Sportradar : First Quarter 2025 Earnings Conference Call (sportradar first quarter 2025 earnings conference call)

Published: 2025-05-12 07:05:12 ET SRAD

Published on 05/12/2025 at 07:05

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DELIVERED RECORD PERFORMANCE AND MARGIN EXPANSION

Achieved record quarterly revenue of €311 million, up 17% YoY, grew AEBITDA125%, expanded AEBITDA margin1to 18.9% and generated free cash flow1of €32 million.

Enhanced depth and breadth of sports rights coverage with the extension of MLB partnership through 2032 and announced agreement to acquire IMG ARENA and its global sports betting rights portfolio.

At an inflection point for multi-year margin expansion and cash flow generation, translating to significant value creation for shareholders.

Repurchased $65 million, or 3 million shares, in April as part of the recent secondary offering, bringing total repurchases to date to $86 million under our $200 million share repurchase program.

Guiding to 2025 revenue growth of at least 15%, AEBITDA growth of at least 26%, AEBITDA margin expansion of at least 200 bps, and free cash flow conversion rate1above the 2024 level.

1Non-IFRS financial measure; see the Appendix for defined terms and reconciliations of non-IFRS measures to IFRS measures.

Q1 2025 FINANCIAL HIGHLIGHTS

Strong Execution with Double-Digit Revenue Growth, Margin Expansion & Significant Cash Flow

Free Cash Flow

€32MM

vs. €0MM LY

Revenue

+17%

€311MM

Adjusted EBITDA

+25%

€59MM

Adjusted

Mar

18.

+119

EBITDA

gin

bps

Q1 2025 FINANCIAL HIGHLIGHTS

Net Retent

ion Rate1

vs. 11

6% LY

Free Ca Conve

sh Flow rsion

vs. 0

% LY

1Non-IFRS financial operating metric; see the Appendix for defined terms and reconciliations of non-IFRS measures and operating metric to IFRS measures.

ACHIEVED RECORD QUARTERLY REVENUE

€311

€266

€208

€168

23% CAGR

(€MM)

1Q22 1Q23 1Q24 1Q25

LEAGUES & FEDERATIONS

UNMATCHED BREADTH AND SCALE IN THE GLOBAL SPORTS ECOSYSTEM

BETTING OPERATORS

MEDIA / TECH PARTNERS

~1MM

MATCHES ANNUALLY, COVERING

~ 85 SPORTS

Capitalize on Market Growth

with Our Depth, Breadth, & Scale

Drive Take Rate Including Capturing Additional Share of In-

Play Betting

Expand into Adjacent Markets

with Primary Focus on iGaming

Drive Innovation & Reduce Growth Barriers

by Leveraging Technology & AI

EXPANDING GLOBAL MARKETS PROVIDES STRONG TAILWIND

Global TAM expected to grow at an

11% CAGR

From ~$97≈B to reach

~$131B

by 2027

Global sports betting TAM provides strong tailwind, with GGR

forecast to grow at an 11% CAGR through 2027.

Europe continues to grow strongly with expected CAGR of 9%.

Established a strong position in the U.S., where we cover 3 of the 4 biggest sports leagues, with market forecast to grow at a 23% CAGR.

Established an early foothold in Brazil, with the broader LATAM region expected grow at a 17% CAGR through 2027.

Potential opportunities in APAC longer-term, including Japan, India, Thailand and Sri Lanka.

Source: H2 Gambling Capital data as of Apr 2025: Sports Betting market GGR (excl. horse racing), Omnichannel (Online + Retail)

MOVING CLIENTS DEEPER INTO PRODUCT AND CONTENT VALUE CHAIN INCREASES TAKE RATE

TAKE-RATE

PRE-MATCH DATA & ODDS

LIVE DATA

LIVE ODDS

MANAGED TRADING SERVICES (MTS)

BETTING PLATFORM SOLUTIONS

STREAMING & BETTING

ENGAGEMENT

MARKETING SERVICES

CLIENT VALUE

DRIVING TAKE RATE IN SOCCER THROUGH UNPARALLELED COVERAGE AND ENHANCED PRODUCT OFFERING

UPCOMING PRODUCT LAUNCHES:

