Sportradar Reports Fourth Quarter and Full Year 2023 Results

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Sportradar Group AG (NASDAQ: SRAD) (“Sportradar” or the “Company”), a leading global sports technology Company focused on creating immersive experiences for sports fans and bettors, 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% 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% 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 $200 million 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% to €877.6 million compared with the prior year, driven by 20% growth from Rest of World Betting and 30% growth from the U.S. Full year revenue was at the upper end of the Company’s 2023 annual outlook range of €870.0 million to €880.0 million.
  • Total profit from continuing operations for the full year 2023 was €34.6 million compared with €10.5 million for the prior year. Adjusted EBITDA1 for the full year of 2023 increased 33% to €166.8 million compared with the prior year and was at the upper end of the Company’s 2023 annual outlook range of €162.0 to €167.0 million.
  • Total Profit from continuing operations, as a percentage of revenue, for the full year 2023 was 4% compared with 1% for the prior year. Adjusted EBITDA margin1 for 2023 increased over 177 bps to 19% compared to 2022, primarily driven by strong operating leverage from sport rights and personnel costs.
  • Cash and cash equivalents grew to €277.2 million as of December 31, 2023, and total liquidity available for use on December 31, 2023, including undrawn credit facilities was €497.2 million.
  • Authorized a $200 million 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% 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% to €252.6 million compared with the fourth quarter of 2022 with growth across all segments.
  • Total Profit from continuing operations for the fourth quarter of 2023 was €23.2 million compared to a loss of €33.3 million for the same quarter last year. The Company’s Adjusted EBITDA1 for the same period increased 13% to €39.5 million 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% compared with (16%) for the same quarter last year. Adjusted EBITDA margin1 was 16% in the fourth quarter of 2023, compared with 17% 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 €497.2 million including cash and cash equivalents of €277.2 million and an undrawn credit facility of €220.0 million.
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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.

Key Financial and Operating Metrics
Q4 Q4 Change FY FY Change
In millions, in Euros  2023 2022% 2023 2022%
Revenue 252.6 206.3 22% 877.6 730.2 20%
Profit (loss) for the period from continuing operations 23.2 (33.3) 170% 34.6 10.5 230%
Profit (loss) for the period from continuing operations as a percentage of revenue 9% (16)% +2,530 bps 4% 1% +251 bps
Adjusted EBITDA1 39.5 35.1 13% 166.8 125.8 33%
Adjusted EBITDA margin1 16% 17% -136 bps 19% 17% +177 bps
Net Retention Rate1 111% 119% -717 bps 111% 119% -717 bps

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% 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.
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Segment Information

RoW Betting

  • Segment revenue in the fourth quarter of 2023 increased by 25% to €132.0 million compared with the fourth quarter of 2022. Growth was driven primarily by increased sales of the Company’s MBS solution, which grew 48% year over-year-as sports outcomes normalized and the contribution from the Taiwanese Sports Lottery Company. Our Live Odds Services also grew 21%.
  • Segment Adjusted EBITDA1 in the fourth quarter of 2023 increased by 19% to €55.0 million compared with the fourth quarter of 2022. Segment Adjusted EBITDA margin1 decreased to 42% compared with the fourth quarter of 2022 mainly due to higher operating costs.

RoW Audiovisual (AV)

  • Segment revenue in the fourth quarter of 2023 increased by 20% to €50.0 million compared with the fourth quarter of 2022. Revenue growth was driven by the addition of new CONMEBOL and NBA rights and uplift to services to existing and new clients.
  • Segment Adjusted EBITDA1 in the fourth quarter of 2023 was €11.2 million. Segment Adjusted EBITDA margin1 decreased to 22% from 28% compared with the fourth quarter of 2022 mainly due to increased sport right costs.

United States

  • Segment revenue in the fourth quarter of 2023 increased by 28% to €52.7 million compared with the fourth quarter of 2022. Results were primarily driven by strong market performance, including initial contributions from our NBA deal and the uplift from selling additional services to new and existing clients.
  • Segment Adjusted EBITDA1 in the fourth quarter of 2023 was a loss of €1.5 million compared with a profit of €4.3 million in the fourth quarter of 2022 due to the step-up costs of the new NBA deal. Segment Adjusted EBITDA margin12was (3%) compared with 11% in the fourth quarter of 2022.

