Q3 2021 Sportradar Group AG Earnings Call

Greetings welcome to support radar third quarter 2021.

[music] difference call.

At this time, all participants will be in listen only mode.

And answer session will follow the formal presentation.

If anyone should require operator assistance during todays conference. Please press star zero on your telephone keypad.

Please note this conference is being recorded.

At this time I will now turn the conference over to Sandra Lee Sandra you may.

Thank you good morning, everyone and thank you for joining us for sport radar its financial results conference call for the third quarter ending September 32021 on the call today, we have sport later, CEO Carsten, Carl and CFO, Alex Curse. This call. It maybe the Q&A portion may include forward looking statements.

Related to the expected future results for our company. Our actual results may differ materially from our projections due to a number of risks and uncertainties, which are described in our earnings release and other SEC filings. Today's remarks will also include references to certain financial measures not reported in accordance with I F. R.

Additional information, including a reconciliation of these non I S. R. S. Financial measures is provided in our earnings release. This conference call will be available for replay via webcast through sport Raiders Investor Relations website at investors that sportsmen, our dotcom Carsten will begin with an overview of sport radar.

Followed by our most recent highlights Alex will then take you through a review of the financials before we proceed to Q&A with that I'll now turn the call over to Carsten.

Thank you Sandra and good.

Good morning to everyone and thank you for joining our first earnings call as it.

A public company.

Some of you may be neutral I was sorry I was.

I'd like to take you through a brief overview about where we are what we do and the massive growth opportunities. We see in front of US. Please note that this brief overview to make today's call a little bit longer than that.

What we typically go for them.

I'll provide you an overview of our recent progress and the performance and finally I will turn the call to our CFO, Alex for the financial review of the quarter and expectations for the remainder of 2021.

<unk> is a leading technology platform, enabling next.

Generation of engagement and sports and the number one provider for <unk> solutions to the global sports betting industry based in measured by revenue.

We provide mission critical software data and content via subscription and revenue share arrangements for sports.

Batting operators.

Companies, we have been at the forefront of it.

Question on the sports betting industry, and we continue to be a global leader in understanding leveraging and monetizing the power of sports data.

Our mission is to enhance the sport fans.

And engage them globally.

Through our fully integrated technology and service platform.

So operator office one of the most robust fully integrated sports data and technology platforms.

Surface critical data infrastructure and content layer to the sports betting and media industry.

On top of that infrastructure layer.

Media, if you have built one of the most advanced and comprehensive software offerings.

Our product simplify our customers' operation drive efficiency protect integrity and enrich fell experience we have the largest volume of sports data in the world.

What.

So much more important is that we are continually innovating to use that data to provide valuable insights and develop products.

Move us higher up the value chain for our customers.

Our end to end offering integrated technology and global footprint makes us an important.

Total Parker for all customers and deeply embedded across the sports ecosystem.

For all over a 900 sports betting operator customers recover more than 750000 events annually across 83 sports, including lot of data coverage of 600000 events across.

77 sports.

The breadth of our data offering and sports coverage is an important differentiator for spot radio.

We are the number one provider of data to bookmakers, the supply sports data to over 85% in the fourth book makers in the United States.

Our.

Our offerings include pre match data and ops loss data and trading services, which we call MTS.

As well as our content products.

Our full suite of software solution includes managed platform services batting entertainment towards virtual games and programmatic.

Dramatic advertising solutions.

We are the only one stop shop provider across the value chain and B to B business for our over 150 Sports League partners.

We provide across our 900 betting operators and 350.

<unk> 50 million.

Police to.

To distribute that data and the content globally.

We give them greater reach to serve as an intermediate to a highly regulated industry.

Importantly, we provide integrity services to more than 600 leaks federations and law enforcement agencies.

Yes.

<unk> services had to ensure a fair playing field for all.

But it is also critical.

Our integrity services give us deep relationships with sports leagues.

Note that we can that.

They can count on us.

For over 350 media customers, including both traditional.

<unk> leaders, we provide products and services to help reach and engage sports fans across all distribution channels.

Finally, our newly import from sports solution vertical completes our circle of.

[noise] offerings to meet all of our customer and for technology need sentiment.

In three months.

This vertical leverages the power of hardware positions through cutting edge use of computer vision to help support organizations to better performing teams to better perform in the field and increased profitability.

Our field actions.

We are very excited about the.

The recent acquisition of synergies sports and interact sport. So so Virginia synergy we have a strong presence in the world of coaching and analytics dominating both the professional and college basketball and baseball thru interact sport. We have gained an immediate presence in the sport of cricket.

We couldnt be more excited about sports solutions vertical and we are focused to aggressively build our team and the computer vision experts to the best in class automated video production and data management solutions.

Now some words to our growth strategy.

<unk>.

Turning to the growth strategy, we are in an exciting transformative time.

Advancements in artificial intelligence machine learning and computer vision.

