Genius Sports Limited

Ladies and gentlemen, thank you for holding. Welcome to the Genius Sports first quarter earnings results 2022 call. 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, please press star followed by one. Today I am pleased to present Genius Sports. Please go ahead with your meeting.

Good morning 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 March 18th of this year. 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 our CEO, Mark Locke.

Good morning, and thank you again for joining us today. For those who have followed Genius over the past few months, you may have heard us frequently reference our investor day, where we provided a deep dive on our business model and outlined our strategic plan, supporting a profitable outlook for 2022, 2023 and beyond. Our 2022 outlook also included detailed quarterly guidance on a segmental level to demonstrate near-term progress of that strategic plan. We are pleased to share that we are successfully executing on that plan to begin the year, and we have delivered financial results ahead of our expectations in the first quarter. Our group revenues increased 60% year-on-year to $86 million, exceeding our guidance of $78 million. Group adjusted EBITDA was negative $2.9 million in the quarter, also ahead of our expectations of negative $5 million. While we maintain a long-term view of the business and overall vision, this near-term milestone gives us confidence in our ability to execute against our profitable forecast for the full year. Much of our success this quarter came from the continued execution of our core strategy of expanding our tech partnerships with leagues, sportsbooks, media partners, and brands. To start, we continue to actively manage our portfolio of data and streaming rights in the quarter. But let me be clear. We have a deep portfolio of official content, including flagship assets that carry value in various regions across the world. the NFL in the US, English Premier League in the UK, CFL in Canada, or Argentinian and Colombian football in Latin America, just to name a few. This, along with the long tail of other events under our official coverage, gives us the competitive advantage and allows us to approach new rights deals from a position of strength. In other words, we aim to only acquire new rights where we see commercial value, particularly for sports or regions with strategic importance to genius. We obtain rights because we are increasingly deploying our technology as the core component of our partnerships. This is about much more than just data for betting. Leagues are becoming more sophisticated and see the value in our technology. Our full-scale platform of solutions helps leagues better engage and understand their audience, which enables additional monetization opportunities. Let me walk through a few real examples from the quarter to illustrate the ways we work with leagues beyond just sports betting. First, we expanded our capabilities with the NCAA by powering augmented broadcast of the men's and women's basketball tournaments in March. we'll cover this in more detail shortly also within college sports our deal with the mid-american conference will leverage our full suite of services including live data collection and integrations second spectrum tracking and various fan engagement marketing solutions and sponsorship inventory marks and logos in stadia signage digital media and customer acquisition platforms The NBA G League will also leverage Second Spectrum's optical tracking system and advanced analytics to support players, coaches, fans and broadcasters. We are also announcing a new partnership with Icelandic Football, where Genius will provide a suite of free-to-play games to deliver engaging digital experiences for fans. Collectively, we expect the partnership to help accelerate the growth of the sport in Iceland and internationally. Lastly, we announced our first tracking and video augmentation partnership in Latin America with Liga MX franchise Club Mexica. Through our second spectrum technology, we'll capture transformative new data points like player speed, expected goal conversion rates, shot velocity, and more, all of which powers immersive experience for fans and insights for players and coaches. So, why are these partnerships so important? Our unique tech capabilities gives us a differentiated approach and helps Genius secure long-term rights deals. They integrate our technology, making us a sticky partner. They enable us to monetize data in more ways than just sports betting. And our range of solutions diversifies our revenue streams generated from leagues and clubs, even when data rights are not on the table. While we are continuing to strengthen our league partnerships, we are seeing similar success with our sportsbook partners as well. In this quarter alone, Genius acquired 13 new sportsbook customers that contributed to our financial results. Importantly, we have also expanded our relationships with existing customers by successfully cross-selling various bookmaker services and content, which provides incremental revenue uplift. We also benefited from continued market liberalization, particularly in North America, which saw successful launches in New York and Ontario, which opened after the quarter. The ongoing legalization of online sports betting is an important and unique driver of profitability for Genius. Unlike B2C sportsbooks operating partners who have to invest heavily to acquire customers and win market share in new states, Genius' business model benefits from economies of scale. What this means is that as soon as people in New York, Ontario, Brazil, or any other state or province start wagering, Genius enjoys immediate revenue at little incremental cost, allowing those revenues to contribute meaningfully to our margins. It is what makes our business model so distinct in the sports betting ecosystem. We also deliver strong results in our media and engagement segment, This was primarily organic growth driven by higher than expected programmatic