Genius Sports has combined ‘meaningful revenue growth’ with ‘disciplined cost control’ to increase its adjusted EBITDA rate by over 2,000% in Q3, whilst making gains in the US sportsbook market.
In releasing its financial statement for the third quarter of 2022, Genius Sports posted total revenues of $78.7m, up a steady $13.8% YoY.
Headline growth was witnessed in its media tech content & services segment, which recorded 29% sales growth up to $17.9m, whilst betting tech yielded 12.6% revenue growth up to $49.1m.
In practice, the sports data tech and broadcast firm struck new partnerships with 27 sportsbook customers during Q3 as it ramped up its client list in the US, including MaximBet, Bally’s Interactive and NorthStar Gaming.
In a busy Q3 bookended by the start of the football season, Genius launched new free-to-play games in partnership with NFL organizations, including the Denver Broncos, Indianapolis Colts, Las Vegas Raiders and Los Angeles Rams.
Whilst revenue growth was fruitful for the business during the quarter, the cost control measures caught the eye, with the cost of revenues shrinking to $72.8m, down from $86.4m one year ago. This left the firm with a gross profit of $5.8m, swinging from a $17.3m loss in Q321.
Group adjusted EBITDA stood at $7.7m, a vast improvement on the $0.4m loss made in Q321, benefitting from the revenue growth, cost control and ‘overall revenue mix.’
“We are pleased to deliver another quarter of growth and Group Adj. EBITDA profitability and we remain on target to achieve our full-year goals set on our Investor Day at the start of 2022,” said Mark Locke, Genius Sports Co-Founder and CEO.
“This year has been characterized by strong execution as we continue to deploy innovative technology, win new customers, and strengthen our key partnerships across the sports, betting, media, and broadcasting ecosystem, all with an eye towards cost discipline and profitable growth.”
Another notable measure from the balance sheet was a $25.5m gain from foreign currency as Genius benefited from other currencies weakening on the US dollar, giving a short-term boost.
This aided the group’s bottom line, with Genius Sports making a $9m net loss, an 87% YoY improvement from the $70m loss made in Q321. This was aided by a reduction in stock-based compensation, gains made on foreign currency, and improved profitability.
Following an improved period of trading, Genius has reaffirmed its revenue and EBITDA projections of $340m and $15m respectively, despite risks associated with foreign exchange rates.