Q2 2022 Sportradar Group AG Earnings Call

here and then we can drive the growth in there but it's a question of profitability. So you will see in this segment not the growth like in the rest of the world betting but pretty stable and satisfying. And then we are coming to the US where we see a strong growth trend, a CAGR of I think 59% for the last four years which I gave you is demonstrating this. We're not seeing this slowing down, we see that more states are coming online with betting and we see also

a lot of requests from media companies that we can help sell here. So that's the mix, strong growth driver, a strong growing market in the United States. Now 15% of our total revenue increasing strongly, very, very stable, high-growth betting business, main driver, the trading services and the platform services from a growth perspective and then very stable audiovisual growing business.

Thank you. And then as a follow-up, it was a volatile FX period, probably more volatile I've seen in any number of years over the second quarter and obviously it had an impact on just cash and accounting a little bit, but can you just outline how this impacts SportRadar's business, broadly speaking? Are there anomalies or things that happen or are most costs in market relative to currency? I mean it doesn't look like it had a material drag, at least as reported in euros.

as it relates to reported results, but just how does it play through the financials and the consumer side for SportRadar?

Alex, a perfect question for the CFO .

Yeah, so you're right. So obviously we disclose the cash, right? We are a euro company, so this is all gained to us as the dollar continues to strengthen. And obviously we disclose the cash and that's very clear that our US dollar cash re-value is now significantly higher. But in terms of dollar cash, in terms of euros, in terms of the actual business, the impact on revenue is really immaterial.

a couple of million at best, and there is zero impact on the EBITDA because of the balance in our revenue and costs in US dollars as a translate. So at this point, there is no impact really of any, in terms of the P&L, other than the cash valuation at all. And I guess as we become bigger and bigger in the US, in terms of revenue over time, the impact would become bigger if the volatility continues. But at this point, and certainly towards the end.

for the balance of the year, I don't see any material impact of effects on the revenue or on the EBITDA.

Thank you very much.

Thank you and our last question comes from David Katz with Jefferies. Your line

Hi, this is Cassandra asking on behalf of data offers. Thank you for taking my questions. Carson, could you expand a little bit more on the US life bidding today? Can you tell us what is the penetration today and where do you see it longer term?

Yes, so that's the same, and hello, Cassandra, that's the same what I said in one of the last quarterlies. We see that there are some sports are picking up better on life. Basketball is such a sample, very difficult to give you here at the moment the current ballpark. It's from operator to operator a bit different, but let's say that ends in a ballpark 30 to 35 percent, that's a proportion from all bats' risk.

So still, it's a minority. There are sports which are a little bit less for live betting. NASCAR might be such a sample or NFL. But it all shows in two directions. Everything is growing strongly in the live betting segment. It's simply much more fun and much more enjoyable if you watch the event and if you can play the bet. You are much more connected and you have this emotional element and that's what is driving the game.

All of us, we are sport fans and that's emotional and betting is much more emotional if you do it in play. In our core markets, in Europe but also in Africa, in Latin America and in Asia, there is a very, very clear trend into live betting. In the saturated markets we see 70-80% of all the accepted bets.

our life and we expect the US to have the same.

It takes time and it's only a question, what do we think, how long will it take that the US has adapted to the worldwide level of live betting, which is in the range of 70 to 80 percent of all bets are live. But undoubtedly this trend has started and you can't reverse it, which is good and which is very rational because both is emotional and during that emotion if you place a bet that's so much more enjoyable. So I think that's a good example.

Great, thank you very much. And if I may follow up.

Single game or same game parley has become pretty popular in US and whether the companies today offering products or pricing on parleys like that or will look into developing this kind of offering.

Yeah, well, this is only a part of the betting engine and with our platform services we are offering this. Even without trading services, we are offering calculators for parlays and for integrating bonus or buyback programs. If you have a parlay and if two of your picks are already winning and you have a cert, you can buyback the bet and there are algorithms to do this and we have those.

So I think it's a very normal trend. So you want to go with a one dollar bet and you want to win a thousand dollars with a one dollar. So combine a parlay with high multiples and you're getting there. So that's something which we see in many places, very popular. And I'm happy to see that this is also picking up in the US that moves away from the traditional Vegas punter with ten thousand dollars in his pocket.

going on only one specific over-under into more the entertainment factor, which we are promoting a lot.

Got it. Thank you very much.

Thank you.

Thank you. And there's no other questions in the queue. I'd like to turn the call back to Karshan Kaur for closing remarks.

So,

Thanks to everyone for joining the call today. I want to reiterate our ability to meet and exceed the revenue expectation, despite the ongoing challenges we face from the Russian-Ukraine conflict and the general economic unease.

With our cash flow and the capital in a stronger position today, we will continue to look to opportunities for growth

and eye towards smaller, accretive acquisitions.

and we will relentlessly drive leverage into our business model, especially in the US. I want to personally thank our SportRider team for their persistent commitment day in, day out to serve our customers and build our businesses.

I couldn't be prouder of what we have built over the past 20 years.

I remain incredibly confident in our perspectives for the future.

Thank you for joining the call.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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