Changing this industry as many other industries.

Started colorado more than 20 years ago.

I have been.

And the business for far longer and never experienced a time as exciting as this one now right now.

In addition to the digital transformation, the sports and media in the bedding industry are converting bringing together massive tabs.

Please see our public filings and slides.

In the presentation, we have published for further statistics, how we fueled attempts finally, the U S is driving the pace of change with a market that is rapidly rapidly adopting digitalization and sports betting to capture all this opportunity.

We are continually broadening our.

Portfolio to better serve customers and increase our touch points with the end users across the sports betting value chain.

The more knowledge of the end user and we are able to collect the more valuable our insights and platform services to companies.

Both parent companies and of course also to media companies.

Product. This network effect also enable us to enhance our product portfolio.

Serving as a key element of our growth strategy.

Other elements of the growth strategy are the followings.

Hum recapture growth in global markets, we intend to capture significant growth.

New and existing markets around the world.

We have the infrastructure in place to take advantage of the expected growth in various markets, especially the U S where the market was approximately.

$1 billion in 2019 and is expected to grow to approximately 23 billion.

Carlos at maturity in the next 12 months.

Second expanding to offers in the <unk> products and services, we will continue to increase adoption of new and existing products to further grow our share of wallet with our customers.

We believe that our NPS.

At solutions provide customer service.

Second value and these products are currently underpenetrated in our existing customer base, we expect update of this innovative solutions to be higher.

I think companies in the U S market will be primarily focused on gaining market shares.

And acquiring new customers.

Kurt.

We cover the entire end user journey to better serve our customers.

We see considerable value in combining our deep knowledge of data with the increasing amount of user data, which we collect across all of our products such.

As MTS at AVN, OTT, which allows us to better understand the entire end user journey.

These insights will enable us to cross reference and users from pairing to entertainment and vice versa.

Improve user experience on behalf of our customers and consequently built.

Build better products.

We also believe that this knowledge together with our technical platform and capabilities will help leaks to get direct customer and sports and access in the future.

For us.

We invest in alternative content capabilities and services.

We continue to expand our content offerings beyond plush sports betting into esports virtual sports and gaming.

Please that our bedding operators consumers are looking for a way to provide their customers with a more variety and flexibility in their content offering alternative.

With content is not dependent on last court. It is becoming increasingly important and COVID-19 has accelerated the adoption of new categories of real and mature and sports.

And fifth.

Growth of funnel capabilities and offerings, we believe.

That there is significant opportunity to provide advanced capabilities in the programmatic advertising market for betting operators.

Bookmakers are expected to inject fast amounts of capital in this underpenetrated customer acquisition channel as they seek more efficient methods to acquire new customers.

Belief.

Leave that after global universe of spot trends.

Approximately 20% our sports betters.

We plan to increase engagement for all school advance and better serve them by leveraging data and insights we have to the end user behavior and preferences, making apps.

One of the most sophisticated forms of digital marketing for sports.

We are incredibly excited about this forward looking growth map.

And that serves our growth strategy delivering value to our customers and partners and enables us to extend our leadership in the market we are serving.

Now I'd like to discuss some recent highlights.

That show you, how we are executing on each of the growth pillars, and taking advantage of the strong demand environment.

Today the team in <unk>.

Europe works hard to three o'clock in the morning.

On.

Milestone deal for sport rider, which we just announced.

Like to say, thank you to the team for this extra mile and the effort.

We recently announced an expansive eight years official deal with the MBA.

As their exclusive partner.

The leagues will use our wide ranging technology capabilities to help them make further grow their market share in the U S and abroad.

Together with the two years run rate of the existing deal.

That gives us a solid deal of 10 years to develop future solutions.

All the three business verticals teams.

Bearing sports Entertainment basketball is the largest U S sport in the world.

With the popularity of around about 2 billion sport fans worldwide.

<unk> with this partnership with the NBA are really.

And we are very excited.

To further showcase the momentum of our business. We also won a landmark agreement with UEFA after a competitive process.

Selected <unk> as their exclusive collector in the distributor for data embedding purposes.

And just incredibly exciting given it's the first data deal ever for UEFA embedding.

Suffers the most pattern sport in the world with a handle of 850 billion each year.

Far exceeding the handful of American sports such as the NFL.

Which is 41 eight several billions annually.

For those who might be familar with similar terminology handled it's defined as the amount of money in wages acceptance. Once again 850 billion euros is the handle and soccer 40.

This eight 7 billion.

NFL on an annual basis that shows how important to support this.

We also announced the multi year extension with the IPF to serve as its official data partner.

Only two soccer tennis is the second most pattern sport in the world with a handful.

140 billion euros.

We are proud that we are continuing our 10 years plus partnership with the ICF.

Finally, we secured important deals with the international Cricket Council.

<unk>, France top basketball Nik you said just a few examples of how we are disrupting the market.

