Q1 2024 Sportradar Group AG Earnings Call
Operator: Good day, and welcome to the Sportradar First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1 1. As a reminder, this call may be recorded. I would like to turn the call over to Jim Bombassei, Head of Investor Relations. Please go ahead.
Good day and welcome to the sport read our first quarter 2024 earnings conference call. At this time, all participants are in a listen only mode.
Speaker Change: After the Speakers' presentation there'll be a question and answer session to ask a question. Please press star one one.
As a reminder, this call maybe recorded.
Speaker Change: I'd like to turn the call over to Jim Mom Baby <unk> head of Investor Relations. Please go ahead.
Jim Bombassei: Thank you, operator. Hello, everyone.
Speaker Change: Thank you operator, Hello, everyone and thank you for joining us for sport radars earnings call for the first quarter of 2024.
Jim Bombassei: And thank you for joining us for Sportradar's earnings call for the first quarter of 2024. Please note that the slides we will reference during this presentation can be accessed via the webcast on our website at investors.sportradar.com and will be posted on our website at the conclusion of this call. A replay of today's call will also be available on our website. After our prepared remarks, we will open the call to questions from analysts and investors. In the interest of time, please limit yourself to one question and one follow-up.
Speaker Change: Please note that the slides we will reference during this presentation can be accessed via the webcast on our website at investors that sport radar dot com and will be posted on our website at the conclusion of this call.
Speaker Change: A replay of today's call will also be available on our website.
Speaker Change: After our prepared remarks, we will open the call to questions from analysts and investors.
Speaker Change: In the interest of time, please limit yourself to one question and one follow up.
Jim Bombassei: Please note that some of the information you will hear during our discussion today will consist of forward-looking statements, including, without limitation, those regarding revenue and future business outlook. These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast. For more information, please refer to the risk factors discussed in our annual report on Form 20-F and Form 6-K filed today with the SEC, along with the associated earnings relief.
Speaker Change: 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. These.
Speaker Change: These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast.
Speaker Change: For more information please refer to the risk factors discussed in our annual report on form 20-F, and form 6K filed today with the SEC.
Speaker Change: Along with the associated earnings release.
Jim Bombassei: We assume no obligation to update any forward-looking statements or information which speak as of their respective dates. Also, during today's call, we will present both IFRS and non-IFRS financial measures. Additional disclosures regarding these non-IFRS measures, including a reconciliation of IFRS to non-IFRS measures, are included in the earnings relief supplemental slides and our filings with the SEC, each of which is posted to our investor relations website. Joining me today are Carsten Koerl, our Chief Executive Officer, and Gerard Griffin, our Chief Financial Officer. Now, I'll turn the call over to Carsten.
Speaker Change: We assume no obligation to update any forward looking statements or information, which speaks as of their respective dates.
Also during today's call, we will present, both <unk> and non <unk> financial measures additional disclosures regarding these non <unk> measures, including a reconciliation of <unk> to non <unk> measures are included in the earnings release supplemental slides and our filings with the SEC each of which is posted to our Investor Relations website.
Speaker Change: <unk>.
Speaker Change: Joining me today are Carsten curl, our Chief Executive Officer, and Joe Griffin, Chief Financial Officer, now I will turn the call over to Carsten.
Carsten Koerl: Good morning and good afternoon to everyone. We are excited to be speaking to you today about the momentum we are seeing across our business and our strong start to the year. There are a number of key takeaways I want to highlight from the quarter and for the year ahead. First, we delivered strong top-line growth with revenues up 28% as we saw strengths across our business and benefited from the uptake of our MBA and ATP content and solutions, and the strong execution of our team. Thank you.
Carsten Koerl: Good morning, and good afternoon to everyone. We are excited to be speaking to you today about the momentum we are seeing across our business and our strong start to the year.
Carsten Koerl: A number of key takeaways I want to highlight from the quarter.
Carsten Koerl: For the year ahead.
Carsten Koerl: We delivered strong top line growth with revenues up 28% as we saw strength across our business.
Carsten Koerl: <unk> benefited from the uptake of our MBA and ATP competitive solutions and.
