Sportradar Group AG

Good day and thank you for standing by. Welcome to the Sport Radar third quarter 2022 earnings conference call. At this time, all 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 will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Reema Hyder, Senior Vice President, Head of Investor Relations. Please go ahead.

Thank you, Michelle. Good morning, everyone, and thank you for joining us for Sport Radar's earnings call for the fourth quarter of 2022. Please note that the slides we will reference during this presentation can be accessed via the webcast on our website at investors.sportradar.com. The slides will be posted on our website at the conclusion of this call. A replay of today's call will be available on our website. After our prepared remarks, we will open this call to questions from investors. In the interest of time, please limit yourself to one 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 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 with the SEC today along with the 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 Körl, our Chief Executive Officer, and Ulrich Harmoz, our Interim Chief Financial Officer. And now let me turn the discussion over to Karsten.

Thank you, Rima, and good morning to everyone. Let me say up front that Sport Radar made excellent progress throughout the year. We exceeded our initial and revised revenue guidance and delivered strong adjusted EBITDA performance for the full year 2022, even in face of a more challenging macroeconomic environment. We believe our business model is resilient, coupled with a strong embedded growth, which we believe will deliver strong results in 2023 and well into the future. Speaking of strong results, We delivered full year 2022 revenue growth of 30% and adjusted EBITDA growth of 23%. Full year revenue growth was again driven by our rest of the world betting business at 26% and the US segment, our fastest growing business, coming in at 78% growth for the full year. In rest of the world segment, MTS led the way with very strong year-over-year growth, probably driven by the increase of the trading volume with our largest existing customers. We continue to enhance this key product to increase automatization and drive higher trading margins. Our US business demonstrated the strength of our business model and market position, a key market for our long-term growth. We signed a multi-year agreement with FanDuel as their preferred data and odd supplier Leveraging our long-term partnership with the NBA, we also continue to grow our technology solution and fan engagement with key partners like MLB and NHL. We were pleased to become the official streaming partner of Hard Rock Sportsbook and added important new partnerships with Bowl Season, USFL, Athletes Unlimited, additionally. We are named as the Data Service Provider of the Year by American Gambling Awards, a testament of our strong capabilities, which we provide to our clients. We believe that innovation is the core of our differentiated value proposition, and we will continue to be an integral part of our ability to deliver winning solutions to this growing global market. To that end, we presented the first end-to-end AI-driven batting solution for table tennis at ICE 2023. the biggest global batting exhibition. Using computer vision technology to create batting products and mixed reality experiences without any human intervention. The reception of this innovation was exceptional and we believe this is the first of many steps in this direction. We will provide some more details a little later on in this technology. We also accelerated the development of our product portfolio by integrating acquisitions like Weix into our core betting offering. Weix enhances our MTS offering with its innovative AI engine, which enables customers to better and more quickly understand the likely profitability of players. Our early adopters have demonstrated meaningful financial and operational improvements, which we believe will translate to additional growth in GGR and other underlying value drivers for the business of our clients. For example, applying WIKE's recommender suite across the entire user experience, operators reported an 8% to 10% increase in monthly GGR, as well as higher fan engagement retention due to personalization tools. While personalization clearly boosts player engagement, it also drives the diversification of offering. We have observed an 80% uplift in users interacting with the home page when personalized, while also betting on greater than 23% leaks than in the normal benchmark. Wax contributed to strengthening our core betting product, which was one of our goals for 2023. Coming now to slide number five. You may recall that we articulated four primary goals for 2022. They were, first, growth of our core betting products, second, develop and grow the U.S. business, third, integrate sports solutions, and fourth, invest into our people and technology. We successfully achieved these goals for our 2022 results, and they are reflected in the accomplishments. Slide number six. In growing our core betting products, our rest of the world betting segment has a full year-over-year growth of 26% and remains the highest contributor to our profitability with 47% adjusted EBITDA margin. The largest growth driver in rest of the world betting segment was migrating customers up the value chain through our managed trading services or MTS. MTS revenue grow 56% for the year as a result of a sharp increase in trading volumes and continuous improvement in our trading