Sportradar Group AG

Good day and thank you for standing by and welcome to the Sportradar First Quarter 2023 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw a question, please press star 1-1 again. And please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, your Senior Vice President for Investor Relations, Reema Hyder. Please go ahead.

Thank you, Liwei. Good morning, everyone, and thank you for joining us for Sport Radar's earnings call for the first quarter of 2023. Please note that the slides we will reference during this presentation can be accessed via the webcast on our website at investors.sportradar.com and will be posted on our website at the conclusion of this call. A replay of today's call will also be available on our website. After our prepared remarks, we will open the call to questions from investors. In the interest of time, 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, filed with the SEC in March, 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 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 on our Investor Relations website. Joining me today are Karsten Kerl, our Chief Executive Officer, and Ulrich Harmoz, our Chief Strategy Officer. Now let me turn the discussion over to Karsten.

Thank you, Rima, and good morning to everyone. We are pleased with a strong start in 2023, and once again, we produced solid results with great execution across all our businesses. We had wins across the globe, including the U.S. Asia Pacific, and Latin America. We also strengthened our organization with a new CFO, Gerard Griffin, new CTO, Alexander Skolkolovsky, and as mentioned last quarter, a new CHRO, Severin Riveri-Gerstner. We delivered first quarter 2023 revenue growth of 24% and adjusted EBITDA growth of 37% versus the prior year. As in previous quarter, our core batting products in the rest of the world and US segments led the way for this growth and strengthened our profitability compared to last year. Once again, we have demonstrated that we have the best-in-class products that are mission-critical to our clients, whether they are operators, media, or sports teams. In our rest-of-the-world business, Our value-add product managed betting service and live odds service grew 40% and 29% year-over-year, respectively, as a result of our strategy to move customers up the value chain, as well as a positive impact from our recent acquisitions. In the U.S., we saw very strong growth across betting, media, and ads, with betting products growing over 80% year-over-year, and once again surpassing sales to our media clients, which was up until now the larger client type in the US. The higher sales as a result of more states legalizing betting and increase in employee betting and an increase in sales for our ads products as operators look for targeted solutions to engage more fans. The first quarter is a big sports period for US sports fans. And our U.S. business supports many facets of this busy period. Super Bowl, March Madness, now we are running into the playoffs for NHL and NBA, opening day for the MLB, and this all creates deeper engagement with broadcasters, especially with their OTT platforms. This actively also increases batting volumes and more investments in digital advertising by operators in 38 regulated states. Our revenue share model in the U.S. enables us to capture a robust share of the GGR generated by all these sports. Additionally, we believe that through our partnerships with leagues, we have the ability to capture deeper data, especially player data, and continue to leverage that data into proprietary products and solutions that serve our customers. This is how we move up the value chain, offering operators a higher margin product. In the US, we also have doubled down on our efforts to expand in the college space. We recently announced the renewal of our partnership with Big Ten Network to power their OTT Big One G Plus platform through 2024 to 2025 college athletic season. Additionally, with the massive growth we have seen in ads platform, we now integrating this app technology into Snapchat, creating a new channel for betting operators engage and acquire customers using our paid social media advertising service. While we execute on our growth, we also remain focused on our costs and where and how we invest. We are the leaders in sports technology measured by revenue, but we must continue to invest to maintain our leadership position, meet our client needs in advance of the industry. We believe that our ability to build products based on technology that handle big data and sports content in fan and user preferences, embedding liquidity and increasingly become valuable for our customers and partners. Therefore, we continue to invest into our tech capabilities to automate data capturing in real time with computer vision and enhancing analytics and deep data in sports, as well as the betting liquidity data in real time. based on artificial intelligence. Our investments include, first, upgrade our tech stack for betting and gaming and engineering, which will enable us to drive higher revenue per engineering cost. We recently hired our new CTO, Alexander Skokolovsky, Who will oversee this upgrade and our overall technology transformation? Investments into computer vision technology to automate deep data capture in real time as a basis of advanced products. We have developed the first fully automated product for table tennis and will roll out this technology into other sports. And we have already seen an increase in more data capturing, more matches in soccer, tennis, and basketball. This automation will also allow us to scale our Scout network over time. Ultimately, we believe this investment creates more betting opportunities for sport, events, and leading to greater revenue per match over the cost base. Third, improving the trading algorithms for our fastest growing product, MTS. Using AI to improve liquidity trading in the real time analyzes of deep sports data the resulting margin improvement we can realize over the time here is both a benefit for us and for our clients and number four continue investment in the us to continue our hyper growth in this key market the us business is already showing results of our investment in both top line growth and operating leverage as demonstrated by our third straight quarter in a positive adjusted EBITDA and improved margins. While it is great to see this improvement, our goal is to continuously improve the US segment margin with leads to margin expansion for the entire company. It is evident to us that this investment today will yield positive results tomorrow for both top line growth as well as margin expansion. It will keep betting operators smarter, connected data, and analytics to manage their sportsbook. Give media companies the tools to engage more with fans. Give teams, leagues, and federations the data they need to improve their performance and expand their reach. And finally, keep the industry clean by detecting and preventing fraud, doping, and match fixing. Now I'm coming to my closing remarks. In summary, I'm very pleased with how we have started this year. We are reaffirming our guidance for 2023 that we gave last quarter. Before I turn over the call to Uli, I want to thank him for stepping in to lead our finance team since last December as interim CFO. As you may have seen, we announced a new CFO a few weeks back. I'm excited to welcome Gera Griffin to Sportradar. Gera and Uli will work on smooth transition over the next few months. I know Gera is looking forward to speak with all our investors. I will now turn the call over to Uli to discuss the financial results.