Q3 2022 Sportradar Group AG Earnings Call
Okay.
Good day and welcome to the sport read our third quarter 2022, our earnings conference call. At this time, all participants are in listen only mode.
After the Speakers' presentation there'll be a question answer session and instructions will be given at that time.
As a reminder, this call maybe recorded.
I'd like to turn the call over to Kristen Armacost manager of Investor Relations you may begin.
Good morning, everyone and thank you for joining us for Bart radar earnings call for the third quarter 2022.
Before we begin I would like to point out that the slides we will reference during this presentation can be accessed via the webcast on our website at investor That's what radar dotcom.
Slides will be posted on our website at the conclusion of this call a replay of today's call will be available on our website at.
After our prepared remarks, we will open up the call to questions from investors.
At the time, please limit yourself to one question plus one follow up.
Please note that some of the information you'll hear during our discussion today will consist of forward looking statements.
Including without limitation, those regarding revenue and future business outlook.
The statements involve risks and uncertainties that may cause actual results.
Or trends could differ materially from our forecast.
For more information please refer to the risk factors discussed in our annual report on form 20-F.
The form 6K furnished with the F. D C today, along with the associated earnings release.
We assume no obligation to update any forward looking statements or information, which speak as of their respective date.
Also during today's call, we won't be basketball ifr off and not I F RF financial measured.
And do you smoke disclosures regarding these non I F. R. S modular, including a reconciliation of I F. R F.
I F. RF measure are included in the earnings release supplemental slides and our filings with the SEC each of which is posted to our Investor Relations website.
Joining me on the call today are Carsten call, Chief Executive Officer, and art harmless interim financial interim Chief Financial Officer.
And now I'd like to turn the call over to Carsten Carl.
Thank you Christine and thank you all for joining us today and welcome to <unk> Q3 earnings call.
We are pleased to report a very strong quarter with strong revenue growth as well as an expansion of profitability in cash conversion showcasing our sustainability scale and operating leverage of our business model.
Now touching on the operational goals. We are proud of these results and we remain focused on our core operational objectives.
Funding our high margin rest of the world business based on our upsell and cross sell strategy to move customers up the value chain.
Leveraging our significant investment into people technology and leak relationships in the U S market that is to say, we expect to grow our revenue base and the underlying market growth, which has further accelerated by the growth in.
In play betting.
Number three drive efficiency.
Across the organization by leveraging our global footprint streamlining processes and optimizing our resources.
And last one continue to make investments into strengthening our market position and expanding our addressable market.
The execution against these objectives has resulted in solid operational performance and financial results through the first nine months of this year's was exceeded our expectations.
For our third quarter, we delivered strong year over year revenue growth of 31%.
We delivered an adjusted EBITA margin of 20% this quarter.
<unk> 15 in the third quarter last year.
<unk> in the second quarter 2020 to 400 basis percentage points uplift.
Let me remind you that these strong results have been achieved despite significant adverse market conditions and some of the reasons regions that we serve as well as the potential of global recessions.
We further managed to generate strong operational cash flow with a conversion rate of 93% why does cash conversion has been favorably impacted by foreign exchange rates. This quarter, we continue to generate cash to invest into organic and organic growth opportunities. This room.
One of our business priorities and has enabled us to prepay $200 million of all bank debt this quarter.
Revenue growth was predominantly driven by rest of the world bearing business, where we continue to expand our business with existing customers. This is reflected in a 117% net retention rate this quarter compared to the same period last year strongly driven by our ability to move customers up the value.
Sure.
Managed patting service as our highest value service in the data value chain.
84% compared to last year attributed to cross selling new products into existing customer base.
Our advertising business, which is relatively new product in our portfolio grew by 62% versus last year.
During the quarter, our managed trading service generated.
Annualized starring turnover of $19 billion run rate to put this into perspective.
This compares to approximately.
11 billion British pounds in stakes that fans you will accept it in the first six months is 2022.
The second strong growth contributor.
S business, which reached profitability in the third quarter 2022 for the first time ever.
Our CFO will go into more details, but I'm very excited to report the first positive adjusted EBITA margin of 11% for our U S business segment in this quarter.
