Sportradar Group AG

Good day and thank you for standing by. Welcome to the Sport Radar second quarter 2024 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'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jim Bombasi, Senior Vice President, Investor Relations. Please go ahead.

Thank you, Operator. Hello, everyone, and thank you for joining us for Sport Radar's earnings call for the second quarter of 2024. Please note that the slides we will reference during this presentation will 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'll 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 forecasts. 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. We 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, and our findings with the SEC, each of which is posted to our investor relations website. Joining me today are Karsten Curl, our CEO, and Craig Selenstein, our CFO. And now, I'll turn the call over to Karsten.

hello everyone and thank you for being here today we are thrilled to share the incredible momentum we are experiencing across our businesses we feel an energy and that excitement in our growth and success and i look forward to discussing the remarkable progress we've made i'm very excited pleased with our third consecutive quarter of record revenue our revenue increased 29% year-on-year driven by an uptick of 59% in the US and 22% across Europe, APEC, and Latin America. This dynamic year in sports marked by several major international competitions propels fan engagement to unprecedented levels, further demonstrating the value of our product. I'm proud that we continue to reinforce our leading position as an essential partner to the sports industry. It's particularly encouraging to see that we achieved this top-line revenue while strengthening our business throughout operational efficiencies and a focus on enhancing cash generation. Our focus on maximizing efficiency led to excellent cash flow this quarter. We will maintain this focus to drive further improvement in this key metric. Our new CFO, Greg Feilenstein, will be a key partner in our efforts to continue optimizing our performance. I'm pleased to welcome him to his first earnings call today. He joined us in the beginning of June and has hit the ground running. Greg will provide more color on our financial highlights from this quarter in his remarks. We also welcome Bezaat Bishadi from Google, who will lead the advancement in our technology. Hiring a top international AI leader is a clear statement of our ambition in this important area. Under Bezaat's guidance, we will enhance our AI capabilities to drive efficiency and cost savings and develop products that transform the way sports are consumed in our sports platform. Our technology and history of innovation is one of our core competitive advantages together with our market leading content portfolio and distinctive client centric approach. We will drive deeper into these three areas during today's call. But first, I'd like to highlight two key milestones of which I'm particularly proud of. First, we expanded and expanded our exclusive multi-year partnership with UEFA, the governing body of European football. Starting with the 2024-2025 season, we are the only provider eligible to distribute official data for betting purposes. This deal strengthens our competitive global soccer rights portfolio. We view this as a strategic asset, given that soccer accounts for over 50% of global betting turnover and is surging in popularity in the US ahead of the 2026 World Cup. The agreement, which features a 33% increase in soccer match coverage to 900 annually, includes a first-of-its-kind agreement to distribute data for non-betting media, opening up new revenue streams for us. We will also, for the first time, have the ability to leverage advanced player tracking data to refine and enhance our leading AI-enabled betting and streaming products and services. With this deal, we have the exclusive right to use tracking data for the Champions League and the Europa League competitions for our products and services. Second, I'm increasingly pleased with the continued outperformance of our managed trading services or MTS business. A core solution designed to help operators manage and optimize their betting offering. So far this year, we have signed up 46 additional sportsbooks across some of the fastest growing betting markets globally, including Brazil and Africa. Our success with MTS not only underscores its vital role in optimizing an operator's performance, but also reflects what we see as our three core strengths, which I highlighted earlier. I'd now like to spend some time talking about these in more detail. SpotRater stands unmatched in both the depth and the scale of our coverage and client network. We bring together over 800 betting operators, 400 sport leagues, and 900 media companies who cover close to 1 million matches annually. This means we have access to the richest data sets in the market. The breadth and the depth of our content combined with this one technology enables us to provide clients unique insights into nearly all sports, as well as better preferences throughout the year. it creates a virtual circle of innovation that constantly sets new industry standards. Our growth is driven not only by our ability to deepen relationships with existing clients through effective upselling and cross-selling, but also by our success in attracting new clients. New market entrants turn to us because our deep understanding and our ability to address the involving and sophisticated needs. Our relationship with clients go beyond the transactional. It's a collaborative partnership where we work to help clients enhance their value proposition and diversify their revenue streams. Our unwavering focus on meeting our clients' needs is the reason we continue to strengthen existing relationships and frog new ones. In fact, our net retention rate stood at 117% for the quarter, demonstrating that our clients choose and stay with us and do more with us year after year. We work with all the major U.S. market leaders, including FanDuel and DraftKings. Our client-centric approach has helped drive many of our U.S. clients' rapid growth and innovation since launching in the U.S. market. Our partnerships often started with supplying live data to power their fantasy sports offerings. When the US sports betting market legalized in 2018, Sportradar supported building up their online betting products. As their business expanded, we continually adapted to meet our customers' involving needs, covering additional sports and developing tailored product features, including in audiovisual streaming services and their consumer acquisition efforts through our ads products. This client-centric focus and innovation in product development highlights why we are a strategic partner to many of the leading operators. For example, our partnership with FanDuel is a core long-term partnership. We have supplied data to FanDuel for multiple sports since 2015, when it was a fantasy sports business and data and streaming since its launch of sports betting in 2018, as well as other services since then. We recently extended our relationship with them through 2031. Innovation is central to our culture. We continue to lead charge in the industry and through our application of ai across the product suite for over a decade we have been at the forefront of integrating ai into sports such as tennis table tennis basketball through machine learning and computer vision as i mentioned asia's leadership as cto and caio will help to propel our efforts even further to enhance our product portfolio and to drive innovation. Our mission is clear. Harness the full potential of AI to transform the sports economy. Our data advantage is crucial, but it's not just the data. It is also what we do with it on our sports platform that makes a difference. Our extensive and historical content portfolio Combined, this advanced AI positions us uniquely to tackle this challenge and seize new opportunities. And we are doing just that. We are transforming how fans interact with their favorite sports through products such as Foresight Streaming, our AI-enriched streaming technology, and MBED, which integrates batting directly into OTT platforms. We expect to use GenAI to build new experiences which can answer all types of questions about ongoing and historic games to new multimodal experiences for sports consumption that are hyper-personalized to fans. We see this as the next phase in the evolution of sports consumption. We are also using AI to reduce friction in client workflows. For example, by building AI powered chatbots that can handle a significant amount of the hundreds of thousands of support requests we receive annually. We will reduce manual processing, speed up processing time, and increasing customer satisfaction. This means we will be able to address more queries and do it faster. These innovations are setting new standards for our client engagement and creating new opportunities and revenue streams for our company. We believe we have significant growth potential and see an opportunity to become an even more essential and integrated partner for our clients and partners as technology opens up new ways to engage the next generation of sport batters and fans. I look forward to share our exciting plans in the future, including our long-term growth story or exciting roadmap for driving innovation and our opportunity to drive operating leverage and tremendous shareholder value at our upcoming investor day, which we are planning in New York City in early 2025.