Genius Sports Limited Ordinary Shares

Q4 2022 Earnings Conference Call


spk_0: your day and welcome to the junior sports fourth quarter two thousand and twenty two earnings results conference call all i have been placed on need to prevent any background noise after the speakers remarks there will be a question and answer session if you like to ask a question during this time simply press start followed by the number one on your telephone keypad if you would like to withdraw your question again press the star one thank you i will now turn the call over to genius or it's you may begin your conference
spk_1: the morning a baby producing at the day before he began we like to remind you that third date with made during this call may come to do boy looking statements that are subject to risk that could cause our actual results to differ materially from one dog or result or from our forecast with no responsibility for updating forward looking statements and it that game and should be can put it in conjunction with cautionary them into their earnings release and risk factor discussion verbally to the fcc including our annual report on born twentieth bothered the fcc on march eighteen twenty twenty two as amended by form twentieth and father the se te on november ten twenty twenty two during the call me as we walked that it's got thirty nine and gap measure that we believe maybe one evaluating to units is operating performing big measures should not be considered in isolation as a substitute for gelatin financial adults prepared and according to the left gap a reconciliation of these non gaap measure for the most directly comparable you got measure is available in our early gradually and earnings presentation which can be found on our website and a third dodgy is worth dot com with that on after the call overthrow of my glock
spk_0: can you i mean and thank you for joining us today twenty twenty three than exciting get genius sports and opposition strategically technologically i'm financially is the best to does that have been during my time in see the company
spk_1: before we get into the year ahead i'd like to revisit the objectives but we outlawed in our invested a the beginning of twenty twenty two as you may recall we just played several financial an operational targets as part of strategic plan in particular we outline twenty five different financial targets to provide clear benchmark for success and to hold ourselves accountable to our shareholders throughout the year
spk_2: we do you know behind us i'm pleased to share that our team of delivered or exceeded all twenty five of those targets throughout the year while at the same time executing on our strategy to deliver a long term goals
spk_3: among the highlights
spk_1: we delivered forty one percent constant currency revenue growth to three hundred and forty one million dollars and sixteen million dollars and adjusted ebitda each have performing all guidance all this despite strong macro headwinds including the significant ethics challenges and the station of business in russia
spk_2: we continue to execute and plan class across the globe supporting hundred late and sports with partners in every time zone a highly profitable and cash generated call and line business outside the u s continued scale back in times of sight
spk_1: and in which is now in the high thirty percent range we still see plenty of profitable great ahead
spk_2: in all second full year in high growth us market we've established ourselves as the dominant player with market leading competitive advantage and revenue growth of the hundred and percent far outpacing the growth of the border industry keep in mind the us is still a relatively new market within our global business we expect this regime will continue to be a long term driver and significant growth genius particularly and or lawsuits continue to narrow year over year and we approach profitability in the us in twenty twenty four
spk_1: we have continued to consolidate our technology position a have to be consistent are deploying technology across the high profile league sports but and broadcasted including the nfl cbs e s p n and amazon just to name a few albania business rules about the performed me that she got objective of not only growing rapidly than access to fifty percent but also diversifying our client base to include long term partnerships with major global brands including pepsi right to express or double destination canada and much more
spk_2: and this business really is just getting started
spk_1: finally we have proven beyond argument you're breaking leverage about the novel a cool underlined business generating strong and improving free cash flow and we expect meaningful inflection group cash like starting an h two of twenty twenty three given our revenue growth and predominantly fixed cost base we expect nearly triple a grown a big dog from sixteen million dollars and twenty twenty two to forty one million dollars and twenty twenty three and generate positive free cash flow in the second half of the year
spk_2: more importantly we expect deliver these results with partnerships an asset that we have today in other words we are comfortable cheating or twenty twenty treat for without the need for any new right skills the opening of any geographical markets emanate or any other exception factor and therefore with one hundred and fifty nine billion dollars of cash in on balance sheet as the year and no debt financing and the move to positive cash flow date to genius it extremely well positioned twenty twenty three month it keep turning point in the years ahead we expect to continue along a path towards our long term objective or group adjusted ebitda margin in excess of thirty percent given the strong and improving margins in a pool underlying business we feel confident in reiterating our long term objectives what gives me confidence is our second to none tradition at the heart of the ecosystem which is only strengthens going public we are the technology partners choice the league's bookmakers sponsors brand and cool casters will pioneered official data rights detroit technology that makes it a sticky law
spk_1: seven partner to leagues provided mission critical data and services to bookmakers develop the most effective sports focussed digital advertising technology and infantry and implemented second spectrum ai and computer vision technology to deliver the next generation sports broadcasts
spk_2: in essence genius is trusted technology partner for anyone seeking to engage and monetize sports audience in a personalized and cost effective way of the authentic tyler will provide more detail on financials and guidance later on but first i'll walk you through that headlines
spk_4: to recap
spk_5: key for
spk_1: i'm starting at the top of the page