First time since we became a public company.
Based on the continuous growth in the U S betting the number of states, who have regulated setting as well as the good adoption of MK betting we see that our early investment into people product technology and sport rights are paying off.
The positive adjusted EBITDA results further demonstrates that sport radar business model of generating profits and growing markets because of operational leverage and increasing share of employer pattern also works very well for the U S marketplace.
Revenue in our U S segment grew by 61% compared to last year's quarter.
This remains largely a result of the growth of the underlying putting volume.
We are participating in the MCR of our customers.
When we look at the rest of the World business, we see the biggest growth driver for sport radar revenue is in play betting.
More than 90% of our rest of the world revenues drill.
Given by in place we believe we can see similar success in the U S with two segments.
The U S market is still in a very early inning after in play betting.
The real time shifts of GTR between 15, and 35% depending on the sport compared to an employee share of 80% in the European markets with the development of life saving products for the U S sports and growing customer acceptance, we strongly believe that the in place that input.
Become the biggest future growth driver for the U S betting market and sport rate us revenues in the United States.
Continuing with the U S. I want to highlight a few of our successes and recent developments.
Last month, we signed a landmark deal with our partners at <unk>.
An early extension of our existing relationships as to <unk> data and not supplier throughout the 20 32031 NBA season.
So really extension of this is a testimony of how long term big deals provide us with the ability to expand the relationship with our customers and move them from a pure content distributor to an embedded technology provider other.
Under the new contract, we will brook closer together essential to develop products leveraging the MBA state of the art player tracking technology to create new opportunities for our same game policies and in play pattern highlighting.
Spot rate strength in live betting bigger.
We will also provide our live channel trading and content distribution platform, providing video streaming eight seconds faster than a television broadcast.
This broadening our relationship with spend you will fully aligns with our U S strategy to leverage our long term relationships to support our key U S customers with their product development and creating exciting user experiences.
And other innovative relationship we announced is tennis data innovation speaks ponds to distribution of ADP tour official data to bedding operators. The partnership is creating new secondary feed directly from the umpire here to provide the fastest most reliable and most accurate data.
Play betting markets and enhance fan experience.
We also announced our largest rest of the world paid social advertising deal with Kindred a large international online gaming operator.
<unk> will use portrayed as AI and machine learning technology to engage more efficiently with sports fans in Paris across the major platforms.
<unk> broken into growth.
Last we are pleased to mention that we have one.
American gambling award for data supplier of the year. This award is presented by gambling dotcom and.
And recognizes excellence and data service delivery.
Statements to the service, we provide to our customers.
And the successful here, we had so far in 2022.
American Camping awards are highly competitive and we are excited to receive our exclusive coordinator trophy.
On the previous earnings call, we mentioned the reorganization of our management team.
From January 2023 onwards.
Radar globally organized content creation and acquisition product development and commercial execution, while retaining a dedicated go to market approach for the United States.
This new structure will lead to a streamlined organization, allowing a more efficient process faster decision, making and the ability to serve our global customers even more efficiently.
Finally, after having spent the better part of October meeting with investors and all of this I want to address a key concern many of you.
The possibility.
Taught us the possibility of a recession and the impact on spot radar.
To address that I would like to spend a few minutes on spot rate. This growth model, which is based on four levers number one sport rate ourselves a global betting market that is expected to grow 11% annually throughout 2027.
Historically, the global battery markets have grown throughout or crisis with the only exception being in 2020 due to the pandemic a large number of sports competition, who have suspended.
Second spot rate up consistently managed to grow almost three times faster than the underlying market due to our ability to up and cross sell customers moving them higher up the value chain and expanding into new regulated markets.
Our model, enabling us to grow 6% in 2020, despite the underlying battery market.
<unk> by around about 11%.
Number three based on the growing revenues.
We can expand our margins by leveraging significant scale in our business model with a streamlined organization for global content acquisition global product development, and global technology and infrastructure and lastly.
Our profitability.
<unk> generates significant growing cash flow that we invest into our future expanding our product portfolio geographical reach and increasing our addressable market.
We have built this model over the last 20 years and why the question about impacting of a potential recession looms and investor minds. It is also on top of the mind of spot rate as management team.