We're going to apply our data driven approach to the sport universe.

We make continuous investments to ensure that the data we are collecting with robust reliable and delivered with high speeds and low latency.

Computer vision is one area that is extremely exciting to me.

Given the potential to capture so much data and and to go into.

To capture.

And quickly with precision.

In the third quarter, we implemented the computer vision for Wimbledon and U S open matches.

I couldnt be more excited about the potential for this technology.

I include my discussion around the data rights field by addressing our position on exclusive data.

We seek exclusive data deals only when the economics make sense.

But we also have access to enormous amount of data that.

We're able to monetize even if we don't have exclusive rights I am pleased to say that we have not lost a single bearing clients do.

Due to not having the exclusive rights to NFL data we have.

Kept our position as the preferred supplier for every U S pairing operator.

<unk> did not lose.

We are a existing contract.

We were also able to extend long term partnerships with the likes of fine jewelry.

Lastly, we achieved 99% of our planned NFL revenues budget for our U S media and the battery business.

I mentioned earlier our ability.

And understand the end user journey as an exciting area of growth. We intended to approach this opportunity through all at once which identifies the profile of sport gives us rich insights for all customers, who want to target them. This business really illustrates that the more data we.

To us the better we can do our job in delivering meaningful information to our customers. We are seeing good momentum achieving.

Seven 6 million for our etch business globally in the third quarter.

Of which our U S revenue totally is approximately $1 8 million in the same quarter.

We have relaunched app globally in 2019, and only recently began to focus on the US This is just to begin of betting companies look to aggressively acquire new customers and more advertising comes online and other channels this quarter.

Water.

Lift.

Important strategic.

With partnership with a dominant leading programmatic digital out of home advertising planning and buying platform integrating spot rate is.

Spot data suite offering into their demand side platform.

This allows brand marketers and agencies to do out of home campaigns.

<unk> that include content, such as glass cutting off another spot data and other very exciting area that demonstrates the value and expertise we provide to our clients is managed trading business. So we're in short form MTS since 2022 MTS has played.

And integra.

The main part in the U S wagering landscape.

Our MTS offering.

Sophisticated turnkey trading risk lifeboats and liability management solution that perhaps bearing operators boosting margins and profits, while increasing efficiency and managing.

Overall, we grew our MTS customers from 158 globally in the third quarter of 2020 to 192 globally this quarter.

<unk> been gaining strong attention this year in the U S. In the third quarter, we signed a strategic MTS agreement with fans unite that's the law.

A lot.

The company to provide optimal real time odds, providing more value to their customers.

The other regions of the World that MTS operates in the U S has a bespoke revenue share deal price consideration.

Turning to <unk> services. This is an area, where we have market leadership.

And expertise that will be difficult for others to replicate.

Our value added expertise helps sport leagues to do a digital transformation create engaging content and have additional revenue streams.

Our <unk>.

Revenue increased by 13% year over.

Year to <unk> 9 million in the third quarter, driven by volume growth as we were able to sell more matches and deliver new content.

Notably our adjusted EBITDA in this segment increased by 220% to $9 6 million and segment.

Adjusted EBITA margin improved from 12% to 33% year over year, driven by lower costs of some of the content.

And finally touched on how important global market start to support greatest growth, particularly in the U S. We made significant investments.

Year to capture the enormous opportunity and they are paying off.

For example, we announced the partnership extension with U S market leader <unk> through 2028, which makes sport later, the chosen data and our supplier for U S sports.

Spot rate of provides tangible.

With access to the most comprehensive suite of bearing product in the marketplace, which will play a critical role.

Aiming fabulous growth with the U S sports betting landscape.

To expand significantly over the next several years.

We also entered into a five year deal with <unk>.

Create a Polish interactive sportswear it provides balance to successfully complete pre match betting service life bearing services and content solution portfolio.

Palace incorporates the data profiles as part of this ambitious expansion plan to become a leader in the North American sports.

Bedding market.

In summary, I believe.

We are exceptionally well positioned to capture the significant growth opportunities ahead, and expanding revenues from our existing customers acquiring new customers leveraging the power of data to drive insights and innovation.

<unk> and broadening and deepening our partner ecosystem.

Also we are very proud of all votes have achieved we acknowledge that this is just a step forward in serving our customers colleagues and shareholders.

Our exciting transformational times operating a global business.

As the market leader combined with the ability to make strategic investments as a result of our public listing.

Unlock dynamic growth opportunities.

So I'm ending my section here and handing over to our CFO, Alex who will discuss our financial results for the quarter.

And the guidance for the year, Alex and over to you.

Thank you Clark and good morning, everyone.

<unk> already mentioned, we had a very strong second quarter of 2021, and an excellent nine months for the year, Let me take you through our quarterly results in.

Detail and then ill provide our full year guidance.

Got it.

'twenty one.