spk_2: we delivered a hundred and five million dollars in group revenue and three million dollars in adjusted group either does this represents thirty six percent constant currency growth in revenue and a fifteen million dollar improvement in adjusted ebitda compared to queue for twenty twenty one again this brings up phobia revenue and adjusted even daughter three hundred and forty one million and sixty million dollars respectively exceeding or guidance for the year
spk_1: it represents forty one said constant currency revenue growth and a significant up lived in adjusted ebitda from the two million dollars reported in the full year of twenty twenty one
spk_2: the our performance in twenty two twenty two with multifaceted first we won new business throughout the year with a total of seventy one customers in twenty two tape
spk_1: second among existing customers we continue to expand our value at services having successfully completed contract needles and renegotiations with large global schools books and bird in the us specifically we've seen an increase in total sports betting volume improvement in a price of with margins
spk_2: and strong growth of play betting each of these factors resulted in us rep revenue more than doubling in twenty twenty two additionally or league relationships to strengthen throughout the year as a integrations were food it's latest last quarter moon the shortly looking ahead are execution and twenty twenty two and strong tailwind entering a new yeah give his confidence in our guidance or three hundred ninety one million dollars in revenue and forty one million dollars in adjusted ebitda and twenty twenty three
spk_1: twenty five six the presentation i'd like to point you to the table on the right hand side sharing on net revenue retention which is an important metric that measures growth among our customers
spk_2: you'll see that we have continued to execute on our land and expand strategy across okay to law school spending customers
spk_1: evidence that a gradual increase in net revenue attention over the last few years
spk_2: we've done this by successfully my taken grow through the contract with videos and renegotiations alongside additional products and services all while keeping our custom like churn consistently near zero any chance to experience is typically a byproduct of low refugee customer dropping out of sports betting altogether now it's important to keep in mind his sixty eight cents about retinue still generated from customers outside the us a more mature get mature markets like your and the uk therefore on net revenue retention over the last few years is heavily weighted towards these customers although sports betting monetary need regions the concept official like data which we planted it's still very new and therefore still relatively undervalued given it's important to bookmakers therefore continued growth in our net revenue retention will be driven by steady pace of contract wheels and contract negotiations this will also be supported by cross selling content and other services as well as customer expansion into new geography such as brazil young sons
spk_1: this is an exciting new region now introducing legislation to legalize sports betting genius is extremely well positioned peculiarly as we have just launched an association we didn't mistreating does to preserve the integrity of beginning sport turning to slide set them off day on the topic of sports betting that shift focus to the us more specifically
spk_2: in the fourth quarter which catches three full month sabbatical betting we've seen many encouraging developments relative to last year test we continue to see a rapid expansion in did us sports betting market as a whole in cute for online sports betting handling increased approximately forty percent year on year this is a function of successful new state launches in twenty twenty two like new york maryland and louisiana in addition to grow the mormon church dates looking to twenty twenty three weeks back great to continue with new exciting state launches in at a higher and massachusetts other reminder already revenue contracts with us sports books mean every new state launch result in immediate revenue up next a genius with little additional cost growth in i will by somebody who continue to draw the profitability from years to come we've also seen an improvement in nfl backing and play our imply handle also to turn the volume of bats increased by nearly fifty percent year on year the combination of concrete handle and better when margins translated to imply jgr growth on a the sixty percent year on year
spk_1: we also saw fl pre not handling when margins improve year on year resulting in nearly seventy percent growth in pre match yeah
spk_2: as you may be aware bought the operators currently earning strong wind margins on pretty much better products that parlay and same gang parlays were often ask what this means for our business and to declare genius absolutely benefits from this positive tend to take one point five to two percent on nfl pre match gaming revenue
spk_1: as we have seen the nfl season we expect the popularity of implied bashing in the us to grind for years to come much like it has a mature markets
spk_2: fifty percent growth this year is a fantastic stop and we think is great year year remain a long lasting tell when for business in the meantime genius benefits from growth in all areas in the market including pretty much parlayed and same game pilate which have driven written successful operators the matter the product eight that types rely on our official data her we opposition to share in the upside is what prices continue winning in this area he could be great driver to translate to one hundred ninety percent revenue growth in the us and twenty two and two which will now enable us to reach profitability the market in twenty twenty four at the percent july one revenue us proportionally becoming more significant now represent you nearly one third of read news and twenty two inch t am i like to liking up top twenty five you a sport for customers we cute net revenue attention of changed and seventy one percent in twenty twenty two demonstrating massive growth from allergies customers
spk_1: the last piece or touch on the full chinese nick settle execution of our long term strategy to become the digital sport technology partner choice not only funding and sports books but also to broadcast as balances and brands