I want to leave you with some of the history as you think about our Q4 and beyond despite various economic recessions in.
In the past, including the pandemic events since inspection. This company's sport radar has always had a positive growth.
Year over year further despite the turbulent market and economic conditions, we exceed our expectations for the first three quarters of this year.
Because of this foundation and I'll continue with innovation as a market leader. We believe there are many reasons to be optimistic about our future for continued profitable growth with that I would like to turn the call over to Rick <unk>, our interim CFO , what he has been working very.
Closely with me at spot radar over the last 10 years, where he was previously responsible for corporate development and M&A and was instrumental in driving all aspects of our IPO last September .
Has a deep understanding of the company and its financials and I have no doubt that he will lead the financial organization to achieve greater success in the months to come over to you <unk>.
Thanks.
For the kind words I'm very excited to lead the finance team and partner with our management team to continue to deliver strong results I look forward to talking to our investors and discussing the strong investment thesis first board radar.
We now provide you further details on the strong results for this quarter.
Revenues in the third quarter increased 31% to 179 million versus the third quarter of 2021.
<unk> was strong across all of our segments. Once again the majority of growth came from our rest of world betting business, which contributed $22 million of our growth.
U S grew 61% compared to last year.
Reported and adjusted EBITDA of 37 million for the third quarter.
Up 69% year over year, resulting in an adjusted EBITDA margin of 20% compared to 15% in Q3 of last year.
The third quarter is typically a spot rate our strongest quarter with regards to profitability as the major U S. Leaks on season break and sports rights costs are only amortized over the months the league's player.
Our leverage.
Cash conversion was 93% and the Unlevered cash conversion was 104% both positively impacted by foreign exchange rates, even after the prepayment of $200 million of our bank debt, we still have more than half a billion of cash and cash equivalents on our balance sheet.
Now looking at our segment revenues.
Our rest of the world betting revenue grew 28% in the quarter to 101 million, representing 56% of our total revenue.
Growth was primarily driven by an uptick in our higher value add offerings, including managed betting services or MBS and life services.
Specifically MBS revenue grew 84% year over year to $38 million, our life business grew 12% due to upselling content to existing clients.
Rest of the world betting adjusted EBITDA increased 8% to $48 million.
The associated adjusted EBITDA margin declined to 48% versus 57% in the prior periods as a result of inorganic investments into artificial intelligence capabilities.
As well as temporary savings and sports rights and scouting costs in the prior year due to the COVID-19 pandemic.
The rest of the World segment grew 14% year over year to 33 million.
This growth was largely driven by cross selling audiovisual content to existing data customers and expanding the portfolio with existing customers.
Rest of the World <unk>, adjusted EBITDA increased 32% to $13 million.
Segment, adjusted EBITDA margin increased to $38 million from $33 million, mainly due to as a result of revenue growth.
Now turning over to the United States.
The U S segment continues to be our highest growth segments and reached a major milestone by turning profitable on a quarterly basis. This quarter. The first time since the IPO.
Revenue growth, 61% year over year to $32 million with strength across the board.
Betting and gaming revenues grew 144% year over year due to growth of the underlying Bakken betting markets and good signs of adaption of in play by U S customers.
S revenues doubled year over year, albeit from a small base.
Also saw strong growth in our audiovisual product and in our media solutions.
As highlighted before the U S business generated a profit this quarter underscoring the scalability of our business model and the ability to convert our UFC contracts into profitable business.
Third quarter U S. Adjusted EBITDA was a positive $3 million compared to a loss of almost 7 million last year.
U S. Adjusted EBITDA margin was 11% versus the negative margin of 34% last year.
At this stage I would like to also comment on spot rate of foreign exchange exposure, which mainly results from converting our U S. Dollar denominated U S segment into euros, our reporting currency.
In the third quarter spot rate of group generated U S dollar denominated revenues of $39 million.
Against U S dollar denominated costs of $44 million, resulting into an almost perfect natural hedge.
Now turning to costs.
<unk> cost for the quarter increased by $17 million to $68 million in line with our expectations.
When normalizing the qualified personnel cost for acquisitions into capabilities for our managed betting services in particular bikes and soft.
