Genius Sports Limited

Ladies and gentlemen, welcome to the Genius Sport Q1 Results 2021 conference call. Throughout the call, all participants will be in a listen-only mode, and afterward, there will be a question and answer session. To ask a question during the Q&A, press star followed by one. Today, I am pleased to present Mark Locke, CEO, and Nick Taylor, CFO. Please go ahead with your call.

Good morning, everyone. Before we begin, we'd like to remind you that certain statements made during this call may constitute forward-looking statements that are subject to risks that could cause our actual results to differ materially from our historical results or from our forecast. We assume no responsibility for updating forward-looking statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our last annual report on Form 20F. During the call, management will also discuss certain non-GAAP measures that we believe may be useful in evaluating Genius' operating performance. These measures should not be considered in isolation or as a substitute for Genius' financial results prepared in accordance with U.S. GAAP. A reconciliation of these non-GAAP measures to the most directly comparable U.S. GAAP measures is available in our earnings press release and earnings presentation, which can be found on our website at investors.geniusforce.com. With that, I'll now turn the call over to Mark Locke.

Good morning. Thank you for joining and welcome to our first earnings call as a public company. I want to start by extending my gratitude to everyone who has contributed to this moment. To our clients, customers, advisors, investors, and of course, our employees, we thank you. You all believe in our core mission of being the official data technology partner that powers the global ecosystem that connects sports, betting, and media. You have enabled us to get to this point, and I'm looking forward to using these quarterly earnings to update you on our business activities and progress towards our long-term targets. And to new potential investors, welcome, and thank you for joining us today. Before diving into the results, I'd like to start with a brief overview of our business and the opportunity ahead of us. Genius is uniquely positioned at the heart of the sports ecosystem that connects sports, betting, and media. Over our long history, we've built a proprietary technology platform that our partners depend on to streamline data collection and distribution, engage audiences, and ultimately, monetize sports fans. By partnering with hundreds of sports leagues and federations, sports book operators and media brands across the globe, we are well positioned to capitalise on the growth in the sports betting market. While our fast-growing sports betting market presents the best opportunity to monetise sports fans today, our vision stems far beyond the boundaries of sports betting alone. As the world of sports, betting, and media converge over the long term, we're focused on building a tech platform that enables our partners to monetize their audience in a multitude of ways tomorrow, whether through betting, ticketing, merchandising, or others. Our deeply integrated technology and data partnerships puts us in the best position to expand our value-added services and solutions and continue to grow as the industry evolves. Before we move onto the quarter, we would like to reiterate our long-term financial targets. We are adding more value to our customers than ever before, and we are on a strong march towards our long-term revenue target of 5% of industry gaming revenue. And we continue to target a long-term EBITDA margin of 40%, reflecting the strong underlying unit economics of our model. With that, we are proud to share with you the fantastic momentum behind us at the moment and the significant steps that we have taken in the quarter to accelerate growth and capitalise on the enormous opportunity ahead of us. I'll quickly touch on the six key takeaways from the quarter before we dive into performance in more detail later on the call. In the first quarter of 2021, Year over year, we grew our revenues by 52% to nearly $54 million, and our adjusted EBITDA by over 400% to $9.3 million. We are very pleased to have announced an exclusive six-year strategic partnership with the NFL that is completely innovative in its structure and revolutionary in its potential. This agreement combines our leading capabilities across sports, betting and media for the preeminent league in the world sports and is a major statement of intent for our entire industry. We also acquired two complementary and highly innovative technology companies, Second Spectrum and FanHub. These strategic acquisitions will both strengthen our core offering and benefit from our scale and distribution. Given the strong performance of the underlying business and following the aforementioned key transactions, we are revising our full-year 2021 revenue guidance to a range of $250 million to $260 million, up roughly 30% to 35% from where we guided the market to previously. Lastly, we're thrilled to have welcomed David Levy as our new chairman. During his 30-year tenure at Turner, he oversaw its leading portfolio of premium content. With his incredible track record working with many of the biggest names in sports and media, David's appointment is another strong statement of our ambition and position. So far, 2021 has been all about continuing to execute on our long-held strategy. One of our most important differentiating factors is our steadfast commitment to official data. For those of you who are new to the space, this is the source of live sports information and facts that has been directly approved and sanctioned by the relevant sports league or federation. As more and more sports proactively engage with the betting industry, official data is becoming increasingly valuable. Additionally, the rapid growth of live betting in regulated markets worldwide means that Sportsbook operators place tremendous value on the speed and accuracy of official data. The scale of our portfolio, built up over