Sportradar Group AG , a leading global technology platform enabling next generation engagement in sports, and the number one provider of business-to-business solutions to the global sports betting industry, today announced financial results for its third quarter ended September 30, 2021.
Third Quarter 2021 Highlights
- Revenue in the third quarter of 2021 increased 30% compared to the third quarter of 2020 to €136.8 million ($158.7 million)1, driven by robust growth across all geographies and business segments
- Continued strong performance in the U.S. market with U.S. revenue in the third quarter of 2021 increasing by 119% compared to the third quarter of 2020. For the nine months ended September 30, 2021 the U.S. revenue reached €48.5 million ($56.3 million)1
- Adjusted EBITDA* in the third quarter of 2021 was up 21% compared to the third quarter of 2020 to €20.9 million ($24.2 million)1
- Strong Dollar-Based Net Retention Rate* of 128% at the end of third quarter of 2021, underscoring the continued success of our cross-sell and upsell strategy
- Successfully extended our partnership through 2028 with FanDuel Group, a leader in the U.S. sports betting market, covering pre-match betting services, live betting services, and betting entertainment tools
- Completed successful listing on Nasdaq, raising €546 million of primary net proceeds to fund continued growth in the business, providing the Company with €878 million to continue to invest in global growth
- For the full-year 2021, we expect revenue to be in the range of €553 to €555 ($641 to $644)1 million and Adjusted EBITDA* in the range of €99.5 to 101.5 ($115.4 to $117.7)1 million.
|Adjusted EBITDA margin*||15%||16%||-7%|
|Dollar-Based Net Retention Rate*||128%||114%||+12%|
|Adjusted Free Cash Flow*||€32.9||€13.5||+144%|
|Cash Flow Conversion*||158%||78%||+102%|
1 For the convenience of the reader, we have translated Euros amounts in the tables below at the noon buying rate of the Federal Reserve Bank of New York on September 30, 2021, which was €1.00 to $1.16.
* Non-IFRS financial measure; see “Non-IFRS Financial Measures and Operating Metrics” and accompanying tables for further explanations and reconciliations of non-IFRS measures to IFRS measures.
Carsten Koerl, Chief Executive Officer of Sportradar said: “Our strong results demonstrate the value we provide to our partners and customers around the world. We are the largest provider of sports intelligence in the world and the only profitable global sports technology platform of scale. Critically, we believe we are also the most innovative in developing technology solutions that enable our league customers, media and betting partners to use our ever-increasing data to attract and engage sports fans.”
Koerl continued, “We plan to continue to make significant investments, particularly in the U.S. The U.S. represents the primary area of focus to execute on our strategic growth plans, as the U.S. region is currently only 7 percent of our group revenues, representing a significant potential business opportunity as more states legalize betting and the market expands from $1 billion in 2019 to an estimated $23 billion in the next 10 years. Our recent Nasdaq listing in the U.S. was a tremendous milestone for our team, and we look forward to building on our success in a multitude of areas in the years ahead.”
Financial Highlights for the Three Months Ended September 30, 2021
- Revenue in the third quarter of 2021 increased by 30% compared to the third quarter of 2020 to €136.8 million
- Adjusted EBITDA* in the third quarter of 2021 increased by 21% compared to the third quarter of 2020 to €20.9 million
- Adjusted EBITDA margin* remains strong at 15% in the third quarter of 2021, a slight decrease compared to the third quarter 2020 due to additional IPO costs of approximately €5.7 million which were incurred in the third quarter of 2021. Eliminating the impact of IPO costs would result in an Adjusted EBITDA margin of 20%, illustrating our continuous ability to achieve operating leverage
- Dollar-Based Net Retention Rate* increased from 114% to 128% for the comparable twelve month period ending at September 30, 2020 and 2021 demonstrating continued execution of our upsell and cross-sell strategy and underscoring the quality of the products and services we provide our customers
- Adjusted Free Cash Flow* in the third quarter of 2021 increased by 144% to €32.9 million which resulted in a Group Cashflow conversion of 158%
- Cash totaled €768.4 million as of September 30, 2021. Total liquidity available for use at September 30, 2021, including undrawn credit facilities was €878.4 million
- Total Debt at September 30, 2021 was €436.7 million resulting in a net cash position of €331.7 million
- Segment revenue in the third quarter of 2021 increased by 24% compared to the third quarter of 2020 to €78.6 million. This growth was driven primarily by uptake in our higher value-add offerings including Managed Betting Services and Live Odds Services, which increased by 63% and 20% respectively, as a result of new customers wins as well as increased turnover2 and volume.