The organic growth rate of personnel costs has been 27% year over year.
Purchased services licenses in the third quarter of 2022 increased by $18 million to $48 million compared with the third quarter of 2021 as a result of increased cost of content creation and processing as well as content costs for our advertising business.
Other operating costs decreased by 19% or $5 million compared to last year's quarter due to high costs related to support rate us IPO in September of last year.
Lastly, sports rights costs increased by 6 million to $35 million in the third quarter of 2022.
Growth was driven by new deals with the ATP <unk> and the International Cricket Council as well as a 10 year extension of the NHL contract.
<unk> costs as a percentage of revenue decreased to 19% versus 21% last year.
In the third quarter spot rates have generated strong adjusted free cash flow of $34 million up from $33 million last year.
Our unlevered cash flow conversion was 104% down from 164, 61% last year.
Our adjusted cash flow conversion has been 93% in the quarter compared to 158% in the same period.
Period last year.
Cash flow in Q3, 2021 was extraordinarily high due to high expenses related to the IPO in September of last year that were only paid in Q4 last year.
Cash flow in the third quarter was positively affected by favorable FX gains as the euro continued to weaken during the quarter.
Cash flow has increasingly become a focus for our company and we started several internal projects to increase the cash conversion in particular by managing our working capital more proactively by reducing the days sales outstanding for our customers.
Furthermore, we've also reacted to a rising interest rate levels.
After having repaid half of our term loan in the third quarter as Scott mentioned.
Plan to prepay the remaining portion of the term loan in the fourth quarter.
As a result of our strong cash conversion, we retain a strong liquidity.
In the third quarter, we have increased the revolving credit facility by $110 million to now 220 million.
Together with our current cash position of $512 million.
512 million this leaves us with a total liquidity of $732 million.
Even after the planned prepayment of the remaining $220 million of term loan we would still be in a strong position to support our operational business with organic investments and pursue acquisitions to further accelerate our profitable growth and expand our addressable markets.
Finally, let me give you an update on our guidance for the full year 2022.
Based on the strong performance in the third quarter, partially influenced by the mentioned seasonality effects in sports rights costs, we are raising our expected revenue outlook to a range of $718 million to $723 million.
At 27% to 29% growth rate.
Coming from a prior range of $695 million to $750 million.
Further we are raising the bottom end of our adjusted EBITDA guidance and also narrow the overall range to a new range of $124 million to 127 million, representing a year on year increase of between 20% to 25% from our prior range of 123 million to 100.
$33 million.
With that I will turn the call back to Carsten for some closing remarks.
Thanks Ali.
I want to remind everyone of our.
All key priorities, we continue to focus on growing our core cutting products and further expanding our market position in the U S. While improving our profitability and cash generation due to the operating leverage in our business model.
We remain prudent stewards of managing your capital balancing risks and opportunities all in the name of long term shareholder value creation.
I'll turn it over to the operator for Q&A.
If you would like to ask a question. Please press star one one.
Our first question comes from Ryan Cigna with Craig Hallum. Your line is open.
Hey, Carson, congrats that really really nice job on the quarter guys.
Two for US here, one on strategy and maybe one more specifically on guidance for current operations.
So first U S positive EBITDA really nice to see that inflection a lot quicker than we were anticipating here, but is that sustainable going forward or how much of that you said differently. As a result kind of a sports calendar within Q3 on your official rights costs.
Well.
I might take this question Ryan nice to hear you.
No we see going forward.
Profitability in the U S segment.
And it's mainly driven whereas what we can convert from pre match into life, which is the interesting piece here. So we have between depending what sport. It is 15% to 35% at the moment proportion of life setting.
At the NFL the weakest.
The NHL as you know the strongest this numbers, which we get from our clients and every margin points, which become growth now here is worse for spot rate at the moment of $1.2 million round about and this is revenues.
Which comes.
Practically without any additional costs. So this trend is giving us great confidence that we are continuing to go down the road, which you see now and you saw that quarter by quarter in the last four quarters. We continued to reduce the losses now reached first time ever profitability.
So because of that trend we are very optimistic of course.