Costs and Expenses

  • Purchased services and licenses in the fourth quarter of 2023 increased by €9.5 million to €57.8 million compared with the fourth quarter of 2022, reflecting one-time set up costs for the Taiwan Lottery deal and higher investments in external development and product delivery costs. Of the total purchased services and licenses, approximately €9.8 million was expensed sport rights.
  • Personnel expenses in the fourth quarter of 2023 increased 10% to €88.8 million, compared with the fourth quarter of 2022. The increase was driven by increased headcount and costs related to the Company’s strategic re-alignment initiatives.
  • Other Operating expenses in the fourth quarter of 2023 decreased 30% to €24.4 million compared with the fourth quarter of 2022, primarily driven by non-recurring litigation costs that occurred in the fourth quarter of 2022.
  • Total sport rights costs in the fourth quarter of 2023 increased by 51% to €75.1 million compared with the fourth quarter of 2023, primarily a result of the new NBA deal.

The tables below show the information related to each reportable segment for the three-month periods and years ended December 31, 2023, and 2022.

Three Months Ended December 31, 2023
in €’000 RoW Betting RoW Betting AV United States Total reportable segments All other segments Total
Segment revenue 132,007 50,042 52,739 234,788 17,798 252,586
Segment Adjusted EBITDA 55,037 11,156 (1,532 ) 64,661 1,957 66,618
Unallocated corporate expenses2 (27,077 )
Adjusted EBITDA1 39,541
Adjusted EBITDA margin1 42 % 22 % (3 %) 28 % 11 % 16 %
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Three Months Ended December 31, 2022
in €’000 RoW Betting RoW Betting AV United States Total reportable segments All other segments Total
Segment revenue 105,923 41,768 41,153 188,844 17,444 206,288
Segment Adjusted EBITDA 46,282 11,883 4,333 62,498 (881 ) 61,617
Unallocated corporate expenses2 (26,508 )
Adjusted EBITDA1 35,109
Adjusted EBITDA margin1 44 % 28 % 11 % 33 % (5 %) 17 %
Year Ended December 31, 2023
in €’000 RoW Betting RoW Betting AV United States Total reportable segments All other segments Total
Segment revenue 466,823 182,196 165,512 814,531 63,090 877,621
Segment Adjusted EBITDA 209,562 52,211 18,893 280,666 (6,328 ) 274,338
Unallocated corporate expenses2 (107,538 )
Adjusted EBITDA1 166,800
Adjusted EBITDA margin1 45 % 29 % 11 % 34 % (10 %) 19 %
Year Ended December 31, 2022
in €’000 RoW Betting RoW Betting AV United States Total reportable segments All other segments Total
Segment revenue 389,092 160,522 127,442 677,056 53,132 730,188
Segment Adjusted EBITDA 182,439 46,494 (4,141 ) 224,792 (13,348 ) 211,444
Unallocated corporate expenses2 (85,598 )
Adjusted EBITDA1 125,846
Adjusted EBITDA margin1 47 % 29 % (3 %) 33 % (25 %) 17 %

2 Unallocated corporate expenses primarily consist of salaries and wages for management, legal, human resources, finance, office, technology and other costs not allocated to the segments.

Share Buyback Program
The Board of Directors has approved a $200 million share buyback program given the strong business fundamentals and confidence in the long-term profitability and cash flow outlook. The Company anticipates commencing purchases under the program when the next trading window opens, which is following the reporting of its Q1 2024 earnings results.

2024 Annual Financial Outlook

Sportradar is targeting fiscal 2024 outlook for revenue and Adjusted EBITDA1 as follows:

  • Revenue of at least €1,050 million, representing year-on-year growth of at least 20%.
  • Adjusted EBITDA1 of at least €200 million, representing year-on-year growth of at least 20%.
  • Adjusted EBITDA margin1 of approximately 19%.
  • Guidance assumes a Euro to USD exchange rate of 1.07.

Conference Call and Webcast Information

Sportradar will host a conference call to discuss the fourth quarter 2023 results today, March 20, 2024, at 8:00 a.m. Eastern Time. Those wishing to participate via webcast should access the earnings call through Sportradar’s Investor Relations website. An archived webcast with the accompanying slides will be available at the Company’s Investor Relations website for one year after the conclusion of the live event.

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