Sportradar Group AG

Good morning, and thank you for standing by. Welcome to the Sport Radar's first quarter earnings conference call. Our participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Rima Haider, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Catherine. Good morning and good afternoon, everyone. And thank you for joining us today for Sport Radar's first quarter 2022 earnings call. Before we begin, I would like to point out that the slides we will reference during this presentation can be accessed via the webcast or on our website at investors.sportradar.com. A replay of today's call will be available via phone and on our website. After our prepared remarks, we will open the call to questions from investors. To be fair to everyone, please limit yourself to one question plus one follow-up. Please note that some of the information you'll hear during our discussion today will consist of forward-looking statements, including, without limitation, those regarding revenue and future business outlook. These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast. For more information, please refer to the risk factors discussed in our annual report on Form 20F and the Form 6K furnished for the SEC today, along with associated earnings release. We assume no obligation to update any forward-looking statements or information which speak as of their respective dates. Also, during today's call, we will present both IFRS and non-IFRS financial measures. Additional disclosures regarding these non-IFRS measures, including a reconciliation of IFRS to non-IFRS measures, are included in the earnings release, supplemental slides, and our filings with the SEC, each of which is posted to our investor relations website. Joining me today are Karsten Curl, Chief Executive Officer, and Alex Gersh, Chief Financial Officer. I'd now like to turn the discussion over to Karsten Koehl.

Karsten Koehl Thank you, Rima, and thank you all for joining today. I'm pleased to share that our fiscal 2022 is off to a very strong start. Coming now to slide four, our revenue in the first quarter in 2022 increased 31 percent compared with the first quarter of 2021. driven by the U.S., and now grows in core batting products across all businesses. Our strong customer retention continued at 121%, and we have achieved many other successes, such as multiple partnerships for our integrity business, completion of a new acquisition, as well as increasing our licenses in the North American region. Slide number five. Our U.S. business delivered a revenue increase of 124% as we continue to increase revenues with our key betting customers as well as media companies. We also saw growth in the U.S. ads business at a rate of almost three times higher than our rest of the world's ads business. Globally, our ads revenues have grown over 70% year over year in the first quarter of 2022. In the rest of the world, we once again saw an increase in sales from our higher value products such as MTS or the live data and odds services. Our MBS revenue, which is a combination of the MTS and the MPS products, increased 51% year over year. Our live odds live data services increased 16% as a result of selling more content to our existing clients. our strategic priorities for 2022. I'd like to turn now into a brief discussion of the priorities for 2022. Before I get more specific, I want to stress that our overarching priorities continue to be accelerating our technology leadership and powerful data-driven networks with AI to process and analyze this data. For the first time in human history, we are living in a big data world. Every interaction any company, government, charity, or academic institute has with an individual or entity, it can generate many recorded data points. At Sportradar, we have an especially deep understanding of this new data opportunity. We are the source code of sport. With the experience and expertise in transforming 790,000 sporting events every year into granular numerical data that serves our B2B client base with deeper insights than any eye can see. Today, accelerating change more than ever is artificial intelligence. It is the megatrend of our times. It's crystal clear that one who has the most data delivered by powerful networks in sport, media, and betting has the most potential to generate alpha. Everything we are doing at Sportradar is aimed at maximizing this AI opportunity and ensuring that our clients can generate maximum alpha with our products. We have systems in place to analyze all the data export events all over the world, which we apply across our verticals to expand our product offering. For Sportradar, this adaptive approach has led us to develop commercial reliable synthetic data to serve our simulated reality programs, propriety computer visualization technology, or our sports tracking and audiovisual product processes and data-driven deep knowledge analytics of consumer behavior for targeting marketing purposes. In a nutshell, continuing and accelerating our technology leadership, harnessing data and maximizing insights, is the objective that extends across all our priorities, which I group in four categories. First is to grow core batting products. As our results indicated, our high-value ad offering products such as MBS and