advertising spend around the Super Bowl and March Madness. Our unique access to real-time data and odds, combined with audience data obtained through our lead partnerships, helped to deliver strong results in our performance-based advertising campaigns for customers, which helped to drive increased spend in the quarter. We'll touch on this again shortly. Our execution in this quarter and momentum through the remainder of the year gives us confidence in reaffirming our guidance for 2022 and 2023. Nick will cover our detailed results and outlook shortly. I've already spoken at length about the importance of our tech-driven lead partnerships, and second spectrum is an important pillar of our offering. Our differentiated technology helps further embed genius in the sports, betting, and media ecosystem and increases our competitive advantages. Each quarter, we gather to show real-life examples of how this technology is being used by leagues and broadcasters. Our most recent and notable application is during the men's and women's Division I basketball tournaments during March Madness. You may have seen ESPN's megacast presentation of the NCAA Women's Final Four and National Championship Games, which featured real-time data visualizations and video augmentations powered by second spectrum. For example, viewers who turned into the ultimate broadcast could track real-time shot probabilities, player distances, and other data-driven graphical overlays. This live tracking and video augmentation tool was also used in the broadcast of the men's March Madness tournament, bringing fans even closer to the action on the floor. This all contributes to a more personalized and engaging viewer experience, which brings increased value to leads and broadcasters alike. In fact, the NBA on ESPN and NFL We're each nominated for Sports Emmy Awards with the support of Genius and Second Spectrum. We are proud of our partners for their nominations and we're delighted to have been part of it. I also discussed free-to-play games as another key tool for Leeds to digitally engage fans and broaden their reach. We've delivered this to Leeds in federations like the NFL, MLB, IOC and others. This is true not just for leagues and federations, but for any brand seeking to connect to a sports audience, such as Jersey Mike's, Buffalo Wild Wings, or News UK. Through the acquisition of FanHub, Genius has strengthened its total offering with a suite of best-in-class free-to-play games, and our solutions have driven success for our customers. We continue to deliver results that others in the space only talk about. This has not only helped us to secure long-term technology partnerships with leagues, but also diversified our revenue streams. I'd like to give you a closer look at how we drove success for our customers in this quarter. First, in partnership with the MLB, we launched a series of free-to-play games to start the season, which includes the well-known Beat the Streak game. This was designed to help the MLB engage fans, capture first party data, build holistic views of their fans and generate excitement to begin the season. With the addition of FanHub, Genius has expanded its relationship with the MLB by further ingraining itself in the MLB's wider tech ecosystem and strengthening its position as a trusted partner across multiple areas of expertise. We also launched the NFL Super Bowl Challenge, which has helped the league reach an international audience across nine countries. The NFL set out a goal to acquire and engage new NFL fans in international markets, and our free-to-play games are an important tool for them to achieve this. Like the MLB, the NFL can use this platform to better understand the international fan base, which can then be leveraged to better activate their own sponsors. As you can see in the images on the slide, Again, our partnership with the NFL expands well beyond just data for betting, and this is an example of the important role we play in the broader fan engagement objectives. Free-to-play games are just as valuable for brands as they are for leagues, and our work with BetVictor is an excellent example. This is a sportsbook brand that utilizes free-to-play games to convert a wider pool of potential betting customers. Free-to-play contributed meaningfully to our results in the media and engagement section, but the biggest organic driver of revenue was our performance-based digital advertisers. Genius is uniquely positioned to help brands acquire customers more efficiently. This is the result of our access to data, real-time sports data, live odds data, and audience data, all of which is obtained in partnership with the leagues. This enables us to deliver highly personalized content to the right audience at the right time, based on the unique understanding of that audience and the relevant context from live sporting events. This is what differentiates our programmatic advertising and how we have executed highly effective and cost efficient campaigns. This is exactly why Sportsbook customers continue to spend with us in the quarter, especially around key events like the Super Bowl and March Madness. To give you some context, during the 2021 and 2022 NFL season, Genius acquired one new first-time depositor every five minutes on behalf of our Sportsbook customers. In the 48 hours leading up to the Super Bowl, we acquired a new player every 24 seconds. Importantly, we've done this as an average CPA of $225, which is 25% below the industry average. In a world where brands are rationalizing promotional spend, Genesys performance-based digital marketing solutions present a cost-effective solution to acquire players with long-term value. This is separate and distinct from promotional sign-up bonuses or national television advertising. And this technology is as high-performing for customer retention as it is for customer acquisition. So we're optimistic about the opportunities ahead in this segment. With that, I'll now turn the call to Nick, who will cover our financial results in more detail.