Carsten Koerl: Strong execution of our team.
Carsten Koerl: We continue to be laser focused on driving efficiencies in our organization and delivered an 18% adjusted EVTA margin, which was ahead of our estimates. We are raising our guidance, given this strong performance and our confidence in the year ahead. We now expect to grow full-year revenue in adjusted DVTR by at least 21%. We recently named key additions to our leadership, naming a new CFO and achieving technology and AI, and Phil. We are commencing our share repurchase program during the upcoming trading window.
Carsten Koerl: Second.
We continue to be laser focused on driving efficiencies in our organization and delivered 18% adjusted EBITDA margin, which were.
Carsten Koerl: Our estimation.
Carsten Koerl: Sure.
Carsten Koerl: We are raising our guidance, giving this strong performance and our confidence in the year ahead right.
Carsten Koerl: We now expect to grow full year revenue and adjusted EBITDA.
Carsten Koerl: At least 21%.
Carsten Koerl: For us.
Carsten Koerl: We recently named key.
Carsten Koerl: Additions to our leadership team naming a new CFO and achieve technology and AI officer.
Carsten Koerl: And fifth.
Carsten Koerl: We are commenting on share repurchase program.
Carsten Koerl: And upcoming trading windows.
Carsten Koerl: This action is supported by our confidence in our outlook and the strong value we see in our work. The success we are seeing is underpinned by our competitive advantage. Operator is a global technology leader with a differentiated and commanding position in the sports ecosystem.
Carsten Koerl: Action is supported by a low confidence.
Carsten Koerl: Our outlook and strong value, we see in our stock.
Carsten Koerl: Perfect sense, we are seeing is underpinned by our competitive advantages.
Speaker Change: <unk> is a global technology leader with a differentiated and commanding position in the sports ecosystem.
Carsten Koerl: No other company matches our scale, reach, and resources, bringing together over 800 payment operators, 400 sports leagues, and 900 media partners, covering nearly a million sports matches every year. The breadth and depth of our content, data, and leading technology provides us with unmatched insights into the diverse portfolio of sports and betters preferences, enabling us to create innovative solutions for our clients and engaging and personalized experiences for sports fans worldwide. Our confidence in the year ahead is backed by our consistent track record.
Speaker Change: Other company, Mexico scale reach our resources, bringing together over 800 betting operators 400 sport leagues.
Speaker Change: 900 media partners.
Speaker Change: Covering nearly.
Speaker Change: <unk> sport mentioned every year.
The breadth and depth of our content data and leading technology provides us unmatched insights into that.
Speaker Change: <unk> portfolio of sport Bettors press corrected.
Speaker Change: Enabling us to create innovative solutions.
Speaker Change: For our clients and engaging and personalized experience for sports fans worldwide.
Speaker Change: Our confidence in the year ahead is backed by our consistent track record.
Carsten Koerl: Having achieved profitable revenue growth of at least 20% for each of the last three years, as well as being cash generative, we believe there are no other companies in our peer group, public or private, that have achieved this. Now let's turn to our first quarter. We saw strong results on both the top and bottom line, as we grew revenue 28% year-over-year to €266 million and adjusted EVTA 29% to 47 million viewers. 5th March. A great start to the year.
Speaker Change: Having achieved profitable revenue growth.
Speaker Change: At least 20%.
Speaker Change: Each of the last three years as well as being cash generator.
Speaker Change: Believes there are no other companies in our peer group public or private.
Speaker Change: <unk> achieved this.
Speaker Change: Now, let's turn to our quarter one results.
Speaker Change: We saw strong results on both the top and bottom line.
Speaker Change: As we grew revenue 28% year over year to.
Speaker Change: 266 million euros and.
Speaker Change: <unk> EBITDA, 29%.
Speaker Change: 47 million euros fit.
Speaker Change: <unk> marks.
Speaker Change: Great start to the year.
Carsten Koerl: Before I get into the details of the results, I wanted to note that this quarter we simplified our financial reporting approach to align with the recent changes to our organization and to address feedback we have received to present our financials in a simpler way and that aligns with our business fundamentals. Now to our revenue. Patent technology and solution revenue was up 35%, and sports content technology solutions revenue was up 5%.
