Sportradar Group AG

Good day and welcome to the Sport Radar first quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1. As a reminder, this call may be recorded. I would like to turn the call over to Jim Bombasi, head of investor relations. Please go ahead.

Thank you, Operator. Hello, everyone, and thank you for joining us for Sport Radar's earnings call for the first quarter of 2024. 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 analysts and investors. In the interest of time, please limit yourself to one question and 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 6K filed today with the SEC, along with the associated earnings release. We assume no obligation to update any forward-looking statements or information which speaks 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 relief supplemental slides and our filings with the SEC, each of which is posted to our investor relations website. Joining me today are Carsten Curl, our Chief Executive Officer, and Jared Griffin, Chief Financial Officer. Now I'll turn the call over to Carsten.

Good morning and good afternoon to everyone. We are excited to be speaking to you today about the momentum we are seeing across our business and our strong start to the year. There are a number of key takeaways I want to highlight from the quarter and for the year ahead. First, we delivered strong top-line growth with revenues up 28% as we saw strength across our business and benefited from the uptake of our MBA and ATP content and solutions and the strong execution of our team. Second, We continue to be laser-focused on driving efficiencies in our organization and delivered 18% adjusted EBITDA margins, which were ahead of our estimation. Third, we are raising our guidance, giving this strong performance and our confidence in the year ahead. We now expect to grow full year revenue in adjusted EBITDA by at least 21%. Fourth, We recently named key additions to our leadership team, naming a new CFO and a chief technology and AI officer. And fifth, we are commencing our share repurchase program in the upcoming trading window. This action is supported by our confidence in our outlook and the strong value we see in our stock. The success we are seeing is underpinned by our competitive advantages. PodRater is a global technology leader with a differentiated and commanding position in the sports ecosystem. No other company matches our scale, reach our resources, bring together over 800 batting operators, 400 sport leagues, and 900 media partners, covering nearly a million sport matches every year. The breadth and depth of our content data and leading technology provides us unmatched insights into the diverse portfolio of sport and batter's preferences, enabling us to create innovative solutions for our clients and engaging and personalized experience for the sport fans worldwide. Our confidence in the year ahead is backed by our consistent track record, having achieved profitable revenue growth of at least 20% for each of the last three years, as well as being cash generative, we believe there are no other companies in our peer group, public or private, that have achieved this. Now let's turn to our quarter one results. We saw strong results on both the top and bottom line, as we grew revenue 28% year over year to 266 million euros. and adjusted EBITDA 29% to 47 million euros. This marks a great start to the year. Before I get into the details of the results, I wanted to note that this quarter we simplified our financial reporting approach. To align with the recent changes to our organization and to address feedback we have received to present our financials in a simpler way, and that aligns with our business fundamentals. And now to our revenue. Patent technology and solution revenue were up 35%, and sports content technology solutions revenue were up 5%. From a geographic mix, rest of the world revenues were up 90% year over year, while U.S. revenues were up 65% year over year. we saw the tangible and significant benefits from our ATP and MDA partnerships, which are amplifying our revenue growth, helping drive pricing and customer uptake of additional services. The fact customers' uptake on ATP content and solutions is running above our fence, and we have already seen more than 50% of ATP clients signing up for our four audiovisual products. A number are also taking our latest innovations, like sport radio four-star streaming, reinforcing the premium nature of this content. Given this performance, we have raised our full year's outlook for revenue and adjusted EBITDA growth to at least 21%. Underscoring these excellent results, We will be putting our $200 million share repurchase program to work during the upcoming trading window. Now turning to some of the operational highlights in the quarter and more recently. We are very pleased to have recently announced a new long-term partnership with UTR Sports for the UTR Pro Tennis Tour, the top tennis tour for racing professionals. Harnessing our industry-leading AI and computer vision technology, we will create new analyzers and insights in each match, helping to drive fan engagement and expanding in-play opportunities. Tennis is the second most set on sports, and UTR provides sport radar with a consistent volume of tennis matches throughout the year. complementing our tennis portfolio and reinforcing our selective approach to expand our sport. We saw continued momentum in our core products in the quarter, like our managed trading services. Our MTF solution, which offers sophisticated trading risk and liability