Okay.

Okay.

Third quarter group revenue grew 8% to reach $136 8 million euros.

Now looking at the segmental.

<unk> revenue detail, our rest of the world betting revenue grew 24% in the quarter to $78 6 million euros. This growth was primarily driven by upticks in our higher value add offerings, including managed batting services, and <unk> services, which increased 63% and 20.

Center perspective.

As a result of the increase was as a result of increased turnover involved as well as new customer wins.

The second segment is of course, the rest of the world revenue in Carson had mentioned that.

As part of his presentation, but just to reiterate it grew 13% to 29 million euros.

This growth was impacted by Covid related schedule changes that occurred in 2020.

Adjusting for that for that revenue growth.

Yeah.

EBIT percent.

This growth was driven by volume growth as we were able to sell more matches, primarily soccer and baseball as well as growth from additional.

Additional new content being sold to existing and new customers.

Turning to the United States, we grew 119% in the quarter to $19 6 million.

This was driven by growth in our bedding service as an underlying market in turnover group, we also experienced.

Option of our ads products as Carsten mentioned Bruce.

In U S media and positive impact from the acquisition of synergy sports.

Turning into one of our favorite metrics, which as a group dollar based net retention rate. This is this was standing at 128% at quarter end.

Compared to 114% of Q3 after quarter end of 2020 Q3 of 2020.

Demonstrating continued execution of our upsell and cross sell strategy and underscoring the quality of the products and services, we provide to our customers now.

Now a couple of words on the major cost items.

In our on our financials, so personnel costs for the quarter were $51 3 million, an increase of $20 million of a prior year's quarter.

That was a resulting that result happen because we have about 600 more ftes at the end of Q3 of 'twenty, one versus Q3 of two.

As we continue to invest in technology and product. We also introduced me to stock based compensation and that is reflected in that number as well as the reversal of temporary corporate cost savings and third quarter of 2021 versus third quarter of 2020.

Other operating expenses were $25 2 million.

<unk> thousand an increase of $15 7 million over prior year.

The increase was primarily driven by incurred cost for the IPO.

Compliance costs relating to operating as a publicly listed business in the U S and some M&A costs.

Total sports rights costs decreased by 90 million to <unk>.

$28 7 million in the third quarter of 2021, resulting from fewer major sporting events in the third quarter of 2021 versus third quarter of 2020 that again relates to the Covid changes that occurred in 2020 too many too many schedules many league schedules.

Adjusted EBITDA was $20 nine.

As Carsten mentioned euros, that's an increase of 21% versus Q3 of 2020.

Adjusted EBITDA margin was 15% in the current quarter, a slight decrease compared to Q3 of 2020, however, reflecting additional IPO costs of approximately $5 7 million euros.

Million incurred during the third quarter of 2021.

Eliminating the impact of those IPO of course would result in adjusted EBITDA margin of 19%, reflecting our continuous ability to achieve operating leverage.

A few words on the adjusted EBITDA by segment.

Rest of the world betting.

EBITDA was $44 7 million up 36%.

Rest of the World betting segment, adjusted EBITDA margin improved to 57% versus 52% in the prior year driven by growth in higher margin services, which we've already spoken about.

Rest of the world.

Adjusted EBITDA was $9 six.

Adjusting as Carsten said up 220%.

Rest of the World segment, adjusted EBITDA margin improved to 33% versus 12% in the prior year driven by lower cost of certain content.

United States adjusted EBITDA improved by 24% to two.

The negative $6 6 million.

6 million United States segment, adjusted EBITDA margin improved from negative 60% in the third quarter of 2020.

To negative 34% in the third quarter of 2021, reflecting the scalability of our business and clear path to profitability, while we continue to invest in the U S market.

A few words about our turning to liquidity and cash flow.

We ended third quarter with 780, $768 4 million euros in cash.

Total liquidity available for us.

Including Undrawn credit facility was $878 4 million euros.

As.

The end of the third quarter total debt stood at $436 million $436 7 million, which resulted in a net cash position of $331 7 million euros.

During the third quarter of 2021, adjusted free cash flow.

Increased by.

144% to $32 9 million euros, which led to an adjusted free cash flow conversion rate of 158%.

Now just a few words on the outlook for the rest of 2021.

For the full year of 2021, we currently expect.

<unk> revenue in the range of $5 53 to $5 50 million euros, reflecting annual growth of between 36, 6% and 37, 1%.

For adjusted EBITDA, we expect in the range to be 99, five to $101 5 million euros.

Representing a.

A year on year increase of between $29 four and 32%.

With that we're now happy to open the call for questions. Operator will you. Please open up the line for Q&A.

Thank you.

That would be conducting a question and answer session, if you'd like to ask a question.

Please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue you.

You May press Star two if you would like to remove your question from the queue.

For participants using speaker equipment may be necessary to pick up your handset before pressing the star keys.