spk_2: our fundamental goal it to develop technology to help lead the track and engage the next generation of fans you want to confuse board it entirely new and personalize ways this is why leads want to work with genius not because we write the largest check the data rights that because we bring you technology powered by computer vision or nail i the unlocks the new fan experience that have never existed before and bring real value departments across the entire digital schools ecosystem this won't happen overnight but in twenty twenty two we began little couldn't be demonstrate how he turn vision into reality good continued winning business with backing cost will cost is such a cbs amazon prime video here said nickelodeon and he has yet just to name a few developing and innovating across second screen experiences mood of medication and much more every time you see our technology on screen you should understand this is proof that we are providing value to our lead partnerships beyond right sees dignitas can be strengthening deepening our relationship the result of successful execution here and why we continue to invest in this area is because it's open up an excel
spk_1: right opposition in massive new towns outside of online sports betting in bulk of technology and sponsorship harnessing the unique position that we have today to deliver innovative and person and life experiences
spk_2: i'll come back to this point in my closing remarks but the now of hand the call to make a couple of financials
spk_6: tags knock
spk_2: as you've already heard twenty twenty two would veto consistent execution
spk_7: looking ahead
spk_8: come to the twenty twenty three to be yield inflection what we expect to rampart eat dog world a free cash flow generation
spk_9: the first
spk_2: that's quickly disgusting results of a strong execution and twenty twenty two
spk_8: we finished the year with three hundred and forty one million dollars in revenue
spk_2: and sixteen billion dollars a group or just a deep it down exceeding now titan of three hundred and forty million dollars and fifteen million dollars respectively
spk_8: this is despite the presentation currency headwinds we communicated in each course this year
spk_10: as a reminder
spk_2: we literally center of guidance in january twenty twenty two assuming a gpp us dollar exchange rate of one point three five if exchange rate has fluctuated to out yeah i'm hoping to one point one five one point too much of the fourth quarter battle we have provided a or constant trump feel about growth remove his presentational trump people are to the t and for the final time we've also geffen tough financial about using the exchange rate at the time of setting out guidance
spk_6: the given apples to apples comparison of our performance
spk_8: as you see on slight can
spk_2: our revenue and adjusted ebitda would have outperformed out guidance i needed great the margin close to twenty million dollars and five million dollars that performance if not for the attacks headwind which is entirely presentational in nature on the right side is like ten
spk_8: you'll see the breakdown of cute for group revenue
spk_2: which grew thirty six to set and come from can't see you on here to one hundred and five million dollars as would try courses and twenty twenty two hopefully products performed in line all ahead of expectations
spk_11: first
spk_2: betting revenue grew to sixty five million dollars
spk_8: representing thirty five to ten come from county growth this is driven by new customer when
spk_2: contact with needles and with negotiations an expanded offering of are you at services and products
spk_8: i'll need to let you continue to strong pace
spk_2: great fifty eight percent come from county to twenty six million dollars in the quarter this was driven by new customers and highest standard north america primarily to programatic advertising services bought weapon you also increased nearly fourteen percent you know year to fourteen million dollars
spk_12: mostly driven by second spectrum
spk_8: given all relatively strict cost base which does not need to cloud nearly in line with news this resulted in group adjusted a bit dark three million dollars in the causal mocking it could mean if the content placement and for twenty twenty one up fifteen million dollars a year on the
spk_13: yeah
spk_2: moving on to florida latin
spk_8: we want to highlight the consistent track record we've established throughout the year
spk_2: a mob mentioned with the start we issued highly detailed financial full costs on january twenty two with that today including courtly go red meat and adjusted ebitda targets and quarterly revenue targets to each of our product groups there's some to twenty five individual financial targets for us to measure our performances yeah
spk_8: now as we reflect on twenty twenty two we're delighted to say that which it will exceed it
spk_2: twenty five of those targets
spk_8: in addition to our performed by products group i also wanted to quickly touch not performance by geography
spk_2: to provide a helpful to you have to the dynamic for the underlying position as malt lunches at the start operating outside the us is already highly profitable and cash generated today
spk_14: with margins in the high thirty percent range and they'll continue to expand
spk_2: in the us our losses have narrowed from about twenty million dollars and twenty twenty one to approximately ten million dollars and twenty twenty two as we continue the march towards profitability and twenty twenty four
spk_15: we have made significant investment in the us is the last two years to that position ourselves to capture the growth to enlist market
spk_2: i've good point in time much of that heavy investment is now behind us
spk_8: meaning like in our cool business our operating expenses
spk_2: do not need to grow million in line with revenue going forward this brings me to fly twelve
spk_8: where we provide more details on our twenty twenty three revenue and he the dog guidance
spk_2: when we officially issue twenty twenty two a garden some fourteen months ago
spk_8: the sterling us dollar exchange ratio was one point three five
spk_2: now as we sit here today march twenty twenty three
spk_7: get exchange rate it now one point two
spk_2: the we are just doing already your outlook accordingly
spk_16: given that our numbers are reported in us dollars i got chosen presentational currency
spk_8: to be clear our view of the underlying goodness have not changed from the time we've actually gave twenty twenty three revenue guidance last year and we're simply adjusting our outlook reflect the difference in exchange rates
spk_17: we are now expecting to generate three hundred and ninety one million dollars in revenue in twenty twenty three in line with current consensus
spk_2: it is worth flocking
spk_8: but many of our expensive a little for page and complete other than the us dollar
spk_2: and therefore most the profitability naturally hatched and are twenty twenty two a group adjusted ebitda outlook it impacted by like a degree
spk_18: we expect to generate forty one million dollars in group adjusted ebitda in twenty twenty three also in line with current consensus