4Sight Streaming, Alpha Odds, Virtualized Live Match Tracker

250

In-play

190

Pre-match

150K

Matches

Betting Opportunities

Coverage

SOCCER FAN ENGAGEMENT SOLUTIONS

LEAGUE PARTNERS

Virtualized Live Match Tracker Product

DRIVING TAKE RATE IN BASKETBALL THROUGH DEEPER FAN ENGAGEMENT

LEAGUE PARTNERS

NBA FAN ENGAGEMENT SOLUTIONS

1,800

Player & micro market betting opportunities per match

4Sight Product

50M

Virtualized Live Match Tracker viewing sessions in 1Q 2025

~3.5%

Click-through rate to sportsbook operator from emBET

NEXT GEN PRODUCT OFFERINGS:

4Sight Streaming, Virtualized Live Match Tracker, emBET, Micro and Player Markets

DRIVING REVENUE UPSIDE BY EXTENDING OUR EXISTING MARKETING SERVICES TO ADJACENT iGAMING MARKET

iCASINO SOCIAL CASINO

Cross-selling marketing services into our closest

Momentum in adjacent markets already being established

84 21%

IGAMING OPERATORS

adjacent markets

iGAMING MARKETING

iCasino Brands Receiving Sportradar Marketing Services

Of total Marketing Services revenues

~$10B

TAM

~$2B

SAM

Conducting Brazil test market with strong pipeline established

Source: iGaming Marketing TAM/SAM based on various market sources and Sportradar estimate

~6 yrs

AS REVENUE EXPANDS LONG-TERM SPORTS RIGHTS DEALS PROVIDE STRONG COST VISIBILITY

Average term remaining for select major contracts

Select SRAD Sports Rights Contracts by League (in years)

Disciplined and strategic, with a diverse portfolio of exclusive global sports content, including basketball, baseball, soccer, hockey and tennis.

Secured major sports contracts long term, providing significant visibility on key part of our cost structure.

With MLB, NBA and NHL, have secured 3 of top 4 U.S. sports, representing ~70% of the betting GGR for those sports.

Runway to innovate and grow our product offering driving our product and content ROI.

EXTENDING AND EXPANDING MLB RELATIONSHIP

Extended and expanded partnership 8 years, through the 2032 season.

Now the exclusive distributor MLB's ultra-low latency official data, media content and AV content.

MLB has taken an equity stake in Sportradar, further solidifying this long-term partnership.

Global scale underpins unique ability to help broaden

71M

BMLLB League atatettendance1

MLB's exposure to fans worldwide.

Collaborating on creating AI-driven immersive and hyper-personalized fan experiences.

Extends our integrity Universal Fraud Detection System, global betting monitoring, investigative and educational support.

Sport by global betting GGR2

32M

Tickets processed through MTS1

12024 MTS and U.S. League attendance statistics. 22024 estimate for MLB ranking by H2 Global Capital.

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IMG ARENA TRANSACTION SUMMARY

RIGHTS ACQUIRED

Sportradar has agreed to acquire IMG Arena's portfolio of highly strategic sports betting rights:

Will add depth & breadth in key betting sports including tennis, soccer & basketball.

Includes 14 sports from 70+ global rightsholders.

Covers ~39,000 official data events and ~30,000 streaming events.

Spans 6 continents.

FINANCIAL CONSIDERATION

Will further accelerate revenue, adjusted EBITDA and free cash flow growth, and will be immediately accretive to adjusted EBITDA margin.

IMG Arena will provide financial consideration totaling $225 million, including:

$125 million cash payments to Sportradar, which will be paid over a two year period.

Up to $100 million cash pre-payments to certain sports rightsholders.

Sportradar will not pay any financial consideration to Endeavor.

EXPECTED TIMING

Anticipated closing in the fourth quarter of 2025, subject to required approvals and other customary closing conditions.

IMG ARENA ACQUISITION TO DRIVE GREATER COVERAGE ACROSS ALL METRICS

Approx. 70% of rights spread across top 3 most bet on global sports including basketball, soccer and tennis

Sports

70+

Rightsholders

190+

Competitions

39K

Data Events

30K

Streaming Events

Continents

Will seamlessly integrate into our platform, maximizing monetization and value

Highly complementary portfolio of rights, aligns with our disciplined approach

Will expand footprint and provides significant opportunity in key global markets

Will strengthen strategic relationships with key leagues and sportsbooks

Competitions, Data Events and Streaming Events in 2026

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DELIVERED STRONG REVENUE AND PROFITABILITY

ROW1US

CONSOLIDATED REVENUE (€MM)

311

266

RoW U.S.

▲

17%

28%

72%

25%

75%

Q1 2024 Q1 2025

CONSOLIDATED ADJUSTED EBITDA (€MM)

▲

25%

Q1 2024 Q1 2025

18.9%

17.7%

AEBITDA

margin (%)

KEY QUARTERLY TAKEAWAYS

Achieved record revenue of

€311mm, up 17%, due to strong client spending with U.S. revenues reaching 28% of mix.