So there will be interest questions from as many participants as possible. We ask that you limit yourself to one question.

And one follow up.

One moment, please while we poll for questions.

Thank you and our first question comes from the line of David Karnofsky with Jpmorgan. Please proceed with your question.

Oh, hi, Thank you so much.

<unk> I was hoping you could provide some additional background on the deal why do this agreement.

Now when it still had a few years to go.

The initiative with the NBA and then can you just.

Expand on some of the additional distribution rights, you've acquired and those start immediately or in 2023.

Oh.

Yes, good question David.

Was this the laws.

Along.

Long effort and we we discuss it.

Quite a while with our partner and we are Super happy that we could announce it today.

The U S is undoubtedly the biggest growth opportunity, which we see in front of us and we want to focus on creating value so invest.

In the United States are our top priority. The MBA is the top adding sports in the United States.

By pre match, but more important by life life is something where we see the main trends in the United States and we see a lot of opportunities.

Cause here with our livelihoods and with our managed trading services products.

This or this.

One of the main motivation looking now into the scope, we widened the scope enormously. So that includes tracking data. It includes a tracking system.

And we can work now with us.

To monitor solution vertical.

New new ways, how we capture data, how we give that to teams and how we create value.

With the sports fan with new data, which we haven't insights the exciting thing with EMEA is some.

It's a real <unk>.

Strong.

<unk> technology partner the MBA tries to think years ahead.

And the deal is constructed volatile strong technology partnership with a focus on U S betting and of course, but also internationally and I mentioned, the 2 billion sport fans. Following the MBA globally, that's simply fits perfectly.

Perfect to our profile.

So thats the range, it's an extended deal.

But the scope and the focus is of course in the United States with the betting opportunities.

Okay, and then maybe as a follow on Alex any additional detail you can provide on the on the equity position for the MBA and does that come to leave now into.

Do you know.

The deal is we as we I think announced starts at 2023, so that's when things start, but obviously, we have a well.

We have an agreement and they will become an equity share.

Shareholder in spot radar, which is really exciting for us. This is the kind of shareholders, we absolutely want.

So that's.

Really no other detail other than hopefully we already discussed in the press release.

Thanks for the question.

Our next.

<unk> is from the line of Thomas Allen with Morgan Stanley. Please proceed with your question.

Okay. Thanks, just one other clarification MBA deal.

In the old deal.

You were the exclusive global provider, but you had a co exclusive in the U S and I think China wasn't exclusive either does that continue or you are.

Lucerne for everything by yourself.

The headline of the press announcements say exclusive global data provider.

And I hope that.

Gives you enough clarification, there is an opportunity.

That the two partners the MBA and spot radar looking for market innovation, and if there are companies, which need data to create innovative products.

It's something which is always an interesting spot rate and of course of the MBA.

So that is the difference to the existing team I hope that clarifies the situation.

Okay. Thanks, and then just as my follow up.

A lot of the operators talked about a hold impact in the third quarter.

Quarter into the fourth.

With respect to most of your contracts are not tied to revenues, but did you have a negative impact from from.

You know I've been storing again against the operator.

Alex do you want to take this question or should I.

No go ahead of course NII than.

And then I quickly take it no. The opposite is the case we had.

We had a very very strong MTS growth.

And that MTS is our products, where we are closest on the profit of the bookmakers.

We enjoyed a 71.

And I think.

Year on year growth in that segment, there are always some ups and downs, but.

What has happened in the U S with a halt.

And profitability was not the trends worldwide.

Worldwide overall induce mtn's product that has leveled out.

<unk> for us and showed a strong growth and strong profitability.

Perfect. Thank you.

Our next question is from the line of Jason Bazinet with Citi. Please proceed with your question.

It's a simple question can you just remind us how many.

We have.

Sort of equity participation via warrants and radar today and how should we think about growth in fully diluted shares outstanding over the long term, what's a reasonable growth rate based on the agreements that you do have in place.

Yeah.

As a.

<unk> has a very general statement I think you will not see too many equity deals from spot rate. Unlike we did it now with the MD MBA is.

Our most important partner in most of our most important partner from the scope and from a size and.

And also looking to.

The extensive partnership.

So that was a very clear step for us to do this to group with our with our problem, where we enjoyed in the last seven years, a sensational corporations and it's in the sweet spot of our growth with the U S market.

We have an equity participation with.

The National Hockey League.

On a much smaller range than the MBA.

<unk>.

And you might see some smaller equity deals in the future here not to the extent in scope.

Like we see it now.

With the MTA, we're super happy with this.

But.

But.

We do not intent to really have widened too much and dilute shareholders you see here of value creation for the MBA and plus baud rate and Thats. The reason why we did this.

Perfect and if I can just ask one follow up maybe I missed it in the release, but do you have the number of fully diluted shares outstanding as of the quarter.