spk_8: additionally
spk_2: you will find another detailed breakdown about to revenue and adjusted the the gulf war costs by quarter as well of course the full cost of a new byproduct group just like how we guy to to and twenty twenty two we're pleased with the fact that we delivered on that detail guidance and twenty twenty two and feel confident in our ability to do so again this year i mentioned at the start the twenty twenty two with deal of execution and the twenty twenty three if the of profitability inflection
spk_8: you can see the weeks back to grow our group adjusted ebitda on by over have some wouldn't fifty percent
spk_2: leaving the expected fifty million dollars or incremental revenue and twenty twenty three
spk_8: contributes to group adjusted ebitda at least fifty percent margin
spk_2: this is proof of the operation leverage in the business which enables us to drive revenue growth on a relatively fixed costs days that should not increase at nearly the same pace
spk_8: like thirteen illustrates this point
spk_19: here you will see a detailed breakdown of are expected cash operating expenses and twenty twenty three again much like we provided in twenty twenty two are invested day
spk_2: to be clear
spk_12: i'll prospect it's highly predictable and we don't expect it to accurately increase in order to achieve by retinue of adjusted ebitda expectations for the year
spk_8: for example take rights costs which one hundred and twenty nine million dollars and twenty twenty two and the only going to one hundred and forty eight million dollars this year approximately fifteen percent
spk_2: additionally are other operating expenses thousand marketing already de una with ninety six million dollars and twenty twenty two and will remain that number in twenty twenty three
spk_8: we're also beginning to choose our noncash expenses as well including stock based compensation
spk_2: to was granted i not december twenty twenty two we expect this will be approximately twenty five million dollars and twenty twenty three
spk_8: down from ninety million dollars in twenty twenty two and should remain at approximately that level on the nominal basis
spk_2: and decrease at the center to revenue as much as we're focused on revenue growth cost control unprofitability what equally focused on kessler generation
spk_8: we finished twenty twenty two with a hundred and fifty nine million dollars in total cash
spk_2: a pop out guided range of one hundred and forty two hundred and fifty billion dollars
spk_15: and we expected to generate generated possibly cash flow in the second half twenty twenty three it continued growth thereafter
spk_2: our customers phone calls include cups light internally develop software costs which was forty one billion dollars and twenty twenty two
spk_8: much of this investment with allocated to the development of second spectrum products
spk_2: which has given us a competitive technology advantage and unlocks future militarization opportunities which will hear about shortly
spk_8: and twenty twenty three weeks expect the cash outflow will be in line with twenty twenty two before it starts reducing in twenty four twenty five we expect el low point in twenty twenty three to come from tommy two three
spk_2: before setting positive for the remainder year and you one twenty twenty three specifically they expect our and cash balance to be approximately one hundred and thirty million dollars on current exchange rates
spk_20: principally due to seasonal working capital outflow on an annual que one cash payments relate to a cfl investment lot of late
spk_8: as much with housekeeping you may have noticed that we recently exchanged all of our outstanding public warrants for ordinary shares a common stock the purpose of this transaction was to simplify a capital structure
spk_2: eliminate a future diluted overhang for common shareholders and remove certain legal tracks the considerations and costs associated with as weren't as an adult
spk_21: company should have greater financial flexibility and investors can be certain about capital structure going forward
spk_2: other way you can find an updated check out build in the appendix of are ruining presentation which will illustrate the reduction enough literally to check camp and on that note i will now attend the pulled back to mark the closing remarks thank you dick people are being the line to queue and i i'd like to leave you with the final build something that excites me most about our business in the past few months we've all been blown away by the capability demonstrated by a i powered technologies like chat gp take it that he wouldn't didn't realize it before they now understand the ai and machine learning hussein seem change every aspect of human life
spk_8: give me a second spectrum technology is the sports equivalent of gp t our technology enables machines to autonomously understand sports at eleven far beyond even the best pundit or commentator that can expect from the unique understanding is built on over decade
spk_22: eight and computer vision and machine learning development
spk_2: leveraging the corpus the train data unparalleled by any other technology we now have a unique advantage and opportunity to apply the capability and revolutionize sports at every level in our vision of the not so distant future to regenerative ai every person on better player coach will be able to watch the game it a fully personalize way pilot to the exact needs and preferences i'll give you one more example of how are already doing today
spk_23: up until last year old one hundred and ten million people watch the superbowl watch the exact same broadcast this year last month if you're a date gate or fantasy player you could watch an alternate that cost automatically produced by second spectrum hey look you
spk_2: the trend
spk_22: our technology that automatically produce these kinds of person i will costs three the nfl regular season and playoffs the m b a game
spk_2: and a pl games personalizing experience the data had better analysts casual fan and even kids all to massively up another example we announced yesterday we had expanded our technology partnership with the i'd be i like helping the n b a it's focus on bringing their getting for what like finding solutions to that challenge that the future jeannie sports and second spectrum have the technology to address the challenges we're implementing a in tech enabled solutions to help the and be a better engage it's next generation of fans by creating richer and more personalized experiences don't have the opportunity to see this first hand on and be elite past where would be augmenting like will call with next jen data and inside all in real time additionally un i had partnered with us on dragon
