Sportradar Group AG

Good day and welcome to Sport Radar's fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, we will conduct a question and answer session. To ask a question at that time, please press star 1-1 on your touchtone telephone. We ask that you please limit yourself to one question and a follow-up. As a reminder, this call is being recorded. I would like to turn the call over to Jim Bombassi, Head of Investment Relations and Corporate Finance. You may begin.

Thank you, Operator. Hello, everyone, and thank you for joining us for Sport Radar's earnings call for the fourth 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 up 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 will 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 Form 6-K filed today with the FTC, 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 and non-IFRS measures, are included in the earnings release supplemental slides in our filings with the SEC, each of which is posted to our investor relations website. Joining me today are Carsten Kuehrl, our chief executive officer, and Gerald Griffin, chief financial officer. And now let me turn the discussion over to Carsten.

Thanks, Jim. Good morning, everyone. We are excited to speak with you today to provide an overview of our performance in 2023 and our strategic outlook in 2024. As a global leader in sports technology, we continue to consistently deliver above market growth at scale. This reflects the depth of our content and the high value proposition of our product offering, supported by the breadth of our client and partnership relationships. In 2023, we continue to scale and refine our business strategically, delivering strong growth and revenues, profitability and cash flow. We also drove stronger operating leverage while continuing to invest in our content and technology capabilities. We plan to maintain this growth momentum in 2024 with a more agile and focused organization. In 2023, we delivered revenues and adjusted EVTA at a high end of our guidance range with revenues up 20% and adjusted EBTA increasing 33%. This marks the third consecutive year we delivered at least 20% revenue growth. We also improved our adjusted EBTA margins by 1.8 percentage points and grew net cash flow from operating activities by 54%. highlighting the operational leverage in our model. Now I will touch upon several operating highlights in 2023, illustrating our exceptional performance. First, we are thrilled to be selected as the successful bidder for the global ATP data betting and streaming rights for the next six years. We are truly excited about that this will bring the tennis fans around the world. Both Sportradar and ATP have great ambitions to plan and revolutionize sports betting and tennis, bringing to market innovative products and services, some of which I will discuss shortly. In addition to ATP, we strengthened our content portfolio with other long-term partnerships, including with NASCAR, Comniball, the South American Football Confederation, and Bundesliga, the premier German soccer federation. Collectively, these partnerships fuel our ambitious product roadmaps to transform the sports betting experience, foster more in-play betting, while drive more value to our clients and sport radar. With our NBA partnership, we expanded several of our commercial deals, including Teaser Sportsbook and BetMGM for official NBA data. With these, we now have agreements with all the major operators in North America, which represents nearly 100% of the US market, signing on for official NBA data. We were also selected to power Taiwan's sports lottery, the sixth largest sports lottery globally. We have fully integrated sport radars sportsbook solution across more than 2,600 retail outlets as well as web and mobile channels. This is another great win and we now work with nearly 50 lotteries around the globe and intend to sign additional partnerships in the near future. These achievements and the results this past year speak to the tremendous progress we are making to cement our position as the partner of choice in the industry. Given the strength of our business fundamentals and the confidence in the positive outlook for the future, our board of directors have approved a 200 million US dollar share buyback, underscoring our confidence in the long-term value proposition. I also want to take a moment to update you on our CFO search. We have been conducting our search progress and have some strong candidates under consideration. We are confident we will select a strong individual to take on this role. I'm excited about the strong foundation we established and the momentum we have against opportunities that await us in 2024. Core to this is the depth and breadth of our real-time sports content, data and technology, which are the key competitive advantages and serve as a foundation to our growth engine. We cover approximately 1 million events annually across approximately 70 sports and partners with approximately 400 sports leagues and federations. We are the leading solution provider of unparalleled insights into sports. The continued enhancing and scaling of the real-time content and data fuels our innovative product development, helping to drive the future growth and leverage in our business. In 2023, we further strengthened these assets, most notably through our partnership with MBA and ATP. These global partnerships bring incredible reach and value to our overall content portfolio and product offering. As I have mentioned on previous calls, tennis boosts a global fan base of 1.6 billion eyeballs, making it the second most bet on sport, underscoring its enormous reach and appeal. Similarly, basketball is a huge followed global sport with 2.2 billion fans worldwide. ranked as the third most bet on sport. Our approach to our portfolio of rides is both strategic and deliberate, focusing on the rides that deliver the highest ROI and allow us to continue to invest, innovate, and deliver the best value for our clients, partners, and shareholders. We believe we have the right mix and scale of content. While we have an ability to acquire more rides, If the ROI makes sense, we do not need additional rights in order to deliver on our growth targets. Now turning to our product roadmap. It is backed with exciting innovations, leveraging our proprietary tech and deliver further value to our clients. From expanding live odds markets to enhanced streaming betting products to creating next level betting engagement tools. we continue to define the sports betting experience. As I mentioned, at the core of our strategy lies the productization and deep data and how it enables us to launch new and value-add products to the market that create a more immersive betting experience. Our partnerships with MDA and DATP are great examples of this. We are creating deeper insights from games and matches, driving innovation, enriching the fan experience, and simulating in-play betting. Let's talk about some of these innovations and new products. First, I'm excited to discuss our new Sportradar foresight streaming technology, which we launched initially with the ATP and went live earlier this month in Indian Wells. ProSight enhances our core audiovisual offering by seamlessly integrating animated overlays such as live broadcast graphics, statistics, and visualizations directly into the video stream of games for sportsbooks. This leads to an enhanced viewing experience and excites bettors about new in-play betting markets as we gear up to introduce micro-betting later this month. where we will provide sports fans with the opportunity to bet on key moments in the match. We are also very pleased to roll out our mBet product to the NBA's League Pass OTT platform. mBet, another industry-first product, integrates live betting content in real time into an OTT platform, offering a wide range of real-time data including point spread over on their insides and player props. MBAT creates the ultimate integrated bat and watch experience during live stream broadcast of a game and reduces friction when OTT viewers want to place bats. It is great to see that MBAT has already been significant uptake with unique users growing tenfold since it launched at the beginning of this year on League Pass. As we add additional betting functionality over the coming months, we anticipate usage to continue to climb. We are also very excited about our game-changing Alpha Odds offering, which builds on our market-leading core odds solution by generating odds tailored for individual sportsbooks based on their real-time liquidity. We are very excited how this has already proven itself in the marketplace, generating an approximately 10% higher margin for sportsbooks on their betting tickets. These are a few examples of products that have either launched or will launch in 2024. I feel great about our robust product roadmap and the opportunities it will unlock. Moving to our 2024 financial goals, we see a clear path to delivering robust growth. We expect another year of at least 20% revenue and adjusted EBITDA growth. Execution of our game plan in 2024 should position us for continued growth and meaningful operational leverage over the coming years, as well as strong free cash flow generation. Our growth in 2024 will be underpinned by our recurring business, which will benefit from underlying market growth and contractual increases in addition to unlock further value leveraging our best-in-class product and content portfolio. Furthermore, we will see a meaningful step-up driver by our newly acquired MBA and ATP rights. In conclusion, We are indispensable trusted partner of the sports industry delivering solutions at scale. Our exceptional leadership is laser focused on driving efficiency, excellence, and quality across the board. Underpinning this is our unwavering focus on client and shareholder value as we execute against our strategic priorities and 2024 growth plan. I will turn over to Gerald to review the financial highlights. Thank you.