Well, Alex gave you already to answer we have to we see a shift to the release its flesh out of depressed and I think he NUCYNTA royalties.

I think if you meet if you mean in terms of.

The number of shares for spot radar you don't mean the.

Talking about the MBA.

No no for sport.

Yeah. So.

Spot rate.

I can tell you that we have total of $205 million 454977 eight shares.

And then we've got a total of $903 million 670977 participations.

Right.

Which convert into 10 times less shares.

Ultimately at some point.

Okay. Thank you.

Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

Great.

Thanks Keith.

One is I just wanted to clarify your answer on the MBA data is it is it exclusively in the U S for NBA data, but not starting until 2023 in other words it still.

It's still is shared.

Can be gotten from others before 2023, just wanted to clarify.

Right.

And then also just.

I wanted to ask if you could give us a sense of either number of customers or percent of customers.

Using sport radar for NFL data just so we can kind of think about that opportunity kind of what opportunity. There is outside of the exclusivity there. Thanks.

Yeah.

Hi, Robyn.

For the first part.

<unk> remains in place for the next two seasons.

And there is no change so there will be there are several providers for the U S life data piece.

In <unk>.

If I thought the new deal kicks in and.

The new deal is different to the old one so with the new deals the NFL and at the MBA and sport radar can decide if it makes sense for one or the other provider to get access to the data with the soft licensing.

Thing.

And I think that's very good for being innovative in developing the market and we will take that decision together with our partner NDA, but the mechanics has fundamentally changed with the new routines.

That's the first part of the question.

And the second one with the NFL.

We told already that we lost not one client the Nevada market.

And we lost.

We recouped, 99% of the revenues, which we predicted in media embedding together, which shows that we have been able to compensate the loss of.

The exclusive data rights with the NFL by capturing data in an alternative way from a client perspective, it's just exactly as we said during the roadshow.

This was expected that the big operators to tier one operators.

The exclusive data from the NFL.

NFL.

Also widen some of the partnerships there.

<unk> one <unk>.

Haven't done this so the smaller ones are staying with <unk> data I think we are speaking about a little bit more than 10 operate this year.

Does that answer your question.

Yes, yes, and just if I.

Clarify when you you mentioned that there's a decision in two years, where you. It sounds like you have the option to have the MBA data exclusively is that I assume there would be.

Sort of an additional fee or something if port radar chose that option is that fair to assume no no no that's not an option.

It could come then you misunderstood me there was a clear regulation between the partners MBA in sport radar that we want to be able to give the data to some innovative company. We keep that open and there was a partnership agreement on this and there are clear as a clear.

Regulation in between which I can't go too much into detail, but it means that's for data.

B, the very premier supplier of MBA data to the U S marketplace in the next eight years from the season 'twenty two 'twenty three.

So.

That was the reason of the deal does not option, where we have to pay more money.

<unk> is closed now for clear financial terms and there is nothing on top of this.

Okay. Thank you.

Thank you.

Our next question comes from the line of Shaun Kelley with Bank of America.

Please proceed with your question.

Hi, Thank you everyone I just wanted to.

Maybe dig in on some of the changes in economics, you guys saw as a result of.

Some of the deals we saw announced wins with the NFL.

Kind of back in September.

Has any of those relationships that were announced.

With you now sort of other operators impacted let's call it the pricing dynamic or the take rate on any other products or deals with league. So have you seen any pricing pressure on things that were sort of not NFL, but might have been tied to or impacted by.

The NFL agreement that your competitor has.

<unk> is out there in the market.

Of course the market.

<unk> on the savings and the market was off to pay a significant premium.

Compared to what they paid and the season before and <unk>.

And that has an impact on the market. So there is a sensitivity on the book.

Happy to have this same as the bookmakers sensitive on tax rates in a very general way we see.

Really strong strong growing market in the United States at the moment. This is more driven by capturing market shares.

There was a cost sensitivity.

The cost sensitivity is probably not the main priority for the operators. That's what we see in general going now into the granular.

As you know that.

The MBA and the major League baseball they have a different distribution model. So they have the.

The upfront which is paid.

But to baseball and basketball.

To get them access to the official kick, which is a difference to the NFL distribution model and toward the NHL distribution model for the NFL.

We are the exclusive right orders also for the next decade for 10 years.

David like we have it in all of this the MBA and we see that as a thing which we constantly have to reach you re constantly have to see changes in this landscape. It's a very dynamic market, but for us from a whole perspective. It was very important that we secure long term stability. That's what we did now with.

The MBA for 10 years and with the NHS for 10 years and we are very proud that also for a long time, we are associated with the major League baseball.

Great. Thanks, and maybe just as a quick follow up.

A lot of the sports betting operators in the U S are moving to are focused on sort of full tech stack.

Just wondering I think you mentioned that youre seeing actually quite good traction with some of your MTS in NPS products could you just give us a little color on where that traction is especially in the United states with clients or customers and yet like how does the sort of full stack ownership have an impact with some of the relationships with some of the bigger operators.