spk_22: this is our new technology and a next generation platform that will track mesh data which synthesizing billion of own encore data points the system represents new paradigm the sport technology that the quantum leap from where we are today and further extending the head start that we
spk_2: have in the market these a good to of the many examples of how our technology has critical applications in helping lead better engage their audiences and this is just the beginning just to chat gpp can interact with you and give you are tailored specifically for you we will soon be able to provide person like sports experiences halo specifically for you this is the end of the one size fits all and the beginning of personalisation for all kenya is uniquely positioned to leverage the moment and create value across a wide range of products that would benefit broadcasters sponsors brand bookmakers and ultimately fans paul ai has only just taken center stage captain spectrum had developed his strategy and technology for over a decade while we have been partially confidential and competitively did during that time we are pleased to begin to unveil the more complete version and potential that we have invested in and executed on recently in fact we plan to upload a video demonstration to be wide range of products on our investor relations website early next week we believe this will showcase how we are already bringing these concepts to life sports betting is a major gripe driver of our business but so too is revolutionizing sports industry and fan experience true ai there is a lot more to come on we're excited to share it with you in the months and years ahead
spk_0: on that note i'd like to thank our adapted for that support as we continue to build our leadership position in the digital sports technology market and with that we will now it the line you and i
spk_24: at this time i would like to remind everyone in order to ask a question press star then the number one on your telephone keypad we ask for you please limit yourself to one question and one follow up your first question comes to line up ryan signal from craig allen capital group your line is open today mark mac a congressional a business progress and and updates or to start with guidance arms a curious make it you can give kind of more the underlying assumptions ah one why not provide arrange to wipe a consensus as your point estimate three i guess fx is a little higher than when you last reported so curious som
spk_25: guess at the business help performing why your reaffirming the underlying assumptions from a year ago
spk_26: hey ron
spk_2: what what like
spk_27: i guess the first thing is the underlying assumptions doesn't change said that is still the same assumption that we set out in boston a fourteen months go now run wasn't it say as he said the prepared remarks i went along business hasn't changed and if the us dollar exchange rate was at one point three five to sterling today would still be got to the for thirty four forty range
spk_2: i'm beginning to percentage movement
spk_28: i think we use one point two which is on dead on either today or up to twenty twenty three
spk_12: it's not an exact science right run you and we have revenues in berlin and euros and dollars and lots of other currencies what we always with a company that one point two
spk_2: that we will hit the metrics that we set out in into not getting a range we didn't give a range love to have a precise and are forecasting he again seven couple months we're pleased to hear all twenty five the
spk_28: the metrics that we set out and i'm very confident at one point to that will hit the twenty five
spk_24: wound that we set up to twenty twenty it
spk_8: it's been me just the have followed make it it feels like the businesses in a bigger better outperforming place than it was fourteen months ago so i guess why reiterate the same underlying assumptions when the business they'll perform each the last four quarters
spk_28: a lot on what lot eat would we're very pleased to our twenty twenty two performance with a place to hit next seat
spk_12: and we will be looking to to hit or exceed our twenty five that we set up to twenty twenty three and same basis
spk_29: both at and revenue and leave it up for just remember all that money but doll just to be the doll position
spk_8: ils it's far less
spk_24: ah solace issue in relations foreign exchange and and gotta to forty one which is that she still within the realize that we gave actually in a in fourteen months ago and as a said legit repeat myself with we're confident that we will i'm hit and exceed it or exceed those twenty five matches that we set up twenty twenty three fair enough i want all up for me or propellers which on second spectrum looking forward to hearing more their congrats on the and be a contract but my question is how do you think what the opportunity to provide similar services for leads that your partner with are ready for official data rates it seems fairly logical to me vs
spk_2: is going after leagues read don't have those rates and did that provide any barrier to entry
spk_12: yeah it's hard markets is the guy question i mean that the the second spectrum and technology stack and you know is is it once once you failed it's the aired on a personal basis he abilities roster and either effectively democratized that true throughout all of the other leagues that we have been enormous size
spk_2: the relationship with the and b age is just one of the mean and many relationships wage that to have an with in basketball i'm on a global basis i'm into to remind you we did in a this that roughly sixty thousand feet above the border bands were in basketball in college level over the us and under technology statue bill and our ability to rolled out globally as is is something that same material and a couple of things that come up with that it's pretty interesting firstly than the ability for us to i'm flat data in as for the more efficient manner also our ability to fly much richer data application and of the machines and computers can get understand the game far better than a human can killing plat much which data it gives us a much much much high barrier to entry on that dated topic and replicated it can't be you know
spk_12: accessed by anyone else our data or the lead data on and and the to the final point which i think is a is really interesting is it because it is it begins the binary shit in the type of data that's required by bookmakers that's required by lead broadcasted i'm on that flight data
