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Genius Sports beat revenue and EBITDA expectations in Q1 2024, leading the business to raise its FY24 guidance.

Topline numbers

The sports betting data and technology business reported $119.7m revenue in Q1 2024, up 23.1% from the previous year and ahead of previously issued guidance.

The company recorded growth in all business segments including its Media Technology segment, which grew 63% to $35.5m.

Genius said the result was driven by growth in the Americas region, primarily for its programmatic advertising services.

Analysts at JMP Securities said the Media Technology segment’s higher revenue base highlights Genius’ ability to leverage its suite of technology products to drive revenue.

The Betting Technology segment continued to make up the firm’s largest revenue source at $73.9m, up 14% from the same period last year.

The supplier said this resulted from new customer acquisitions and growth in business with existing customers due to price increases on contract renewals.

However, Genius’ Sports Technology division bucked the trend by reporting a 4% revenue decline to $10.3m.

Following the positive results, Genius raised its FY24 revenue guidance to $500m, and now expects $82m in EBITDA.

This implies revenue and EBITDA growth of 21% and 54% respectively, while the business also expects to generate positive cash flow for the full year.

Genius hails Football DataCo deal

CEO Mark Locke said: “Following a strong year of execution in 2023, we are pleased to continue our momentum to start the new year, with the first quarter of 2024 marking another period of outperformance relative to expectations.

 “As we expand our technology footprint and work to extend one of our most important data partnerships with Football DataCo, we feel an enhanced sense of excitement and confidence in our outlook for 2024 and beyond.”

Genius announced in March it had agreed to extend its deal for the exclusive data rights of the Premier League and English Football League until 2029 with Football DataCo.

The company reported $6.9m in adjusted EBITDA for the wquarter, up from the $6.0m predicted in the guidance, but lower than Q1 2023’s total of $8.0m.

Q1 profitability was uniquely affected by the influence of new NFL domestic streaming rights, Genius said.

The rights are expensed equally each month throughout the NFL season, it added, despite there being fewer games in Q1.

The provider’s net loss widened slightly in Q1 2024 to $25.5m, compared to $25.3m in the same period last year.

Genius hints at future M&A

Genius reported it is expecting to hit cash flow positivity for the year, leading it with several options to deploy capital.

Locke said on the Q1 earnings call that the two areas the company would aim to allocate capital would be M&A and share buybacks.

He added that any M&A deal would have an “extremely high bar”.

He said: “What I’ve said a lot of times, I’ll say it again, we’ve got all the technology that we really need, and we’re very happy with it.

“So, in terms of M&A, it’s got to be a bit that they’re going to be businesses that are accretive and high-value for our shareholders.”

Genius previously purchased data tracking supplier Second Spectrum for $200m in 2021, as part of a bid to boost its streaming capabilities.

Analyst take

Analysts at JMP said the quarter demonstrated that Genius’ business model has continued to work, driving outsized growth as a result.

They said: “We are encouraged around the positioning of the balance sheet, whereby commentary ranged from willingness to look at M&A and taking tangible steps, through putting debt ($90M revolver) and equity instruments (shelf) in place to be opportunistic toward increasing value for shareholders.

“The willingness to buy back shares is in line with strategic thinking/priorities from several pure-play online gaming companies, including Gambling.com Group, DraftKings and Sportradar, as the industry is now gaining operating leverage after years of investment within the respective businesses, and we believe tangible EBITDA/FCF is on the horizon.”

JMP reiterated Genius’ market outperform rating and increased its price target from $8 to $9.

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