They are super happy so, but we have to die for you really deep into the details I hope you allow me a minute to explain the requirement.

If we speak about.

Some services, which the bookmakers take in house it must mean platforms. They are a very strong platform providers.

And this growth we have a platform there are many others, which are claiming to have a very good platform.

And our platform is doing the full service that's the pay in payout user acquisition back in front of them et cetera.

Including risk management modules.

Our MTS service.

It is continuing to grow and grow from a liquidity perspective, we are now on a year by year handle all round about run rate 15 billion in U S dollars a ticket smoke we aggregate in the background to more tickets and liquidity you aggregate. The better you are in a position to use AI.

To compile what we call a fair.

Price.

And that gives you over the long term if you have more liquidity and diversity pricing power for this I think thats not disputed from one of the players in the market. It's only a question how quickly can you reach a position.

Isn't that your pricing power is thick enough.

To generate alpha with the prices.

And.

We are working very hard on this and like I alluded in my speech.

And Thats, a very exciting territory for us.

Whenever we can provide superior service.

The bookmakers it will not hesitate to take it and there are some bookmakers, which simple might see that there was an ACH if they have their own platform.

I think in a very general way.

The platform is a software business and in.

And sports betting operators.

Our <unk> spending operators, which have to do the branding and marketing the licensing a lot of daily operations. So I think they're a very qualified companies doing software development and managing the modules like I just said it to you that's our opinion about the debate of in sourcing and all.

Outsourcing I think it simply.

Weighted by who can provide the more efficient and better service.

Our clients can have a better offer and be more profitable and this is the decision point in the whole pie I gave you an understanding about what is driving this this is at the end really liquidity.

Thank.

Thank you for that and if I can just if I could just ask answer I mean.

Just add a little bit we have currently seven MTS customers in the U S. Right. So yes. They are very small and just you wouldn't you would expect us to start with a small bookmakers, but the reality, but the fact that there are seven of them that already see the value in the product is very encouraging.

Great. Thank you both.

The next question is from coming from the line of David Katz with Jefferies. Please proceed with your question.

Hi, Good morning, everyone. Thanks for taking my question.

I wanted to just talk about kind of a more.

Long term vision here.

And I think thats.

Largely.

What a lot of discussions with clients are about sport radar.

If we look at the deals that have occurred yours with the MBA others with genius theirs.

Our stake involved in a cost involved.

How do you think this evolves the next.

510 years.

Is there a point at which the cost of these exclusive rights.

Either stabilizes or becomes uneconomic.

Help us some qualitative where it's been a long term vision for those.

Hum.

Very top level.

Yes, it would be more concerned or for 51% tax rate.

Comparing it to what are the costs of official data.

And the market can.

Can decide on this slightly the U S market has decided to valuable official data.

And.

And I think that's a great day.

So there are lots of pros in this.

I don't think that that internationally every market will follow now the sample of the United States, but I'm thoughtfully there is an acceptance of.

Official data.

And there was a participation of sporting goods.

Which I think is totally okay. I told you already before that we have not the intention to widening the scope here and the MTA was a very very special deal for us because it's absolutely under core of where we want to go and our wishes are totally overlapping and our wishes far beyond the data distributions.

I wish to use the digital fan journey the direct.

Consumer product to help to get into this channel with all the things customized OTT services, which are in their user profiling hooking them up with merchandising.

Connecting them with sponsorships, sending the right message on the right channels.

Lots of opportunities around <unk> et cetera.

That's a far wider vision why we did this deal.

The NBA I think your comps simply replicated in only focuses on the data if we are looking into the future.

I think.

The market will find the right balance here.

Your system official data is something which the market has accepted in the United States spot radar is executing the vision.

<unk> mission here very consequently.

I think from the scope was flow data you will see not many of those deals following now scope off of.

The MDA for the NBA it made a lot of sense for us to align our equity with them.

And have them contributing in our growth.

Understood and if I can just follow up and I apologize if I missed it.

The MBA.

States that theyre receiving.

<unk> have you told us.

How.

How large that is or how to calculate how we might go about estimating that.

It's 3% in total and it's vesting over 10 Years' time at the interim and different tranches.

Perfect. Thank you very much.

Question was coming from the line of Michael Graham with Canaccord Genuity. Please proceed with your questions.

Thank you.

I wanted to just ask a high level question about your.

<unk> business.

We hear all the time on the bedding data side of your business that.

You are in a unique position.

Clearly you have a complex product that is very difficult to replicate and that creates a lot of competitive moats for you.

And I just wonder if you could comment on your <unk>.

<unk> business and the extent to which you are able to build.

<unk> moat around your business that would make it difficult for others to replicate.

And clearly.

Well I reported the growth numbers Alex.