spk_2: on either again can only be accessed and and collect and collected through the technology and the second batch is pretty much the any technology stack that had the ability to do this on all mesh technology that we're rolling out which we're going to be expanding more on in an investor day next week we'll we'll give you a much greater clarity of that but ultimately that for the that the punch line is that will have been except data it can only be collected by our it will reduce the operating talked in the bit that it will expand the opportunity to select two leagues federation back to the sport and it will give us an enormous
spk_24: barrier to entry and it's huge note
spk_0: thanks mark make good luck guys and looking for the next week your next question comes to the line object kelly from oppenheimer your line is open
spk_22: hey guys are great think that for take my question at goodyear ah i'm just a couple just one on on the guidance for this year okay looking at the media deathbed it kind of imply a decent deceleration and one kill you know maybe single digit growth and qq then rate fell rating and in the second half
spk_0: the uk and it talk about what's going on there that being driven more by i'm a sports book for back bob somebody economic pressures we're seeing a digital advertising on and that marked can you just give us an update on where we are in terms of some of the bigger ah college copper
spk_30: ill at big ten ft the are the ones that come to my part where we are on a data rights for them for the big ten at the the of the other large college got bridges facts
spk_31: to can inherit jet
spk_32: yeah the me
spk_33: yeah sorry yeah i get the just employed just on your media question i just a new media question and like like lucky said last quarter were expecting a media read needs to be more and more closely aligned with i will pass that's really down to and last year and h one media spend being and usually and usually i really were saying it come back down due to our expectations in him
spk_34: the media perform and it were really happy with how it's going and we got a number of new customer when the cost of last year and when you look at the broader add that market and you know we're starting on the non battling side of things were starting from a very low base and and were saying good success than terms of growth so we're feeling by
spk_1: positive about it
spk_2: an an and get it mark and to pick up and you're on your and conference and question get there's a lot going on moment i'm in india in the conference nice i'm i think the first thing just before i it hit the conference points it is that for us to and gonna hit at see the numbers the showed me that need to win i'm any new deal cited and that there's no requirement for us to and a tech cat bring any new rochdale then and if we day we'll be bringing the mean only if they're profitable and they make sense for us so we're in an incredible place and we have a fantastic operational leverage that that that that that's coming true in the business but intend to the specifics of the conferences and let you know did there's obviously a lot going on and in a big picture making moves for some changes barrett as you know a commissioner level the as he said are also and sort of progressing i think from our point of view were very much focused on on a deal with they make sense for us as as and sure everybody else is but more importantly were incredibly well place with march madness you know we've got the relationship with a and cia not mounted coming out very soon and that you know provides an enormous an opportune energy for an hour us to deployed by technology and as well as an object generate revenues from the data air and and and our relationships with a league that works but direct direct relationship to the bookmakers of the others in a very strong position as a were feeling pretty good about all opposition in college on the other sit a point as well as the technology roll out that we've made over the last and year in you know that year eighteen months in college is this really mean a pretty complete now so we're in the majority of schools we have our technology and most in most of the areas that a day to act like thing is second to none and again going back to the point i made you know to rhine and law school the
spk_0: that that the the technology deployment the we're going to be able to do you know true second spectrum through basketball and the other sports is coming out of that is gonna leave it in a very very strong and college position
spk_30: thank you
spk_12: your next question the line of my kitty from benchmark your line is often
spk_35: they mark neutral spine and grew on the corner than them nice to see them to gloat yeah to questions from me and the first one is looking at you twenty three guide are obviously than
spk_36: huge operating mother june he spoke to that i think he noted into on
spk_12: revenues contributed to of just knew the done more than you do this or another more color about the nature of your expansion and how you can cash in switzerland against over the medium term need to start thinking about the sustainability of hogan sort of alameda numbers that we see yeah hey mike
spk_6: i am lucky i might meet you and and and i have heard me talk for number of years about the nature of our cost days and then it doesn't it's go along with let me and what we're saying is that twenty table is that inflection point and and you like might you can see that in our guidance
spk_8: on now expecting incremental that need to talk to and ran about putting them as that teach them the thick snake because they have you look at individual lives on that cost base in the operating cost the yet on indeed thousand marketing g and i actually the collective who were forecasting it's that that to be flat year on year
spk_12: and that subsumed all any sort of inflation the aspects with within those number than a flat basis
spk_35: the
spk_30: the it in terms of time for with the dynamics of a driving that aren't gonna change though the dynamics weeks but no to continue through twenty twenty two a into twenty twenty four and indeed beyond my i'm with revenues growing at a at a heightened right above the cafe
spk_1: ice age and pm the same question for me on a tech innovation i wish we were going to see a lot of that next week pretty incredible you guys are doing out with a second spectrum and looks like you have a lot of product innovation that we seen and still coming and other see that highlighted by your and be a deal
spk_2: here's if you can sort of provide don't even more recent granular examples perhaps of have pack
spk_1: sort of driving a player engagement we can to month nations from of your your operator partnerships and or have tattoos
spk_35: being effective and terms of driving retention and maybe maybe better rights fees for you in the future with your partners and then also curious how you think about
spk_2: i mean you that you've got a great bouncy done great deal with the second second spectrum modestly is there and the big piece of the good road here
