Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Genius Sports Ltd (GENI, Financial) reported group revenue of $95 million for Q2 2024, exceeding expectations.
- Adjusted EBITDA for the quarter was $21 million, representing a 33% year-on-year growth and nearly 400 basis points of margin expansion.
- The company has extended its exclusive data partnership with Football DataCo, securing data rights for UK football, including the English Premier League, through 2029.
- Genius Sports Ltd (GENI) launched the first-ever EFL fantasy football game, which quickly became the number one downloaded sports app in the UK iOS App Store.
- The company has increased its 2024 revenue and adjusted EBITDA guidance to $510 million and $85 million, respectively, indicating strong confidence in future growth.
Negative Points
- Media revenue was largely unchanged year-on-year due to a quieter sporting calendar and lower overall marketing spend.
- Sports revenue was slightly lower year-on-year, with sports technology viewed more as an enabler rather than a direct revenue driver.
- The company's net loss widened by $10 million year-over-year, despite an increase in adjusted EBITDA.
- Stock-based compensation expenses were significantly higher year-over-year, impacting overall profitability.
- The US market showed a high single-digit decline in revenue for Q2, attributed to the seasonally slow period and lower media programmatic spend.
Q & A Highlights
Q: Can you comment on the direction of pricing with customer renewals and the BetVision product?
A: Mark Locke, CEO: Everything is progressing as expected with customer renewals, with no surprises. BetVision has seen significant improvements and will be rolled out to new customers with exciting new features.
Q: Can you discuss the potential of Trend Genius and your partnership with X?
A: Mark Locke, CEO: Trend Genius is another way to monetize our data and platform, opening opportunities with non-betting clients. This is part of our broader strategy to roll out new products and technologies.
Q: What are the major drivers for maintaining 20% revenue growth?
A: Mark Locke, CEO: Growth is driven by successful renegotiations, new product rollouts, and strong positioning. Investments in technology and execution are starting to pay off, driving both revenue and margin growth.
Q: How do you expect rights costs to grow through 2028?
A: Mark Locke, CEO: We have secured the most important global rights for a long period and are not compelled to pursue new deals. Our focus is on driving cash flow, margin, and shareholder value.
Q: How did changing your functional currency impact revenue and EBITDA guidance?
A: Nick Taylor, CFO: Changing the functional currency had no impact on EBITDA or revenue. It was an accounting adjustment due to our increasing US dollar-denominated business.
Q: Can you explain the increase in stock-based compensation and its impact on EBITDA?
A: Nick Taylor, CFO: The increase is due to the timing of issuing the management program in Q2 2024, compared to Q4 in 2023. There is no stock-based compensation for vendors in the current year.
Q: What is driving the expected revenue growth in Q4?
A: Nick Taylor, CFO: Growth is driven by multiple factors, including new sports tech deals, media, and sports betting. It is not just one factor but a combination of several growth levers.
Q: How do you see macroeconomic pressures impacting betting activity?
A: Mark Locke, CEO: We are conservative in our forecasts and do not expect significant impacts. The overall market is growing, and improvements in product quality and state regulations are positive tailwinds.
Q: How does the UEFA player tracking agreement translate into revenue?
A: Nick Taylor, CFO: Initial revenues will come from UEFA, with additional opportunities from media, broadcast, clubs, and teams. This strategic deal demonstrates our execution on integrating advanced technology.
Q: How does Apax exiting their position affect your strategy?
A: Mark Locke, CEO: Apax's exit does not change our strategy. It improves the technical base of the stock and gives us more flexibility for decisions like share buybacks and strategic M&A.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