Grew Adjusted EBITDA 25% YoY to

€59mm, driven by higher revenue and operating leverage on adjusted personnel, sport rights and other expenses.

Grew Adjusted EBITDA margin to 18.9%, an increase of ~120 basis points YoY, on pace to deliver full year margin expansion of ~200 bps.

1Share of revenue from Rest of World and United States

SUMMARY OF REVENUE TO ADJUSTED EBITDA

(€MM)

Q1 2024

Q1 2025

Revenue

266

311

Sport rights expense

(91)

(104)

Adjusted purchased services1

(35)

(44)

Adjusted personnel expenses1

(70)

(80)

Adjusted other operating expenses1

(23)

(24)

Adjusted EBITDA

Adjusted EBITDA margin (%)

17.7%

18.9%

1Non-IFRS financial measure; see the Appendix for defined terms and reconciliations of non-IFRS measures and operating metric to IFRS measures.

BETTING TECHNOLOGY & SOLUTIONS

REVENUE (€MM)

KEY QUARTERLY TAKEAWAYS

220

▲ 14%

250

Betting Technology and Solutions revenue increased 14% YoY, primarily driven by:

Betting and Gaming Content grew €22 million or 13%, benefiting from customer uptake of additional content and products and U.S. market growth.

Managed Betting Services grew €8 million or 16%, driven by strong growth in Managed Trading Services from increased turnover and higher trading margins.

Q1 2024 Q1 2025

SPORTS CONTENT, TECHNOLOGY & SERVICES

REVENUE (€MM) KEY QUARTERLY TAKEAWAYS

▲ 33%

Sports Content, Technology and Services revenue increased 33% YoY, primarily driven by:

Marketing and Media Services grew

€12 million, up 36%, led by higher ad:s revenue as several sportsbooks increased spending on marketing campaigns, and the addition of affiliate marketing capabilities.

Sports Performance grew 23%, due to price increases and additional product uptake.

Q1 2024 Q1 2025

SPORT RIGHTS EXPENSES AND PURCHASED SERVICES

SPORT RIGHTS EXPENSES1 (€MM)

104

▲ 14%

Q1 2024 Q1 2025

ADJUSTED PURCHASED SERVICES (€MM)

KEY QUARTERLY TAKEAWAYS

Sport rights expenses were €104 million, up €13 million or 14% YoY, down ~80 bps as a percent of revenues, driven primarily by the success of our ATP content.

Adjusted purchased services, were up 24% YoY, primarily driven by higher ad:s traffic and affiliate costs, along with higher cloud and IT costs to support growth initiatives.

▲ 24%

Q1 2024 Q1 2025

1 See the Appendix for non-capitalized sport rights expenses and amortization of capitalized sport rights components.

PERSONNEL EXPENSES AND OTHER OPERATING EXPENSES

ADJUSTED PERSONNEL EXPENSES (€MM)

▲ 16%

Q1 2024 Q1 2025

ADJUSTED OTHER OPERATING EXPENSES (€MM)

23 24

KEY QUARTERLY TAKEAWAYS

Adjusted personnel expenses were €80 million, up €11 million or 16% YoY as we continue to focus any new headcount on driving profitable growth initiatives.

Adjusted other operating expenses were €24 million, an increase of 5% YoY and down ~90 basis points as a percent of revenue.

▲ 5%

Q1 2024 Q1 2025

COST PROFILE AND DRIVERS OF OPERATING LEVERAGE

ADJUSTED EBITDA MARGIN & EXPENSES AS A % OF REVENUE

17% 19% 20% 22%

57%

26%

57%

24%

48%

32%

47%

31%

FY22 FY23 FY24 FY25E

KEY TAKEAWAYS

Projecting 200 basis points of EBITDA margin expansion in 2025, driven by operating leverage from both sport rights and other expenses.

On track for third consecutive year of increasing Adjusted EBITDA margins, delivering 500 basis points of margin expansion from 2022 to 2025E.

Opportunity to unlock operating leverage in 2025 and beyond, with long term visibility on sport right costs and focus on managing our cost infrastructure.

Targeting long-term Adjusted EBITDA margins of 30%+.

STRONG CASH GENERATION AND LIQUIDITY POSITION

Free Cash Flow (€MM) Total Liquidity (€MM)

568

578

220

348

358

▲ 10

▲ 32

KEY TAKEAWAYS

Generated €32 million in Free Cash Flow in Q1, translating to 54% conversion rate.