more than a decade, puts us at the very forefront of this data trend. We've grown our portfolio by 25% year-on-year to 185,000 events under official rights. of which 112,000 of them are exclusive. This has included adding premium content such as MLB and a series of rapidly growing and thrilling events from Major League Rugby to top-tier Japanese basketball, amongst others. This number does not include the NFL, which was added to our portfolio after the reporting period. As many of you know, our approach is unique in that we acquire a large proportion of our rights through contra partnerships with sports leagues and federations. We have supported sports at every level with our leading data technology solutions that help them to create new revenues, drive fan engagement, and increase efficiencies. In the first quarter, we demonstrated the value of our technology. Our LiveStats technology was courtside every March Madness game, capturing advanced team and player statistics that powered the NCAA's broadcasts, their websites, and more. You may have seen our Genius Sports logo at the end of every broadcast throughout the tournament. We also launched our Ice Hockey LiveStats solution. providing a valuable tool that will greatly strengthen our hand in negotiations with leagues across this sport. Our media operations also continue to accelerate. Our unique understanding of the sports and sports betting audience, coupled with our exclusive ownership and control of live sports data and the ad tech platform, enables us to offer personalized suite of solutions for our entire ecosystem. During the first quarter, we announced a new marketing partnership with Fangio to run personalized targeted ads in states where they operate. We are also expanding our partnership with the MLB to continue using our digital marketing solutions to drive ticket sales for the leagues and its clubs. Our NFL partnership is huge for supercharging our media operations as we will represent their sports betting advertising inventory across all NFL-owned and operated digital platforms. And through the quarter, we continue to grow our sports betting presence globally, winning new deals with clients, including Winbet, Talienti, Parimatch, Snye, and Microgame. We're proud of our execution to date and a better position than ever to capitalize on the rapidly expanding legalized US betting market. We've established a long-term exclusive partnership with the NFL, building off our existing agreements with the NBA, MLB, NASCAR, and more. This allows us to provide premium official content on the most popular competitions. The business model we have in place allows us to participate in the upside of the US market. As the US market's revenues from gaming grow, our revenue also grows, regardless of which B2C player wins share. We're currently permitted to supply data in 13 US states and three tribal jurisdictions and have a proactive U.S. license strategy, ensuring that there is no market in the U.S. where we will not be able to operate. Lastly, our data-driven fan engagement and advertising solutions allow us to monetize the significant marketing spend that sportsbooks are devoting to acquire customers in the United States. Genius uses its unique access to official live sports data and combines that with audience data, our technology platform, and a comprehensive understanding of global betting behavior to offer advertising and fan engagement solutions that no one else can. Genius has a unique understanding of fans, live sports events, and the sportsbook market, enabling us to offer large-scale targeted advertising campaigns, which are delivered through cost-effective, data-driven, real-time bidding for publishing space. As an example, our proprietary technology uses a combination of data sources to influence campaign pacing and target criteria in real time. This allows us to deliver personalized content to the right audience at the right time on behalf of our sportsbook partners, which optimizes their customer acquisition costs. Genius also develops fan engagement widgets for sportsbooks and digital publishers, featuring live game statistics and betting-related content that drives key operator retention KPIs. These are just a few examples of the many media and fan engagement solutions which we offer our customers. In all cases, Genius is compensated through a performance-based model which fully aligns our interests with that of our partners. In the next few slides, I will go into more detail about the strategic transactions I previously mentioned, starting with the NFL partnerships. This year, we signed an exclusive six-year partnership with the NFL, a partnership that, as I said earlier, is completely innovative in its structure and revolutionary in its potential. So I'd like to take a moment to explain the core components of this agreement and why we're so excited about the value that it unlocks for Genius Sports. It is crucial to understand that this is a true technology partnership which will drive the global convergence of official data, betting, streaming and digital media. Our partnership falls under four categories. First, we will be the exclusive distributor of official data for sports betting for the NFL. Using official data is the only way for sportsbooks to guarantee low latency, accurate and secure data for their betting products. and now that the data for the NFL events can only be obtained through Genius. This gives us tremendous ability to increase our utilization rates across all of our content, since the contractor structures as a package deal that typically include a variety of content and services. Second, Genius will be the NFL's exclusive distributor of official data for the media markets. This manifests itself as innovative, data-driven, NFL-specific product to support media partners to increase their audience engagement and drive monetization opportunities. Thirdly, we will be the exclusive distributor of live streaming for the international sports betting market. Our streaming operations have grown rapidly over the last 18 months, and adding