Also optimistic by seeing our media business, which is growing strongly in the U S. So that gives us confidence in this outlook.
That's really great to hear.
Second follow up question here, just given the recent litigation settlement with genius in UK football.
Really defending very unfortunate official rates.
That change your operational focus leaks, where Spartan has official rates and by far the largest portfolio of those versus.
Open sourcing data for non partner leaks.
Hum.
Well I think.
On the litigation piece.
You saw the announcement and I.
It needs to dive deeper into this and get to the nature of your question no. It doesn't change this was a settlement, which we reached.
With <unk> and this is extremely important for us we have a sublicense, we can access the data and we will incorporate this data into the suite of our products and financially. It means that we pay a license fee, but we are able to sell the football data co content to our customers and generate additional.
Revenues with reported positive EBITDA contribution.
Contribution this was not possible before because we have no access to this data.
Helpful. Thanks, guys.
Our next question comes from David Karnofsky with J P. Morgan Your line is open.
Alright, Thank you everyone for Carsten.
Carsten I think last quarter you spoke to.
Value based pricing model with some of your bigger operators I'm wondering if now maybe you could provide some details around this with anything here.
Triton Defendable and then you.
You did release a preliminary outlook for 2023, just wanted to see if you could walk through some of the drivers at a high level and then is there anything you can say on free cash flow conversion outlook. Thanks.
So the value based pricing is of course in connection with our reorganization and the management as reported we have now.
<unk> started that transformation process that we look from a sales perspective on a global basis, we cluster our clients in a different way like we did it before we pay more attention to opex clients and are we trying to do more for the smaller clients to uplift them and the value based pricing.
<unk> is one of the modules for this there are many more things, which we're considering here mbo ready seeing the fruits of this transformation process in the quarterly numbers with this I hand over to Uli.
Yes, thanks constantly David good to hear from you.
So on the 2023 guidance.
On the revenue side, we see continued strong momentum in our two Q2 key growth segments, which together account for almost 75% of our growth.
The first one being the rest of the fluids betting business, where we grow primarily as a result of moving customers up the data value chain.
Also in this quarter and moving customers to homage betting services and the second one is the growth in the U S betting business driven by.
Three factors first of all our growth based on our customer call. Since we are participating in their revenues.
Currently the increased adoption of in play betting, where we simply a spot rate I have a bigger revenue opportunity compared to pre match and thirdly.
As a result of the <unk>.
Expansion of our customer relationships.
We've just seen with with Fabulous, therefore, I'm very confident about our revenue growth and with regards to the margin expansion.
We've basically seen in the third quarter the operational leverage in our business, we have grown our revenues by 31% sports rights costs only grew by 20% personnel costs only grew by 27% when normalizing for M&A effects and our operational expenses, even declines and taking all these.
<unk> takes us into considerations and despite adverse market conditions, we feel very strongly and very positive about the business prospects for the next year.
And are confident to be able to continue our path to grow revenues, while expanding our profitability and our cash flow and in parallel.
Okay.
Our next question comes from David Katz with Jefferies. Your line is open.
Good morning, everyone.
This may be another version of.
Some of what you discussed but I'm just.
Turning to guidance.
With the revenue amount of growth as compared to the EBITDA.
Can you just discuss a little further what the.
<unk> to flow through as well in that guidance.
Why there isn't just a bit more.
Of the revenue, reaching the bottom line.
What are you <unk> that is a question for the CFO .
Yes, no happy happy to answer them I think we discussed this already on previous calls so we have some adverse market conditions that we have to face and as a result.
So had to change somehow.
Our product mix and some of the highest margin revenue that we were expecting coming from some of the markets that we can serve at the moment and not simply not hitting our <unk>.
Our EBITDA line and.
We grow faster than we projected in our advertising business and that is a lower margin business and that's the reason why we increased our <unk>.
Our revenue guidance and.
Despite the adverse market conditions.
Only increase the the lower margin of our EBITDA guidance.
Perfect. Thank you.
Our next question comes from Michael Graham with Canaccord. Your line is open.
Thank you and congrats on the U S profitability just could you maybe at a high level talk about now.
Now that you expect the U S to be profitable just the pace of.