Strong balance sheet with increasing liquidity position and no debt outstanding.

Total liquidity of €578 million at Q1 2025, comprised of €358 million cash and cash equivalents and €220 million undrawn revolving credit facility.

Anticipate continued strong cash generation in 2025 and beyond.

FCF Conversion

54%

Q1 2024 Q1 2025 Q4 2024 Q1 2025

FY2025 OUTLOOK

2025 Guidance

Metric (€MM)

2024 Actual

Target

at least

YoY Increase

at least

Revenue

€1,107 million

€1,273 million

15% growth

Adjusted EBITDA

€222 million

€281 million

26% growth

Adjusted EBITDA margin

20.1%

22.1%

200 bps expansion

Free Cash Flow Conversion

53%

>53%

Conversion rate above 2024 level

Note: Excludes impact of announced and pending acquisition of IMG ARENA

3 YEAR OUTLOOK

~ € 1.7 billion

€ 1.1 billion

2027E

3 YR OUTLOOK

at least

2024

Metric (€MM)

Revenue Adjusted EBITDA

60%

53%

€ 118 million

20%

€ 222 million

Adjusted EBITDA Margin Free Cash Flow

15% CAGR

~ € 455 million

27% CAGR

~ € 275 million

27%

+700bps 33% CAGR

Free Cash Flow Conversion +700bps

Note: Excludes impact of announced and pending acquisition of IMG ARENA

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NON-IFRS FINANCIAL MEASURES AND OPERATING METRIC

We have provided in this presentation financial information that has not been prepared in accordance with IFRS, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted purchased services, Adjusted personnel expenses, Adjusted other operating expenses, Free cash flow, and Free cash flow conversion, as well as our operating metric, Customer Net Retention Rate. We use these non-IFRS financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to IFRS measures, in evaluating our ongoing operational performance. We believe that the use of these non-IFRS financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-IFRS financial measures to investors.

Non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. Investors are encouraged to review the reconciliation of these non-IFRS financial measures to their most directly comparable IFRS financial measures provided in the financial statement tables included in this presentation.

"Adjusted EBITDA" represents earnings for the period adjusted for finance income and finance costs, income tax expense or benefit, depreciation and amortization (excluding amortization of capitalized sport rights licenses), foreign currency gains or losses, and other items that are non-recurring or not related to the Company's revenue-generating operations, including share-based compensation, restructuring costs, non-routine litigation costs, and certain transaction-related costs.

License fees relating to sport rights are a key component of how we generate revenue and one of our main operating expenses. Only licenses that meet the recognition criteria of IAS 38 are capitalized. The primary distinction for whether a license is capitalized or not capitalized is the contracted length of the applicable license. Therefore, the type of license we enter into can have a significant impact on our results of operations depending on whether we are able to capitalize the relevant license. As such, our presentation of Adjusted EBITDA reflects the full costs of our sport right's licenses. Management believes that, by including amortization of sport rights in its calculation of Adjusted EBITDA, the result is a financial metric that is both more meaningful and comparable for management and our investors while also being more indicative of our ongoing operating performance.

We present Adjusted EBITDA because management believes that some items excluded are non-recurring in nature and this information is relevant in evaluating the results relative to other entities that operate in the same industry. Management believes Adjusted EBITDA is useful to investors for evaluating Sportradar's operating performance against competitors, which commonly disclose similar performance measures. However, Sportradar's calculation of Adjusted EBITDA may not be comparable to other similarly titled performance measures of other companies. Adjusted EBITDA is not intended to be a substitute for any IFRS financial measure.

Items excluded from Adjusted EBITDA include significant components in understanding and assessing financial performance. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation, or as an alternative to, or a substitute for, profit for the period, revenue or other financial statement data presented in our consolidated financial statements as indicators of financial performance. We compensate for these limitations by relying primarily on our IFRS results and using Adjusted EBITDA only as a supplemental measure.

"Adjusted EBITDA margin" is the ratio of Adjusted EBITDA to revenue.

The Company is unable to provide a reconciliation of Adjusted EBITDA to profit (loss) for the period or Adjusted EBITDA margin to Profit for the period as a percentage of revenue (in each case the most directly comparable IFRS financial measure) on a forward-looking basis without unreasonable effort because items that impact these IFRS financial measures are not within the Company's control and/or cannot be reasonably predicted. These items may include, but are not limited to, foreign exchange gains and losses. Such information may have a significant, and potentially unpredictable, impact on the Company's future financial results.

Disclaimer

Sportradar Group AG published this content on May 12, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 12, 2025 at 11:04 UTC.