outlets across Norway to support the gaming operator’s growth. iSSBT is deployed in over 500 outlets, enabling Norsk Tipping to establish a mobile and online digital strategy, as well as a retail presence.
- Sportradar continued its mission to detect, investigate and prevent betting-related match-fixing, doping and other threats to sports integrity by announcing a multi-year integrity partnership with NASCAR, an extension of a previous agreement to provide betting monitoring and reporting with its Universal Fraud Detection System (UFDS), launching a Sportradar Integrity Exchange, a network that allows bookmakers to report suspicious betting activity and expanding its work with law enforcement Austrian federal criminal law on the fight against doping.
- The company also announced that it will act as an advisor to Bowl Season on the sports betting space in a responsible manner, with a focus on educating members of the organization about the rapidly changing world of betting. athletes, as well as the possibility of expanding the scope to include Sportradar’s integrity services.
Annual financial outlook
Sportradar reiterates its outlook for the 2022 financial year communicated as of March 30, 2022 as follows:
- Revenue is expected to be between $738.2 million and $777.0 million, representing growth of 18% to 25% from fiscal 2021.
- Adjusted EBITDA2 is expected to be between $136.5 million and $147.6 million, which represents growth of 21% to 30% compared to fiscal 2021.
- Adjusted EBITDA margin2 is expected to be between 18.5% and 19.0%, an improvement over the prior year.
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