Genius Sports Limited

Welcome to the Genius Board Q3 2021 financial results. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question-and-answer session. To ask a question during the Q&A, press star followed by one. Today, I'm pleased to present Brenda Buskell, Investor Relations Manager. Please go ahead.

Good morning, everyone, and thank you for joining us today. 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, filed on April 30th. 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.geniussports.com. With that, I'll now turn the call over to Mark Locke.

Good morning, and thank you for joining us today. We're thrilled to announce Genius' growth is accelerating an unprecedented level, and we have delivered another strong quarter, with record revenues growing over 70% year on year. On today's call, in addition to updating you on our performance in the quarter, I'd like to focus on three key updates. First, we'll provide quantitative detail on the recently announced agreements with our Sportsbook partners. Off the back of our exclusive NFL contract, we've structured mutually beneficial partnerships which fuel industry-wide growth and accelerate our journey to meeting long-term targets. Second, we plan to formally frame the size of the market opportunity for our media and engagement business. On our previous earnings calls, we've outlined our differential fan engagement solutions, and now we hope to round it out by articulating the total addressable market and our place in it. Third, we'll discuss our vision for the future and highlight some of the incredible opportunities that we have in front of us. We're excited to share the work we've done and the areas of investment that will enable Genius to continue to fulfill its place as the technology leader in the sports ecosystem. I'll cover each of these topics in more detail shortly. But first, I'd like to quickly recap on some of the highlights from the third quarter. We're very excited about the progress we've made since our last call. And this quarter's strong results reflect our team's continued execution. First, we've reported record revenue of $69.1 million in the third quarter. This represents another quarter of strong revenue growth, increasing by over 70% year on year, driven by well-balanced growth across all business segments, while adjusted EBITDA was broadly breakeven. As we've mentioned in the past, our core business strategy lies in our approach to official data and our deep, long-standing partnerships with leagues and federations worldwide. This quarter alone, we signed over 30 new rights deals with leagues as global and varied as Kazakhstan Football Federation, Canadian Soccer Premier League, China Super League, Croatian Basketball Federation, Israeli Volleyball Association, Drone Racing League, International Pool Association, Swedish Basketball Federation, and a personal favorite of mine, Professional Pickleball Association. I could go on. Each new league partnership expands the breadth and depth of our coverage of high-quality events and supports our customers' provision of content around the clock. As Q3, our leading rights portfolio includes 192,000 events under official rights, of which over 120,000 are exclusive. We are the leading technology provider to leagues and federations around the world. As an example, we recently announced that Second Spectrum was appointed the exclusive official tracking data provider of Danish Superliga and First Division. With Second Spectrum's cutting-edge technology, Genius will be able to provide Danish football fans with transformative new statistics, including player speeds, acceleration, deceleration, shot velocity, pass probability and expected goals. These insights will be made readily available across multiple platforms, combining tracking data, visualizations, augmented reality, and customizable graphics to deliver truly immersive fan experiences. This demonstrates our successful integration of recent acquisitions and our unique ability to create value across the sports and entertainment ecosystem. We've also continued to leverage our exclusive NFL partnership to build upon our key sportsbook relationships. These agreements enable us to provide a full range of official sportsbook content and fan engagement solutions to help our customers better engage and monetize their users. While we're still in the early stages of our NFL partnership, we're very excited about the vision to enhance the value of NFL's content and reimagine the way that sport is consumed. As we'll discuss in more detail shortly, our recently announced deals serve as a brilliant foundation to achieve our longer-term ambitions. In addition to the key sportsbook announcements, we've also announced our first team-based partnership with the Philadelphia Eagles, where we'll deliver real-time betting odds to drive fan engagement in Lincoln Financial Field sports betting lounges. A fundamental part of our NFL partnership is to provide innovative platforms for teams to engage with legalized sports betting, and so we're excited about this new development. Additionally, as part of our disciplined M&A strategy, we remain focused on the efficient integration of newly acquired businesses. For example, Spirable helped companies like Hennessy, Pringles, and Heineken increase brand awareness with sports fans through deeply personalized dynamic video content. Respirable technology allows brands to automatically deliver custom-tailored, data-driven content to sports fans in real time, which we look forward to rolling out to an even wider range of partners as part of our broader Genius platform. Additionally, using FanHub's platform, we launched new free-to-play experiences for partners across different verticals, including sports leagues, sports betting clients, and even brands outside of sports betting, such as Jersey Mike's and Buffalo Wild Wings. With leading technologies like Spirable and FanHub, Genius has broadened the options available to a wide range of customers who are seeking to connect with a sports audience in a purposeful and efficient way. With the commercial progress we've made this quarter and the positive global sports betting market backdrop, we're raising our 2021 revenue guidance to a range of $257 to $262 million, equating to over 70% year-on-year growth. Nick will cover the financial aspects in more detail shortly. A core focus of the business this quarter was to structure commercial agreements with our sportsbook partners to include the NFL offering. As many of you know, our partnership with the NFL is far more innovative than any other rights deal in the market and differentiated from the NFL's previous rights deals with its incumbent. We're extremely happy with the commercial deal we've made, so wanted to provide a bit more detail on our success. These are all encompassing strategic deals that include our full suite of products. Let me give you an example of a typical deal that exemplifies how we are engaging with US sportsbooks. They typically include an absolute commitment to use Genius data where we own the official rights. Streaming, outsource managed trading, and other value add technology services a commitment to advertising spend across our media products, including FanHub and Spirable, and an average three-year term providing a perfect balance between short-term visibility and medium-term flexibility as the market evolves. The NFL agreement has only increased our opportunity to successfully expand our commercial partnerships to include our all-encompassing suite of solutions. As we're partially through our first NFL season, we're happy to provide more color on the specific NFL component of these wide-ranging deals. To start, over 97% of NFL bets placed in the United States are powered by Genius Sports. We've agreed commercial terms that properly reflect the values.