Sportradar’s US progress is moving faster than even the company expected. On Wednesday’s Q2 call, the company reported the adjusted EBITDA for the US is still in the red but profitability is on track to arrive a year ahead of schedule.
The sports data company reported Q2 adjusted EBITDA losses of almost $5.6 million, up from $4.7 million last year. The company noted these losses were expected given the “increased investment in the Company’s league and team solutions focused business.”
On the earnings call, Sportradar CEO Carsten Koerl pointed out that adjusted EBITDA margins in the US were in excess of 100% in 2019, down to 32% in 2021, and now just 19% this quarter.
The positive US news was just part of a productive quarter, which Koerl summed up well in the press release around the figures:
“As the world’s leading provider of technology solutions to the sports betting industry, our Q2 revenue exceeded our expectations for the quarter, growing 23% year-over-year. Confident about the momentum we have built in our business, we are raising our revenue guidance for the year. Given our strong cash flow generation and demonstrated good stewards of our capital, we have also chosen to pay down about half of our outstanding debt. We remain as confident as ever in the leverage and scalability of our business, and our ability to deliver results in the face of global challenges and economic conditions.”
Sportradar expects US profitability in 2024, not 2025
Revenues in the US were on the rise, coming in at $29.6 million, which is a 66% uptick year-over-year.
Given these positive trends, the company revised its forecasting. Instead of hitting US profitability in 2025, Sportradar thinks it will hit that benchmark at least 12 months ahead of schedule. Speaking about the change on the earnings call, Koerl had this to say:
“We fully expect to grow our revenues faster overall given the strong revenue growth, market positioning and the increased level of cost discipline we now expect to achieve profitability in the US at least 12 months ahead of the original 2025 target date.”
So far this year, the company has already handled more than €8 billion in bets in the first half of the year. With football season on the horizon, the company projects the amount for the year will be between €17-20 billion. As revenues are accelerating, the company is also reorganizing and streamlining the US teams, the sales team in particular, for maximum efficiency.
One change on the horizon for the company is the resignation of CFO Alex Gersh, who is leaving the organization to relocate to the US. While the search for a new CFO gets underway, the company has appointed longtime Sportradar employee Ulrich Harmuth to fill the position on an interim basis.
Top line numbers for Sportradar overall
As mentioned, it was a positive quarter for the company on an international level, not just in North America. Revenue for the quarter came in at €177.2 million, an uptick of 23% compared to 2021. Adjusted EBITDA did dip to €27.6 million compared to €31.6 million last year. Sportradar attributed the dip to impacts related to the war in Ukraine, rising head count, and the costs of renewing data deals with the various leagues.
The company also opted to pay down just shy of half of a €420 million loan, improving its liquidity position.
Speaking of the ROW, Koerl pointed to the joint venture with Ringier in Africa as a great example of how the company plans to continue to acquire customers at the same low rate and effectiveness in new markets.
“This will mark a milestone and create a blueprint for future activities and partnerships with other large media operators in trusting betting jurisdictions around the globe,” he said.