management for sportsbooks, continues to be a leader in the marketplace. Turnover grew 28% year over year to approximately $9 billion this quarter, ranking us as a top bookmaker globally based on liquidity. In our ad business, we deliver personalized digital advertising at scale that drives customer acquisition for our online betting and casino plans. We work with over 150 brands across multiple digital media channels, including programmatic and paid socials. With over 10 billion ad impressions delivered in the first quarter alone, we rank as one of the top advertisers in the online betting and casino space. Key to our success is our ability to transform the deep data and rich insights from our portfolio of brands, enabling us to develop new and enhanced products and create a more immersive betting experience and stimulate in-play. One of the exciting products we recently launched is AlphaOps, a game-changing offering which builds on our market-leading for op solutions by generating ops tailored for individual sportbooks based on their real-time liquidity and deep data. It has proven to generate a higher margin for sportbooks on their betting tickets. In fact, for the recently concluded UEFA European Championship, championship qualifying match, it increased profits by an average of 15%. While we initially launched Alpha Odds in soccer, it is now live in tennis and seeing promising results. And we will soon be introducing it to basketball. By quarter one 2025, we plan to release it in three more sports, bringing total coverage for our turnover to approximately 90%. We are leading when it comes to innovation and product development, and this is fueling our growth, in fact. Sport Radar made Fast Company's 2024 list of most innovative companies in sport for our leading computer vision technology and enhanced table tennis solutions. Our leadership and team are the drivers for this success. And they have an unwavering commitment and dedication to making Sportradar one of the most exciting places to be in the sport industry. On this front, we recently welcomed two talented executives on the leadership team. I'm delighted to welcome Greg Feilenstein as our Chief Financial Officer and Bijaz Bijadi as our Chief Technology Officer. and Chief AI Officer. Greg is a seasoned finance executive and has over 30 years of experience working in finance on US publicly listed companies, such as Discovery, News Corp, and Viacom. He joins us from Lindblad's exhibitions, where he was CFO for approximately seven years. Greg will be coming on board starting June 1st, and I'm looking forward to partnering with him as we look to continue to drive our business momentum, operational leverage, and shareholder value. Bejas joined us from Google, where he played a key role in developing Google's AI strategy and commercializing some of its most recognized products, including Google Assistant, Google Land, and NextGen AI Assistant. I'm very excited to have him sitting in Switzerland headquarters with me. His dual job title reflects the importance we place in the development of our AI capabilities and the role which he is having in shaping it. You will be hearing more about this in the coming quarters, but I believe his impact will be transformational for our company. These additions complement an executive team that is an already highly talented, passionate, and driven to win. I have great confidence in our team's ability to continue to drive our business forward in the years ahead. I also want to take this moment to thank Juror for his contributions and leadership. He brought meaningful strengths in our financial organization and it's leaving us with a strong team and foundation. I know I speak for the entire organization when I say it has been a great pleasure working with Chair, and we wish him the best of luck in his future endeavors. Now touching on our key priorities. Our leadership team is focused on driving shareholder value through the execution of our growth strategy, where the fundamental pillars are centered around content, data, and technology. By exploring the full depth and breadth of our content data-wise and technology portfolio, we are investing in exciting new products that will deliver future value for our clients and enhancing our growth in the coming years. By using our advanced technology and AI capabilities, we are enhancing our core products across ops making, trading, and marketing services. This, in turn, will help drive fan engagement and operators' monetization. The strategy beyond the immediate priorities is taking shape, with a key step being the recruitment of a technology leader with data skills and experience. As a technologist, this truly excites me. I look forward to sharing more about our plans around AI and our exciting future in the coming quarters. To wrap up, this is the year of execution and we are delivering on our core commitments for 2024 by positioning ourselves for continued growth in the exciting year to come. It was an excellent quarter and we are well positioned to continue to deliver strongly in the year ahead. Our financial performance was underpinned by the depth and scale of our business fundamentals. The strategic investments we are making for the future and our leadership team laser-sharp focus on execution and driving efficiency. All of these factors are enabling us to continue to lead the industry with our growth strategy and unwavering focus on client and shareholder value. I'm extremely optimistic about Sport Radar's outlook and long-term future. And now, I will turn it over to Jeho.