The margin expansion that we should expect to see there at high level.
And then I thought it was interesting you mentioned acquisitions in your prepared remarks, so could you just maybe.
Talk broadly about what types of.
Assets, you think the business might need.
Hum.
Yes, Michael happy to take on these questions. So.
Looking now to the U S.
I highlight that the main thing is really for us focusing on whatever it is real time real time is generating the highest value for sport way to in all the business lines real time in this specific case means life bedding.
So whatever we can do here to create.
Innovative services, where we stimulate live betting is what we do and we do this very consistent with our league partners, we're doing bookshops with our clients.
And with the league partners to figure out what kind of product can help best to stimulate this it simply.
There was a big trend there and yeah that mentioned several times, we see that the U S is following a pause, but we learnt in all other markets in the world So that.
That is giving us your confidence now looking to those investments its things like how can we improve with <unk>.
<unk> new pricing models.
That we trade.
Little bit better and that makes for us a big big difference. So if we are hiring.
Profitability of our managed trading services only versus half a percentage point that means for us bottom line 10 times more.
Cash, which we get with this considering that is 5% to 6% profitability on a single pad, which you have there. So these are exciting things of course, there is a lot of things ongoing in visualization, which also leading into this trend how can your original lies to much better to get more fan engagement more fan engagement.
Leading into life bedding and the third one which we see there is of course a state by state opening we have not expect that the California. So opening up our models are saying 2024. So there is still a good chance that our models are right with California also opening up for sports betting but.
We see that this strategy is state by state opening is going very very well hand in hand, with our predictions and of course, that's beneficial for us.
Okay. Thank you.
Our next question.
It comes from Shaun Kelly with Bank of America. Your line is open.
Hi, everyone. Thank you for taking my question.
I just wanted to ask about the sort of cadence for the rest of world margins. So any <unk>.
Called out some of the adverse market conditions and I think in some of the some of the drivers for the margin. This quarter can you just help us think going forward as we start to lap I think probably particularly issues in the Ukraine should should in 'twenty three you should rest of world growth.
Growth rates and margins start to look a little start.
You start to look a little bit more in line with revenue growth as we kind of move past some of that headwind kind of these onetime headwinds that you're probably experiencing right now is that the right way to think about it.
What are you can you go on this.
A number question on the projections.
Yes, I'll take place for that.
Happy to do that as Sean and very nice meeting you.
So the <unk>.
The current numbers for 2022, obviously completely reflect all address market conditions, and therefore going forward, we do not expect that that's anything additional.
Hitting our margin and therefore I would agree that going forward you will see.
Revenues grow in line with our.
Adjusted EBITDA grew in line with our revenue growth even.
We should actually be able to see also some operational leverage in our rest of world betting business.
Okay, great. Thank you understood and then maybe just.
Can you just talk maybe big picture about sort of the longer term margin outlook in the U S and in Carson you've been very clear on adoption of in play being particularly important to that but is there any kind of reason or change in your thinking around sort of the progress of U S margins eventually approaching sort of your international levels. What are some of the puts and takes there.
I'm, particularly thinking about the NBA contract coming on in 'twenty, three and beyond and what that could mean for rights costs over here as well.
That's more mid to long term projects, and then always a bit tricky to give shaun but look you'll see the strong growth of 144% in the pet and CT business in the U S at 110% audiovisual, 87%, there's still a lot of runway.
If we get more audiovisual content.
Of course that will boost our products and we are actively speaking here with <unk>.
<unk> about this.
Looking now from a growth perspective, we have 10 year deals with two of the big four with the MBA anti NHL and the challenge here is how can we create value for our clients, but not blindly upselling data.
How can be embed ourselves into the value chain into the products that we generate this revenue for our clients we are super confident.
It delivered this and defend your team is showing you in which direction. This is going so I think we did clever decisions by having long term deals with two of the big four properties and we are working very closely with MLP.
On the same direction. So it's about how can you create a product which is generating profitability for the clients.
And not only client the upselling, the data, which they have to integrate them by themselves. So it's a kind of <unk>.
Combined actually between us the leaks and preparing operators too and the ambition there always is to create this value.