spk_22: how do you think about
spk_1: the necessity or we're investing in attack and if you think there's incremental in the ne opportunity they can cancel could you expand your text that on where your products that european your partner's thanks guys
spk_22: well thanks i'm an adult old aladdin matt i'm but look it it in essence some i've said you know that for for years now that and the investment in attack back is going to stop at to deliver improvements in our ability to do rochdale an impact the valley of the right skills we do in our ability to renew rochdale and that is something that we are seeing a very clearly coming through the bit that been in in in the deals that we've done but also you know for example in our relationship with the nfl and you'll have seen this year we rolled out on our partnership with amazon in our partnership with aditya than i am and on you know it when cbs the woot were in a very very strong position ah at the results of the investments that we've made in our tag on the baton we make our optional grab you know we we we choose the level that we want to invest on we no at the moment we we feel very comfortable with on the amount of money that with spending on this in the level of investment we can see that on needing to increase in in any way you know a it's laugh at the moment and if anything we made and when we met we may even them to that assessed that in the opposite direction as time goes on because fundamentally we have an awful lot of what we need and
spk_1: frankly we have a massive technology head start on and an hour job is ready to make sure that that that we getting the balance of that had star on that investment right so that's our focus their intended am and i look as i said we've got everything that we need
spk_0: you know i am a huge never say never and wish you the with the assessing the market and and engine you know understanding what's available on if things night you know screaming that sense and then than yeah well you know well honestly do it that an environment with very very happy with the position weeping be done
spk_37: in our an action in or positioning it and actions rather than beslan and so that the moment and been away with with feeling in a really good place
spk_22: bunk like us
spk_37: your next question comes from a lineup jason bazinet from city your line is open i good morning i just had a question on
spk_35: us a bit dull losses and sort of the shape at curves as you glide towards profitability and twenty four i think about a year ago you were you're talking about us he did our losses widening
spk_38: ah in twenty two relative to twenty one and the i think maybe i misheard you it sounds like actually narrowed
spk_39: to about ten million dollars of losses so i was just as just wondered did you expect more investments in the us that sort of
spk_2: cause a little bit or retrenchment and twenty three before you get to profits and twenty four or or i'm is they're just a bit of conservatism baked in baked into your guidance
spk_28: have you know me i hate a when you for you get the gist of the question epic
spk_40: great time station at it i get the political ties with the yeah we we don't operate the business and such segments of that funny would we don't give a detailed sort of se si se si start with you
spk_22: having said that eat you heard right you know boot terms
spk_41: you we look at the us we've seen a narrowing of a bit ah that was a little anticipation when you look it up global us position
spk_42: we it was running around about a
spk_1: i think about twenty million dollar last last year and a round about ten million dollars in twenty twenty tail we all expect that to our little bit and twenty three and then of that said i think of the prepared lot expect and profitability to hit
spk_0: in twenty twenty four
spk_43: okay thank you yeah to the what done reopened reiterating on a grid level that you know h to a twenty bill oddie issued gonna see positive cash as well so just just just to reiterate that
spk_34: is your next question comes from a line up and chicken from credit suisse your line is open hey i'll go in the morning of i wanted to get on your out follow through guidance of fifty percent for twenty three vs twenty two and we just step back don't think longer time the right
spk_43: fifty percent the like well group and it's already you expect to be higher or lower than that building code years gonna where i'm coming from a to get them incremental state watch this year
spk_28: the present more you get them operating under john special and you're right calf and then fx which eventually impact even outlet been around like been rubbing it so that provided a little pale and there i'm not sure this and get a putting take that call thought with calling out but when it began to some of the living parts and then get up yeah
spk_12: that's an advocate get about for the record books
spk_2: yeah hey the any then america for twenty twenty three years we couldn't quite lot of detail city on the costs based on the line but basis they even kansas city then we got it will focus to have needs to be up
spk_40: forty nine million dollars
spk_2: you and your you go i think a to that is an increase in media says you know than that took to food and roundabouts for the three to four million dollars and yet the the the bedding which forty one talk to the other a much higher rate than be hilarious as you say pilati close to hundred percent when you look at them the cost base of on right to nineteen million dollars you and yeah and then the to because they'd be operating costs are actually flat your year and that's how how you get you twenty five million jobs who want to forty forty nine fifty million it a bit dull i'm totally the on the revenue basis alone would not good
spk_22: going to twenty twenty four specific however than we expected dynamics at play and twenty three to continue to exist to twenty three four now you've got that strong revenue growth and twenty twenty three i you when you look at on the cops and come to basis that sort of a high team revenue growth it's one about seventeen eighteen percent are you said to stop said pitched said those two dynamics were expected to continue a broadly those levels to twenty twenty four when you look at your numbers and i'm cindy when you get beyond twenty twenty four they should be talking to the the kind of level and a also is probably worth adding to take it out says that of and macro level and you know you imagine you states and coming on board as a new state comes on board
spk_2: that that stuff that's it you know a that that doesn't cost as anything else we just switch on a nice day
spk_44: the united the the the appliance