such premium content will help us to achieve new integrations with sportsbooks in the US and worldwide. These integrations allow us to offer our rapidly expanding portfolio of streaming events across multiple sports. And lastly, as mentioned previously, Genius is now the NFL's exclusive sports betting and iGaming advertising partner. So we are the exclusive provider of the NFL sports betting and iGaming advertising inventory in regulated states across the world. These exclusive rights to the NFL audience, live data, And proprietary ad tech optimizes customer acquisition and retention and positions as well to take a significant piece of the marketing gold rush. It is important for me to reiterate that this partnership is much more than a betting rights deal. The NFL has not just swapped out the incumbent for Genius Sports. This is a major partnership that, through Genius and the NFL's Joint Innovation Technology Center, we will develop the next generation of products and services for the NFL. Genius has the unique capability to work with media partners to create engaging content by bringing data to life, integrate sportsbook brands across media platforms, addressing the right audience at the right time, provide sportsbooks with data and technology to deliver a quality betting product to their end users. And finally, it allows us to unlock the true value of the NFL's official data. Genius is unique in its ability to take full advantage of its strategic partnership with the NFL. We expect new and existing customers to appreciate the step-changing value of our official data rights portfolio, as well as allowing us to showcase our unique and broad value-added services. Our suite of products and services are sold as a package, so the addition of the NFL massively increases the overall value of our offering. Our deal with the English Premier League in 2019 allowed us to sell more to our Sportsbook customers, increase our pricing, and take a greater share of wallet. We expect the NFL deal to do this and more. In particular, our exclusive advertising relationship puts Genius in a unique position to acquire customers in the US in a differentiated and cost-effective manner through the NFL season. which is the single largest customer acquisition driver in the US. This allows Genius to earn marketing spend by accessing this area. Concurrently, Genius will work with the NFL to develop the next generation of products to engage fans in both media and betting through its exclusive access to data and proprietary technology. Genius is unique in its ability to maximize the value of the NFL partnership through the wide range of services we offer. This makes the NFL data deal more valuable to us than it would be to anyone else because of the multitude of unique ways that we can monetize it. As I mentioned at the start of this call, our mission is to provide the entire sports, betting, and media ecosystem We can only do this if we continue to innovate and provide new levels of data, content, and technology services to our partners. This has been central to our recent acquisition of Second Spectrum and FanHub, two highly complementary and innovative technology businesses. I'd like to take a few minutes to give you a short overview of both these acquisitions and how they accelerate the pathway to our long-term targets, starting with Second Spectrum. Second Spectrum is the world's most advanced data tracking technology provider, with official partnerships with the NBA, English Premier League, and MLS. They provide highly innovative tracking, analytics, and data video augmentation solutions that will help us create an end-to-end data offering for our sports, betting, and media partners. Second Spectrum has also established partnerships with several major broadcasters and media companies, including ESPN, BT Sport and Bally Sports. The acquisition accelerates our plans to converge sports, betting and media to power the fan experiences of the future. Their best-in-class artificial intelligence technology team, computer vision, and machine learning products will help bring together our data, betting, streaming, marketing, and fan engagement solutions into one. Our relationships with hundreds of leagues worldwide and proven track record of delivering major technology products will unlock significant future growth at Second Spectrum. This acquisition aligns with each of our key strategic goals and expands our long-term addressable market. I'll now turn to FanHub. In the first quarter, we were also thrilled to announce the acquisition of FanHub, a leading provider of free-to-play games and digital fan engagement solutions. Like Second Spectrum, FanHub will enhance our offering across our entire sports, betting, and media ecosystem. Fan hubs leading free-to-play solutions will be fully integrated and create greater engagement, which in turn will create new monetization opportunities. Free-to-play has become essential for increasing fan engagement across second and third screens, allowing partners to deliver sponsorable digital assets that their fans love and derive demonstrable value for sponsors. As part of the push towards deepening its relevance and value to clients, Genius Sports identified an opportunity to acquire the market leader, gaining an early mover advantage and a pre-existing technology suite with a tier one client set and a highly engaged user base in their millions. FanHub already works in partnership with some of the largest companies across Genius Sports ecosystem, including the NFL, MLB, MLS, Betway, and Pointsbet. Direct fan engagement is a high priority for customers, clients, sponsors, and media partners. And our distribution network will generate significant growth opportunities and revenue synergies for FanHub's services. FanHub and Second Spectrum are excellent examples of our disciplined acquisition strategy, and we look forward to updating you further on their progress as we integrate them into our product offering. With that, I will turn it over to Nick to walk us through the quarterly financials and revised guidance.