Yes, there was a there was a price uplift Christy NBA contract I recall, how much critics I got when I announced this in September last year that this is a landmark deal for us.
And now we demonstrate that we get the biggest operator in the United States on a 10 year commitment for this deal.
Which comes with all this creation of new services.
So we're pretty confident that this will scale and followed the footprint, which we have in the rest of the world business. We see no reason why that should not be the case.
Thank you very much.
Our next question comes from Bernie Mcternan with Needham <unk> Company. Your line is open.
Great. Thank you for taking the questions maybe to start Carson you just mentioned the fan dual deal would just love more color on the deal, especially there was some mention of supplementary betting services that are included.
I was wondering if that include maybe a minimum commitment on the ads product and then also I think you mentioned that there were U S. Avi writes for the MBA as well. So just wondering if theres any color in terms of what games you would have access to if thats true.
Sure.
Yes.
Can you repeat the second question. Please.
And of course, if there is I believe you said on this call that there was a REIT or streaming rights associated with the NBA deal.
So interested in just what what games you would have access to.
Okay, No AVN streaming rights.
Our associated for for the U S piece of the deal.
Internationally, we have the MBA streaming rights and presale interest to the clients not only to <unk>. So there's nothing specific for fans.
There are four I think remarkable points first it's the largest customer.
We manage to get the largest.
Sports book into 10 years relationship on this property second we are uplifting them undervalue chain of our products. So we are not only to prefer to date to supplier. We are integrating into the products of <unk> with various place.
Give you the details on this.
Third big piece is tracking.
The life channel. So first time ever we can use tracking data to create attractive player proposition bets, hoping and helping the clients that they can have more policies and running which is consistent with our strategy.
Pre match into life and number four.
It's a signal for the whole market that this is the direction you need to take.
And we see already a lot of pick up on this one.
Me answer the <unk> question on which you asked about <unk>.
<unk> had support radar.
We're not in favor to force our clients into a direction that there must be a minimum guarantee for a channel which is complimentary, but not core sports betting. So we we are performing and we are gaining market shares, which you'll see into the ads performance of 110% uplift.
Quarter by quarter.
But we are not forcing declines with a minimum guarantee that they have to go with add services with us. So we want to demonstrate this product strengths the bookings and proved this all the time instead of having a huge application for the client.
That's great and maybe just to follow up on that last point on the significant growth that youre seeing in the ads product is that.
Adding more customers is that more spend per customer would just love to get some more insight in terms of what's driving the growth.
The main thing what is driving the growth years of course.
The programmatic advertising and more sensitivity from the customers on spend in channels like broadcast that's by the way something which we see also in the rest of the world here, where the growth is a 46%.
Yeah, we reported a big new clients, which is which is now joining us that's kindred.
One of the big worldwide operators multinational operators and they are going now on our paid social and which we have with Facebook and Instagram and Thats an extension of that services. So we see growth with existing clients and the numbers I gave you MPC new clients coming in.
Great. Thanks for taking the questions Carson.
No problem.
Okay.
Our next question comes from Jason Bazinet with Citi. Your line is open.
I was just going back.
Looking at my notes when before you guys went public and I don't think the U S was supposed to turn profitable for I don't think you ever gave a time, but it was certainly sort of beyond 'twenty three.
It seems like the.
Okay.
Okay.
There are no further questions I'd like to turn the call back over to Carsten for closing remarks.
Yeah. Thanks, everyone for joining the call today in closing I want to reiterate our ability to meet and exceed our revenues and profit expectations. Despite the ongoing economic challenges. We face we will continue to expand our top line with a focus on growing our batting rest of.
The growth business as well as the U S business in parallel.
Relentlessly drive leverage into our business model to grow our bottom line and cash flow the first quarter with a positive EBITDA contribution from the U S is a clear indication that our business model also groups in the United States market and I want to personally thank our spa.
Radar team for their persistent commitment day in day out to serve our customers and league partners by continuing to build our business.
I couldnt be more proud of what we have achieved so far and remain incredibly confident in our prospects for the future.
Thank you for joining the call.
Ladies and gentlemen, this concludes the program and you may now disconnect everyone have a great day.
Yeah.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Okay.