Sportradar reports fourth quarter and full year 2023 results

Revenue for the full year of 2023 increased 20 per cent to €877.6m in year-on-year terms.

Press release.- Sportradar has today announced financial results for its fourth quarter and year ended December 31, 2023.

Carsten Koerl, chief executive officer of Sportradar, said: “2023 was another dynamic and successful year for the Company delivering our 3rd consecutive year of more than 20 per cent revenue growth, improved profitability, and margin expansion. We are pleased with our growth momentum, fueled by our best-in-class content portfolio, innovative product roadmap and technology capabilities. 

“For 2024, we plan to continue to scale our business globally, targeting at least 20 per cent growth in revenue and adjusted EBITDA. Given our market leadership and confidence in the long-term profitability and cashflow outlook for the Company, we have authorized a $200m share buyback program. We remain laser-focused on disciplined execution of our growth strategy and delivering tremendous value for our clients and our shareholders.”

Full year 2023 and recent highlights, annual outlook

• Revenue for the full year of 2023 increased 20 per cent to €877.6m compared with the prior year, driven by 20 per cent growth from Rest of World Betting and 30 per cent growth from the U.S. Full year revenue was at the upper end of the Company’s 2023 annual outlook range of €870.0m to €880.0m.
• Total profit from continuing operations for the full year 2023 was €34.6m compared with €10.5m for the prior year. Adjusted EBITDA1 for the full year of 2023 increased 33 per cent to €166.8m compared with the prior year and was at the upper end of the Company’s 2023 annual outlook range of €162.0 to €167.0m.
• Total Profit from continuing operations, as a percentage of revenue, for the full year 2023 was 4 per cent compared with 1 per cent for the prior year. Adjusted EBITDA margin1 for 2023 increased over 177 bps to 19 per cent compared to 2022, primarily driven by strong operating leverage from sport rights and personnel costs.
• Cash and cash equivalents grew to €277.2m as of December 31, 2023, and total liquidity available for use on December 31, 2023, including undrawn credit facilities was €497.2m.
• Authorized a $200m share buyback program given the confidence in the long-term outlook and ability to generate significant excess capital going forward.
• The Company reiterated that it expects to deliver at least 20 per cent year-over-year growth in revenue and Adjusted EBITDA1 in fiscal 2024. Please see the “Annual Financial Outlook” section of this press release for further details.

Fourth quarter 2023 financial highlights

• Revenue in the fourth quarter of 2023 increased 22 per cent to €252.6m compared with the fourth quarter of 2022 with growth across all segments.
• Total Profit from continuing operations for the fourth quarter of 2023 was €23.2m compared to a loss of €33.3m for the same quarter last year. The Company’s Adjusted EBITDA1 for the same period increased 13 per cent to €39.5m compared with the fourth quarter of 2022, primarily due to strong revenue growth.
• Total Profit from continuing operations, as a percentage of revenue, for the fourth quarter of 2023 was 9 per cent compared with (16 per cent) for the same quarter last year. Adjusted EBITDA margin1 was 16 per cent in the fourth quarter of 2023, compared with 17 per cent in the prior year period.
• The Company’s customer Net Retention Rate1 (NRR) was 111% in the fourth quarter of 2023, demonstrating the Company’s strength in cross selling and upselling to its clients.
• As of December 31, 2023, Sportradar had total liquidity of €497.2m including cash and cash equivalents of €277.2m and an undrawn credit facility of €220.0m.

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1 Non-IFRS financial measure or operating metric; see “Non-IFRS Financial Measures and Operating Metric” and accompanying tables for further explanations and reconciliations of non-IFRS measures to IFRS measures.

