Genius Sports Limited

Thank you for standing by. My name is Pam, and I will be your conference operator today. At this time, I would like to welcome everyone to the GMU Sports first quarter 2024 earnings results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the conference over to the company. You may begin.

Thank you, and good morning. 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 annual report on Form 20F filed with the SEC on March 15, 2024. 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.

Hello, good morning, and thank you for joining us today as we begin another year on a positive note with strong momentum across the business. Before we dive into the results, we'd like to begin by thanking our partners at Apex for their support and investment over the last six years. You may have seen last month that Apex reduced their holdings in Genius to a level where they now have stepped down from our board of directors. The board representatives from Apex have provided valuable insight and expertise as we went through a period of transformative growth, expanding from $88 million of revenue in 2018 to half a billion dollars forecasted in 2024. We have spent the last three years as a public company working very hard to cultivate a great group of public equity investors who we are proud to call shareholders in Genius Sports. And we look forward to working with them and many others over the years ahead. And with that, we are very happy to report our ninth consecutive quarter of outperformance relative to our guidance, once again demonstrating our consistent and predictable business model and strong execution. In the first quarter, we grew revenue by 23% year on year to $120 million, beating our guidance of $117 million. Our group adjusted EBITDA was $7 million in the quarter, also exceeding our guidance of $6 million. We remain focused on consistently outperforming financial targets. whilst delivering on our core strategic objective of becoming the must have digital partner for leagues, sports content distributors, sports books and brands. The first quarter was an excellent example to highlight each of these areas as we continue our wide scale distribution of technology and value enhancing products across the sports ecosystem. This is exactly how we have retained key league partnerships over the years. and positioned our commercial model for sustainable growth in profitability and cash flow. Our strong start to the year makes us even more confident in our outlook. So we're raising our 2024 group revenue and adjusted EBITDA guidance to $500 million and $82 million respectively, up from $480 million and $75 million to begin the year. This implies year on year group revenue and adjusted EBITDA growth of 21% and 54% respectively, and raises our group adjusted EBITDA margin to 16.4%, representing 350 basis points of improvement. We are also reaffirming our cash flow positivity for the full year, which will continue to strengthen into 2025. As we reach this important annualised milestone, we may be more proactive in deploying capital across a range of potential initiatives such as M&A, share repurchase or otherwise. Therefore, we want to position ourselves for any opportunity that may arise in the future as we continue to mature as a public company. As such, we are carrying out a few steps to optimize our overall financial flexibility with relatively low cost capital. Firstly, we have closed a $90 million revolving credit agreement with Citibank and Deutsche Bank, which combined with our cash on balance sheet gives us greater flexibility to access additional capital if ever necessary. Second, as a matter of general corporate housekeeping, Genius Sports is now Wixie eligible following our three year anniversary listing. Therefore, in accordance with customary market practice, we intend to file an F3 shelf registration statement this week. Our intention with this filing is simply to follow ordinary best practice in the SEC housekeeping now that Genius is Wixie shelf eligible. We are taking these steps towards greater financial flexibility because we want to be nimble when the potential opportunities arise in the near to medium term, particularly as our business fundamentals continue to improve and we gain further clarity on our long-term growth and profitability prospects. Our confidence in the underlying business fundamentals is reinforced, not just by our financial results, but from the successful execution of our core strategic objectives. For example, We continue to reach wide scale distribution of our computer vision and AI technology with leagues and federations around the globe. The broader our reach, the more we establish genius sports technology as the standard for next gen data collection. The foundation with leagues across the globe is strong and continuing to expand, and we've successfully launched several new betting and media products on that basis. Most notably, in the last few months, we struck long-term technology partnerships with the likes of FIBA, Lithuanian Basketball League, and the WNBA, which is the first women's professional sports league in the US to utilize league-wide optical tracking. We also deployed optical tracking technology for the NCAA Women's Final Four last month, further empowering the explosive growth in women's sports. Each new deal marks an important proof point for how leagues are increasingly focusing on capturing rich data and enabling new forms of analytical insights for broadcasters, media outlets, and fans, all built on a genius sports technology. This then becomes the foundation on which we are launching new products, such as BetVision and real-time broadcast augmentation solutions, which are being monetized today. One really exciting example of how we've taken this as a step forward is our new partnership with Premier League team Brentford Football Club and one of its sponsors, G-Tech, to power augmented highlights to fans in stadia and on social media. We have now combined our player tracking and broadcast augmentation tools with our advertising technology to create entirely new sponsorship inventory for Brentford Stadium's naming partner. Now, an interesting data point like shot speed becomes a new, responsible asset for Brentford and for G-Tech. It represents an opportunity to associate their brand with the most engaging moments of the match shots on goal. Our ability to automatically capture this data through computer vision and AI and to transform it into a creative graphical overlay, all in real time, It's completely unique to Genius Sports technology, creating another level of connectivity for leagues, sponsors and fans. In summary, the greater our distribution, the more product we can monetize at scale and the more integral we become to the leagues themselves. This is how we have successfully retained key league partners like the NFL and English Premier League over time. Technology is increasingly front and centre in our league relationships, and this is the type of differentiated value that we provide. For instance, last summer, we extended our two most important data rights agreements, the NFL and Football Data Co, which governs all of UK football, including the English Premier League. In March, we also announced that we're now in exclusive discussions to extend our Football Data Co agreement through the 28-29 season. While this agreement is still under final negotiations, we are delighted that they have chosen to work with us for another four years. Given the massive importance of UK football on a global basis, this relationship has materially improved our commercial offering in the global sports betting market over the years. Looking ahead, we expect that this will continue to be a key pillar of our growth strategy through the end of the decade. While we obviously cannot disclose specific terms of the deal, we want to address head-on what we expect from our business over the length of this relationship. Like what we have proven with our NFL partnership, a strong and long-term relationship with FDC will enable us to continue expanding margins and increasing cash flows with the trajectory that we had always envisaged. We are now more confident than ever in our ability to sustain strong revenue growth for the foreseeable future. And don't envisage this growth slowing in the near term, given the positive structural tailwinds and the momentum in our business. In fact, now having our two largest data rights deals secured for the next four or five years gives us an even greater visibility of our cost base and a higher degree of confidence in the trajectory and the pace at which we reach our long-term EBITDA margin target of at least 30%. ultimately converting to increased cash flow. The increased guidance we announced for the remainder of 2024 should be indicative of our momentum into 2025. Not to mention, this also affords us four to five years more to become even more deeply integrated with the digital infrastructure of the leagues. This enables more ways for leagues to access next-gen data and apply it in many different ways, spanning broadcasting, fan engagement, advertising, sponsor activation, and sports betting. Ultimately, the access to this data enables us to continue fueling growth in our core business model. These rights agreements gives us access not just to live data feeds to power sports betting markets, but to the broader sports ecosystem where we can leverage data and technology to activate audiences with data-driven content, marketing services, and immersive viewing experiences. Year after year, we are proving how our commercial model is built to benefit from the multiple tailwinds that exist in the world of sports. Whether it's growth in the online sports betting market, growth in in-play betting, growth in sports digital advertising spend, and increased engagement in sports as a whole, we are poised to benefit in many different ways. This is how we've been able to achieve our strong results over the years. I'll now turn the call to Nick to discuss the Q1 results in more detail.