- Segment Adjusted EBITDA* in the third quarter of 2021 increased by 36% compared to the third quarter of 2020 to €44.7 million. The Segment Adjusted EBITDA margin* improved from 52% to 57% in the third quarter of 2021 driven by growth in higher margin products.
2 Turnover is the total amount of stakes placed and accepted in betting.
- Segment revenue increased in the third quarter of 2021 by 13% compared to the third quarter of 2020 to €29.0 million. This growth was impacted by COVID related schedule changes in 2020, when more matches than usual were played in Q3 2020. Adjusting for schedule changes Q3 2021 growth was approximately 30%, driven by volume growth as we were able to sell more matches (such as Soccer and Baseball) as well as growth from additional, new content (such as Copa America, Horse Racing and eSports) being sold to existing and new customers.
- Segment Adjusted EBITDA* in the third quarter of 2021 increased by 220% compared to the third quarter of 2020 to €9.6 million. The Segment Adjusted EBITDA margin* improved from 12% to 33% in the third quarter of 2021 driven by lower cost of some content.
- Segment revenue in the third quarter of 2021 increased by 119% compared to the third quarter of 2020 to €19.6 million. This result was driven by growth in our US Betting services and increased revenue from our customers as the underlying market and turnover grew. We also experienced strong adoption of our ad:s product, growth in US Media and a positive impact from the acquisition of Synergy Sports in the second quarter of 2021.
- Segment Adjusted EBITDA* in the third quarter of 2021 increased by 24% compared to the third quarter of 2020 to -€(6.6) million. The Segment Adjusted EBITDA margin* improved from (-60%) to (-34%) in the third quarter of 2021 which reflects the scalability of this business and clear path to profitability while continuing to invest in the US market.
Costs and Expenses
- Personnel expenses in the third quarter of 2021 increased by €20.0 million compared to the third quarter of 2020 to €51.3 million resulting from additional hires in new business lines (2.849 FTE in the third quarter of 2021 vs 2.235 FTE in the third quarter of 2020), stock-based compensation, and reversal of temporary COVID 19 cost savings in the third quarter of 2021 compared to the third quarter of 2020.
- Other Operating expenses in the third quarter of 2021 increased by €15.7 million compared to the third quarter of 2020 to €25.2 million mainly driven by incurred costs for IPO, compliance costs relating to operating as a publicly listed company in the US and M&A costs.
- Total Sport rights costs in the third quarter of 2021 decreased by €9.0 million compared to the third quarter of 2020 to €28.7 million resulting from fewer major sporting events in the third quarter of 2021 compared to the third quarter of 2020.
- Adjusted EBITDA* in the third quarter of 2021 was negatively impacted by IPO costs of €5.7 million. Eliminating this impact would result in an Adjusted EBITDA* of €26.6 million.
Recent Business Highlights
- Issued and sold 19 million shares in connection with the closing of our IPO on Nasdaq raising €546 million of primary net proceeds
- Signed integrity partnerships with leading sports leagues and federations such as cricket’s Tamil Nadu Premier League (TNPL), Badminton Europe and the Austrian Tennis Association
- Secured a multi-year exclusive official data and media rights deal with Ligue Nationale de Basket (LNB), France’s top basketball league
- Implemented full Computer Vision models for Grand Slam tennis events including Wimbledon and US open
- Combined newly developed AI tools with our Managed Trading Services, Sportradar’s holistic trading service for sportsbook operators, to more accurately detect potential betting related match-fixing
- Announced partnership extension with US market leader FanDuel Group through 2028
- Announced a five-year deal with US betting and iGaming operator, Bally’s Interactive, to help support and grow sportsbook operations in the US
- Celebrated three wins at the EGR B2B Awards in the Best Customer Service and Live Streaming Supplier categories, as well as the recently acquired Fresh Eight being shortlisted for Best Marketing and PR Supplier
For the full-year 2021, the Company currently expects:
- Revenue in the range of €553 million to €555 million, representing growth of 36.6% to 37.1% for fiscal 2021
- Adjusted EBITDA* in the range of €99.5 million to €101.5 million, representing growth of 29.4% to 32.0% for fiscal 2021
Conference Call and Webcast Information
Sportradar will host a conference call to discuss the third quarter 2021 financial results on November 17, 2021 at 8:00 a.m. Eastern Time (“ET”). The conference call can be accessed live over the phone by dialing 1-877-423-9813, or for international callers 1-201-689-8573. A replay will be available from 11:00 a.m. ET on November 17, 2021 through November 24, 2021, by dialing 1-844-512-2921, or for international callers 1-412-317-6671. The replay passcode will be 13724560.