Recent company highlights

• Sportradar launched a landmark product suite, ATP Service+, as a result of the Company winning the ATP global betting and media data rights. Sportradar and ATP are now working together to drive the commercial growth of tennis and enhance fan engagement.
• Sportradar entered into agreements with NASCAR, the South American Football Confederation (CONMEBOL) and Bundesliga, Germany’s premiere soccer league, for exclusive global data rights.
• Sportradar extended agreements with BetMGM and Caesars Sportsbook for official NBA data. For the first time, Sportradar will provide these sportsbooks with products and services that leverage NBA optical tracking data as a result of its exclusive partnership with the NBA. This will enable sportsbooks to grow their proposition markets, same-game parlays, as well as in-play betting markets.
• Sportradar was selected by the Taiwan Sports Lottery Company, Ltd. to power its Sports Lottery with a customized omnichannel sportsbook and player management solution. As part of a consortium, Sportradar will operate the Sports Lottery through 2033 using the Company’s ORAKO end-to-end sportsbook and player account management system.
• Alpha Odds, Sportradar’s automated odds recalculation tool, launched delivering an average profit increase of 10 per cent for clients in 2023.
• FanID, which connects rights holders and brands with sports fans launched as the first solution in the market with a data clean room to tackle the demise of third-party cookies.
• Sportradar received several industry recognitions, including Best Live Streaming Supplier at EGR B2B Awards 2023, Marketing & Services Provider of the Year at SBC Awards 2023 and Sports Betting Provider of the Year at Sigma Asia Awards 2023. Additionally, Sportradar was included on Business Insider’s “Leaders in AI 100” list.

Segment Information

RoW Betting

• Segment revenue in the fourth quarter of 2022 increased by 29 per cent to €105.9m compared with the fourth quarter of 2021. This growth was driven primarily by increased sales of the company’s higher value-add offerings including Managed Betting Services (MBS), which increased 83 per cent to €38.3m. MBS growth was attributable to a record MTS annualized turnover3 of over €19.4bn, helped by the FIFA World Cup, and the success of its strategy to move existing customers to higher value add products.
• Segment Adjusted EBITDA2 in the fourth quarter of 2022 increased to €46.3m compared with the fourth quarter of 2021. Segment Adjusted EBITDA margin2 decreased to 44 per cent from 56 per cent in the fourth quarter of 2021 driven by increased investment in AI technology for MTS and Computer Vision technology.

RoW Audiovisual (AV)

• Segment revenue in the fourth quarter of 2022 increased by 17 per cent to €41.8m compared with the fourth quarter of 2021. Growth was driven by cross-selling audiovisual content to existing data customers and expanding AV portfolio sales with existing AV customers.
• Segment Adjusted EBITDA2 in the fourth quarter of 2022 increased 20 per cent to €11.9m compared with the fourth quarter of 2021. Segment Adjusted EBITDA margin2 was 28 per cent in the fourth quarter of 2022 and 2021 as AV revenue growth was offset by higher production and personnel costs.

United States

• Segment revenue in the fourth quarter of 2022 increased by 77 per cent to €41.2m compared with the fourth quarter of 2021. This growth was driven by an increase in cross-selling non-data products to betting operators as well as benefiting from growth in the underlying betting market due to new states legalizing betting.
• Segment Adjusted EBITDA2 in the fourth quarter of 2022 was €4.3m compared with a loss of (€7.6)m in the fourth quarter of 2021, primarily driven by enhanced operating leverage as a result of the growing scale of the business despite continuous investments in the U.S. segment’s products and content portfolio. Segment Adjusted EBITDA margin2 improved to 11 per cent from (33 per cent) compared with the fourth quarter of 2021.

Costs and Expenses

• Purchased services and licenses in the fourth quarter of 2022 increased by €14.9m to €48.4m compared with the fourth quarter of 2021, reflecting continuous investments in content creation, greater event coverage and higher scouting costs. Of the total purchased services and licenses, approximately €10.0m was expensed sports rights.
• Personnel expenses in the fourth quarter of 2022 increased by €34.0m to €81.0m, an increase of 72 per cent compared with the fourth quarter of 2021. The increase was driven by acquisition costs of €9.0m, a one-time cost of €5.0m as a result of management restructuring as well as increased headcount associated with our investments in AI and Computer Vision, and inflationary adjustments for labor costs.
• Other Operating expenses in the fourth quarter of 2022 increased by €7.7m to €34.9m, an increase of 28 per cent, compared with the fourth quarter of 2021 primarily as a result of €13.0m non-recurring litigation costs. Excluding this litigation cost, operating expenses decreased, compared with the fourth quarter of 2021.
• Total sports rights costs in the fourth quarter of 2022 increased by €11.2m to €49.7m compared with the fourth quarter of 2021, primarily a result of newly acquired rights in 2022 for ITF and UEFA, as well as increased sports rights costs related to the NHL.