Most of the growth numbers with AAV.

And I think.

If you look to this this is really a super super strong and from a profitability perspective, we see that as we get the scale and the product. It's all about building approach.

Portfolio.

Which is interesting for specific client groups and regions.

There are not many real global betting operators.

A few of them they need a different product than operators, which are focusing for example on the U S. As a region. So.

To look that we get the critical mass of rights for the regions and fitting that into the into the profile of our operated targets.

That's a challenge and we are on this journey since now many years, we reached a point that we obviously came scalability here.

And this is reflected in the numbers.

The future of this service and what is really diversifying us is.

We are using now the technology, which we gained from the profiling of users and putting that into the audio visual service that we understand this is a customer who might be interested in baseball.

Baseball he might be interested in the Lakers and you might be interested in libra. If we have that information. They can push him whatever video highlights what we can enrich during the veto to offering and show him a specialized offering or the specific offering for his favorite sport for his favorite team out.

Out of the bookmaker offerings, where we provide the service so that intelligence to detect the user and to have the bookmakers to connectivity what he wants to do he wants to stimulate he wants to do a retention and acquisition.

The future development of the service we started with this.

Years ago, we have I don't know.

Our journey.

<unk> reflected in the numbers I think.

Okay. That's great. Thank you very much.

Thank you. The next question is from the line of Bernie Mcternan with Needham. Please proceed with your questions.

Great. Thank you very much for taking the question.

I was just wondering if you could detail just how much.

Of the U S or global GTR, the MBA accounts for in because in your prepared remarks, I thought you said.

That the MBA was actually bigger than the NFL and if thats. The case is there any reason to think that the price you paid for the MBA would be lower than the rumored price the genius paid for the NFL.

Okay.

Compare prices, we are paying and I'll just stop paying we have a strong reason why we do this and this is always commercially driven.

We are looking to generate profit for our shareholders and that's the reason why we are doing such deal.

MBA is following this general.

Idea looking now to the leak split, but I can give you is the breakdown.

For this year.

From the leaks in the split on the <unk> in the United States. So when I got here four pre matches that the MDA on the 21% the NFL is around 19.

Percent empty mlps, 17%. The NHL is under 4% then, yes, NCWA colleges and theaters.

What I get from a <unk> split in play that's the in place revenues the mbas on the 25% and the NFL.

A little over 14% same like the Mlps almost 15% this year.

So what I read from these numbers is the MBA is clearly a bearings in play we believe that in play gets more and more market shares. We believe that this is a trend.

Which follows very strongly what we saw in the international, especially the European markets in the last 10 years and as you might know in the in the European markets in place more than 70% of the revenues.

At the moment, it's more upside down in the United States, but we think there is a strong acceleration here in <unk>.

Empty mbas and thoughtfully.

A better life betting sport them. The understandings. This was one of the decision drivers here because we believe of this market development.

And.

And I think the numbers are speaking here for a more fast moving sport DNS.

The NFL has different characteristics.

Terrific and this way.

And globally.

Tears on soccer as the 850 billion handle so thats complete turnover, which is matrix on soccer comparing it to $41.

8 billion for the NFL. This other official numbers from the last year. So.

By comparison here, which shows the NFL.

Sport American football comparing it to soccer globally has run about 5% of the handle <unk>.

Volume of.

Of course, it's only a part of soccer.

Many other leaks included in here.

Give you.

A feeling for that I mentioned in the global sports betting market.

That's great I appreciate all the color and just as a follow up.

Just interested in how competitive the bidding process was for the MBA I'm, assuming you know you ingenious when pretty hard at it but was there a sense that there are others involved as well a big question that we get is what endeavor and.

<unk> is getting to try to do and if they could be a greater competitor in the space. So really if this is like a two player bid for the MBA or if there was kind of a much broader bid.

Bidding.

The amount of bidders.

The asset.

All I can say you is it was very intensive process.

Oslo myself with the European team sitting here in Switzerland today has been working on this to 330 in the morning. This morning.

And I'm very happy that.

Because as COO.

Super strong support with our U S team, but still that was a not just also in America.

So it was a very intensive process I don't want to give you details on how that was from a competitive side, but.

We are very proud and very happy that we could secure this partnership and this long term deal with the U S with the MBA, which was for US a key target for this year.

And we achieved it.

Got it thanks for taking the questions.

Yeah.

Thank you at this time, we've reached the end of the question and answer session I will now turn the call over to Carsten for closing remarks.

Well, thank you very much and thank you all for your participation.

We are very pleased with this quarter's performance and we are excited for the opportunities ahead.

We have a high performing company and we will continue to focus on maximizing shareholder value.

I'd like to thank many of spot rate our colleagues working around the world for.

Their exceptional efforts.

And our customers and partners with whom we work seamlessly to deliver value to the market. Thank you for joining us on the call today and I wish you all a great day. Thank you very much.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.

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