LiveData and OTS are driving significant growth. MBS provides existing bookmakers and operators wishing to start a sportsbook with highly sophisticated and effective services for just trading or the full turnkey solutions. I will talk about our managed trading services in more detail in a few minutes. Our LiveWord service is one of the most popular in-play trading services in the world. We anticipate continuing growth for this service, especially in markets like the US, where in-play betting still accounts for a minority of the betting, unlike in other parts of the world where sports betting is more mature. If you ever bet during a match versus before it, you understand why it's so much more exciting and intense to bet on your favorite team or player while the match is in progress. Our second objective is to grow our U.S. business with targeted products and move up the value chain. I'll use our Ads product as an example. With Ads, Sportradar has built an omnichannel digital marketing agency focused on sport fan engagement and helps sportsbooks as well as leagues and teams to be more efficient and precise in their marketing spend and deliver ROI. Ads industry-specific multi-channel marketing performance platforms help Sportsbook to more effectively and efficiently engage, acquire, retain, and grow customer across paid social, connected TV, digital out-of-the-home, and native publisher products. Another recent significant development is the opening up of the college landscape in the US. As many of you know, Just last month, the NCAA gave guidance that their membership can provide competition data to support sports betting. As we began talking to conferences, we encouraged not only that they want to have the best technology, but also the best integrity services are paramount for them. Founded in 2005, our integrity offering is deep and broad, with more than 150 leagues, anti-doping and law enforcement organizations, including stakeholders in the college landscapes, our customers. Based on our years of experience, we want to ensure our sports betting partners, athletes, are educated about the issue around match fixing and have information on healthy sport wagering behaviors. Now, turning to our third priority. It is the fully integration of the sports solution vertical, ensuring that the technology broadens the product set we can offer to our batting, media, and league partners. As a reminder, this is the business that we formed through the acquisition of Synergy Sports and Interact Sports and gives us incredible penetration in Division I and II college, basketball, and baseball, as well as cricket, one of the most popular sports worldwide. Computer vision and camera technologies are at the core of the technology that Sports Solutions uses to provide performance analytics, such as helping a player or team looking for competitive advantage. It goes without saying that the more information we have on teams and players, feeds our betting and media and league partners with deep insights on everything for reasoning the team has won to fence, or who can now experience what the coaches see. This is especially relevant in US cottage space. Sport Solutions also enhances our AV solution, which is the visual content product to interest sport fans in sport betting events and give them a betting opportunity. We combine audiovisual content, which is to a great extent non-televised, and comprehensive content from our highly attractive media rights portfolio. We already have a diversified portfolio to close of 400,000 live events per year and the addition of more content from Sport Solutions further enhances the attractiveness of our AV solutions as seen in our first quarter AV segment results. It is an important content set for our top 20 betting operator customers. AV betting revenues make up to more than 50% of the revenues from these top 20 customers. Last but certainly not least, fourth priority is to invest in our people, values and technology. As we scale rapidly, we are hiring in key areas of content and technology and investing in current talent. Prioritizing our people and giving them the tools they need to compete will always be one of our strategic priorities. We have also begun identifying environmental, social, government topics that have a significant impact to our business. Our approach is underpinned by our conviction that ethics and good governance matter to our future success. This is not a new approach. It's one that is integral to how Sportradar operates our business and as a central player in the sports ecosystem, guiding it. Through our integrity business, we monitor over 800,000 matches across more than 70 sports annually. Since 2008, our UFDS, the Universal Fraud Detection System, has been instrumental in reporting over 7,000 matches as suspicious and in helping authorities securing 514 sports sanctions and 50 criminal convictions. We believe so strongly in sport and we want to win in whatever we do. But we know that in order to have good competition, it must be fair competition and a level playing field. Our commitment to integrity and supporting the sustainability in sport around the globe is something that we will never change. Moving to 7 in our next section, I'd like to spend some time doing a deep dive into an area