spk_2: you know a good idea new revenue that may make call them in terms of marketing which obviously comes through to off which is beneficial but but the actual drop through from new states for us is is mary is near hundred percent say i'm it is a very it's very very good thing when you states i do come on board for an hour
spk_12: the banks just with that would reiterate exactly when you get out beyond twenty twenty three you it's of you've got other global areas like brazil i know it's is a hot topic currently mentioned again and know it it in our
spk_34: prepared remarks
spk_8: it doesn't really impact twenty sleepy play but when you go on twenty four again you got dropped to thirty says we don't haven't really much incremental costs will not given if you think what we do now business is that in fix nature the cosby
spk_33: right i guess about getting out because the glee effect is a telling for you on photo so really you doing less than fifty percent if we know normalize for attacks on to try to figure out if this a good level moving forward we should expect less than fifty percent in out you you're gonna are really can no expecting to to percent regarded of of of of of attacks and who look at the numbers that go to that you own at one point two i know she will put you put the cost i so so eleven that that one point three one point one or other we still expecting a sent flow through that are on that basis
spk_45: okay
spk_46: and then he met you're prepared remarks and other the ministry of called out couldn't win rates that had you and better get in your twenty three out
spk_22: at the investigated the maybe add more context at industry day you guys provided in context of your multiyear out for nfl in game
spk_30: game when rates sort of scary it had a change in law
spk_35: yeah i haven't yet so contacts you get your heart and soul subject they've to commercial business so a recent quite get to look at it up your your the the assumptions that you look at a really interesting she would be interesting to be done but when but we have seen could making a and that's been good but we started to look for math
spk_43: either were me where we look at this club that the to the underlying assumption that we set out to be a will be better diet a pretty consistent with what we see the thing with starting to see
spk_0: that we we thought to focus on the a a less the percentage of in player is pre match gg arm and hand belies the report metric the more conduct in absolute terms what's going on so and when you think it's pre match vs in play gg on indiana found
spk_22: it's likely school bit worried by the because the massive success hussein guys parlayed emissions one bucket brigade product at the moment and the margins maccabees que they are the the the gdr show in econ one way so what we thought look at much more the the absolute terms of what we see in terms of actually revenues would imply
spk_30: a that the gone up to let from a complete your article about sixty percent you live for me that for the from the quarter and that's clearly outstripping the market and so we have seen don't have the trend we start to look at and the twins are heading the direction that we did it for the been to be successfully to set up okay to just be trying to win rate improvement in the industry have you guys have of you a better that a vote out
spk_47: ah yeah
spk_2: thanks
spk_46: your next question comes from a line bernie mac turn him from need to my company your lung is open
spk_2: thank you you're taking questions and neighbors follow to that seems like harley certainly a focus for sports concert now it just like your how they impact a greek i can get at one point you doing shady pines for drafting so how do you think both apparently pay great burst than you know why an attitude percent for pre match ban
spk_28: thing
spk_22: i like a on a on a sorry jack again or on a on a more general level as and gunpowder like would use ball into a
spk_2: a pre match practice but it might be can get holiday gifts for the moment who just pretty much better off a great on that you should get an anomalous and what we take on a on a on a greek i'm on a pre getting back at when the body product or was he looking differently and an as we do that with many customers across the world and and and to be gone in the us you know recruiting drafting and
spk_32: it didn't die
spk_0: what i think we'll see the bit evolution of that stuff in terms of operated outsourcing it into or saying and i'm a ship to in game and i'd call and she could those take rates which from people take from up from our point of view i'm here are our position on the stuff usually in a pretty consistent we will always be part about in a way because of
spk_48: right date at the powder products with your whether they're doing a mouse around outside and definition and your said that during and after like this has you think like a conversion that he began to skip the cash such as you guys came to catch a possible second half the beer
spk_8: yeah yeah i'm on a beach it is called out so the second half years going to be tough love we are forecasting it to become so positive
spk_22: a couple of things in the in the open half of the year we got a bit of working capital just was against us we will make payment to to to cfl to stop the own terms of increasing our investment that you've have seen happen and twenty twenty two as well i'm somehow feel that he with quote in revenues me the done the second half year eel see that
spk_49: it's a free cash flow start generating an h two and then obviously beyond a cassette positive and twenty twenty four of a year and and on some simple
spk_13: got think guys
spk_50: and your next question comes from a line of robin farley from qbs your line is open
spk_48: i'm great thanks you've talked about the math technology with second factor than
spk_8: in the new contracts the about how much that is contributing to the growth year over year on your sports technology running eggs
spk_48: hey look i'm robin to say i hadn't eaten as you know the mph yeah it's a longstanding part of the of a deal announced yesterday a an extension of that amount of seem to do not or twenty twenty three full cost else that said moment of course he had a deal so much more than just too twenty three and has really been auckland story and twenty twenty four beyond we talk about as will full of all the base camp position i'm and really opens up opportunities way beyond the normal sports betting data revenue opportunities in the t twenty four beyond that that's really why we're very excited about it deeply commit something
spk_51: the and be i
spk_28: she just the twenty three guidance from work for trilogy revenue include
spk_2: and the other contract
spk_0: with second vacuum that you haven't announced yet

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