algorithms. When annualizing our Q4 trading volume, we traded 19 billion euros, which is comparable with the liquidity of a top 10 global betting operator. This is an increase of 84% compared to the same period in the last year. In 2022, we also started to project to improve our trading performance, increasing usage of AI for our liquidity trading. We implemented a new AI algorithm for soccer, our biggest betting sport, and A-B testing has shown, on average, an over 6% increase in GGR. We saw a strong regional growth in both Latin America and Brazil, and Asia driven by India. Sales growth in both countries was nearly 300%. We are excited about our opportunities in these emerging markets. In the US, we have maintained our high revenue growth and importantly, generated positive adjusted EBITDA for the second quarter in a row. The US segment revenue grew close to 80% for the full year with strong growth across our product portfolio, including betting, advertising, digital media, and professional sports solutions. This portfolio allows us to serve a diverse set of clients in our U.S. market, continues to legalize sports betting. And the growing market adopts more in in-play betting with a revenue share model, which allows us to benefit as the market matures. We signed major agreements with betting operators, such as FanDuel, and increased wallet share with our media clients, such as Yahoo!, a prominent mentioning for us when Fox Sports used our data and statistics during the Super Bowl. This is a relationship which dates back in 2018. We are pleased to provide live data and stats to the Fox Sports team to enhance their broadcast and help engage the roughly 113 million viewers. We're also excited about March Madness, which kicked off yesterday. This will be our eighth year partnering with CBS and their national broadcast, which will reach more than 11 million viewers per game. With the acquisition of Synergy and Interact Sport in 2021, we doubled down on product automatization through the use of AI and computer vision. As mentioned earlier, we successfully present a full AI driven table tennis product using computer vision at ICE 2023. This product is already being used by some of our clients. We had two players there playing table tennis while our computer vision technology automatically collected video content and deep data, transforming the content real time into a viewing experience. Our algorithms created fast match predictions and visualizations that were transformed into the digital assets capable of incorporating dynamic content into live stream, such as real-time betting, data and ops, and performance insights for virtual advertising. In addition, the seamless automated process allowed us to unlock new betting opportunities like quick bets, micro betting formats that enables bettors to place bets within the table tennis rally. For example, on a number of bounces or the last player hit the ball with rapid playing cycles of less than one minute. This fully automated product is only the beginning with expansion opportunities across the global sports landscape. We are confident that technology like computer vision will allow players, teams, sports fans and batters to understand and engage with the sport on a much more detailed level. In fact, just earlier this week, we were selected as the successful bidder for the Global Association of Tennis Professionals, ATP, data and streaming rights, starting in 2024. As a result of our commitment to product innovation development in advanced technologies such as computer vision and AI, the capabilities and global scale of our offering will provide betting operators innovative, best-in-class products and tag-savvy sports tennis fans a richer, more immersive experience while also safeguarding and upholding its integrity. And finally, our strong performance this year would not be possible without our people, who continue to make Sportradar a critical player in the sports ecosystem. We invested into our people last year across content, products, commercial, and technology areas to make our company a stronger and more agile organization. Turning to slide nine. For 2023, our core priorities are first, further expand our leadership position in core betting markets based on our next generation trading services. Second, grow into markets like ads, media, and sport performance. Third, create innovative fan engagement experience based on AI and computer vision technology. Fourth, drive operational effectiveness and automatization. And fifth, safeguard the integrity of sport and protect the well-being of its athletes. We will develop these products in close cooperation with our long-time partners like NBA, NHL, MLB, and our key clients. The strength of our business model allows us to grow at a rapid pace and at the same time reinvest some of our operating leverage back into product developments and new business opportunities. Now to the closing remarks. Our strong outlook for 2023 reflects the tremendous global market opportunity we have. Our availability to offer more value to our clients through additional high-value products, as well as tap into new emerging markets. For 2023, we expect revenue full-year growth of 24% to 26%, and adjusted EBITDA in the range of 157 to 167 million euros. At the midpoint of this range, we would expect margin expansion of 60 basic points for the full year. even as we continue to invest in technology and innovation. Uli will walk you through the drivers of our 2023 guidance in his remarks. I will now turn the call over to Uli to discuss the financial results.