of our business that is a key growth driver for us. Today, I want to talk about MTS, the Managed Trading Service product, which is sold as part of our managed betting services. MTS is a sophisticated turnkey trading risk, odds, and liability management solution. Our rich set of tools allows our customer to manage betting activity, risk liability, trading margin performance across sports and markets. This is all executed in real time, according to rules and thresholds set in collaboration with our customers, underpinned by our machine learning technology. It's no surprise to us that over 200 organizations globally use MTS. As of the first quarter of 2022, we have processed close to 4 billion Euro in turnover, which is a revenue over year growth rate of 55%. At this current run rate, we expect MTS turnover to be in the range of 17 to 20 billion Euros in 2022. This is making us larger than any betting operator in the United States and is in the top five of the largest globally bookmakers compared by the handle. The MTS service is highly modular, enabling operators to access a range of specialized trading services to suit their business needs. For example, they can ask us to trade all sports on their behalf or they can elect to trade certain sports themselves while we trade the remainder. Or they can trade everything themselves but access our AI-driven customer managed services to give them a better understanding and insights of their consumer betting activities. For us, this modularity is critical in order to cater to all betting operators as they continue on their respective journey to modernize improve their trading by integrating MTS superior trading capabilities and services, ensuring that we are able to support them every step on the way to a fully turnkey offering. MTS partners also have the option to access the Entire Sportradar product portfolio, which includes products such as engagement tools, AV, and the turnkey sportsbook service. in addition to recruitment and retention marketing services through our ads products, our AI-driven behavioral marketing services through our recent acquisition of Wakes. We are essentially able to use MTS as upsell and cross-sell vehicle for the entire Sportradar product portfolio. Commercially, overall service provisions is underpinned by a revenue share model that is based upon a share of the cross-gaming revenue, or GGI, generated through the MTS service, typical with a monthly minimum fee. Our current take rate on MTS is between 5% to 7% versus the pure data products, which have a 2% take rate, making MTS a highly valuable product for us and one that is fueling our growth. MTS can be deployed quickly, allowing new markets and trends to increase speed to market and drive turnover. We reduce operational risk for customers by leveraging our scalability, expertise and trading liquidity and financial risk by generating superior trading margins or even offering a margin guarantee. Perhaps most importantly, our content and technology help operators engage end users and sport fans. Next, I'd like to turn to the discussion about the capital allocation and the priorities. Last month, Sportradar acquired Wakes, a pioneer in developing solutions for the iGaming industry. Wakes' innovative AI engine allows us to understand the likely profitability of players post-conversion in fear to their behavior over the last three days versus traditional business intelligence, which might give us the same data over two to three weeks. In turn, this helps us optimizing acquisition strategies with our advertising platform and much more quickly and accurate measure the efficiency of campaigns. The key with Rake's personalization service is that the fans receive a more targeted, player-friendly experience, which in turn gives us the foundation data to build a player-personalized offer and front end for our future products. The Rakes acquisition shows the type of acquisition we might look into in the future to accelerate our technology transformation. We already had a strong existing partnership with the team and they have a highly entrepreneurial culture and are technology innovators with products that fold into our existing product set and map to our strategic priorities. For the past two years, Sportradar has incorporated WAKES technology into its managed training services offering with all the WAKES products, the WAKES artificial intelligence and algorithms enhance the data analytics, promotion systems and player personalization in our Sportradar Sportsbook platform. I'm coming to the closing where I want to remind everyone that Sportradar is well positioned to continue its proven record of consistent long-term growth, strong cash generation, as well as very strong customer retention. We have the experience and the insights and the technology leadership warrant for sports betting and entertainment industry. And we are investing in our business with an eye toward technology transformation and continued growth. The strong first quarter sets us well for our fiscal year 2022. I like to end by reiterating our guidance that we gave in our fourth quarter call. for both revenue growth of 18 to 25% and adjusted EBITDA growth of 21 to 30%. With that, I turn over to Alex to discuss our numbers in more depth. Alex.