Speaker Change: Before I get into the details of the results I wanted to note that this quarter, we simplified our financial reporting approach to align with the recent changes to our organization and to address the feedback we have received to present our financials.
Speaker Change: The way that best aligns with our business fundamentals.
Carsten Koerl: [inaudible] Rest of the world revenues were up 90% year-over-year, while US revenues were up 65% year-over-year. We saw the tangible and significant benefits from our AT&T and MBA partnerships, which are amplifying our revenue growth, helping drive pricing and customer uptake of additional services. The fact that customers' outtake on ATP content and solutions is running above all that.
And now to our revenue.
Speaker Change: Patent technology and solutions revenue were up 35%.
Speaker Change: Both content and technology solutions revenue.
Speaker Change: 5%.
From a geographic mix.
Speaker Change: Rest of World revenues were up 90% year over year, while U S revenues were up 65% year over year.
Speaker Change: We saw the tangible and significant benefits.
Speaker Change: NBA partnership.
I'll amplify our revenue growth.
Speaker Change: <unk> been drive pricing and customer uptake.
Speaker Change: Additionally.
Speaker Change: In fact customers take on ATP content and solutions is running above that.
Carsten Koerl: And we have already seen more than 50% of ATP clients signing up for our four audiovisual products. A number are also taking our latest innovations, like Sportradar 4-star streaming, reinforcing the premium nature of this concept. Given this performance, we have raised our full year's outlook for revenue and adjusted EBITDA growth to at least 21%. Underscoring these excellent results, we will be putting our $200 million share repurchase program to work during the upcoming trading. Now, turning to some of the operational highlights in the quarter and more recently.
Speaker Change: And we have already seen more than 50% of ADP clients signing up for our audio version of the product.
Speaker Change: A number are also taking our latest innovation.
Speaker Change: Spot rates for start screaming reinforcing the premium nature of this contract.
Speaker Change: Given this performance we have raised our full year's outlook.
Speaker Change: Our revenue and adjusted EBITDA growth.
Speaker Change: At least 21%.
Speaker Change: Underscoring these excellent results.
It'll be putting our 200 million share repurchase program to work during the upcoming trading window.
Speaker Change: Now turning to some of the operational highlights in the quarter and more recently.
Carsten Koerl: We are very pleased to have recently announced a new long-term partnership with UTR Sports for UTR Pro Tennis, the Top Tennis Tour for Racing Professionals. Harnessing our industry-leading AI and computer vision technology, we will create new analyzers and insights in each map, helping to drive fan engagement and expand in-play opportunities. Tennis is the second most popular sport, and QTR provides Sportradar with a consistent volume of tennis matches throughout the year, complementing our tennis portfolio and reinforcing our selective approach to expand our sport.
Speaker Change: We are very pleased to.
Speaker Change: Recently announced a new long term partnership with GTR Sports <unk> Pro tennis Court.
Speaker Change: Tennis tour.
Speaker Change: We're raising profession.
Speaker Change: Harnessing our industry, leading AI and computer vision technology.
It will create new analyzers in insights and each match.
Speaker Change: Helping to drive fan engagement and expanding in play opportunity.
Speaker Change: As the second most bet on sports and future provide spot radar for the consistent.
Speaker Change: Tennis matches.
Speaker Change: Thank you.
Speaker Change: Complementing our tenant portfolio and reinforcing our selective approach to expand our spoke about.
Carsten Koerl: We saw continuous momentum in our core products in the quarter, like our managed trading services. Our MTF solution, which offers sophisticated trading risk and liability management for sportsbooks, continues to be a leader in the market. Turnover grew 28% year-over-year to approximately $9 billion this quarter, ranking us as the top bookmaker globally based on liquidity.
Speaker Change: We saw continued momentum in our core products in the quarter like all managed trading services our.
Speaker Change: Our MTS solution, which offers sophisticated trading risk and liability management for spot.
Speaker Change: <unk> to be a leader in the marketplace.
Speaker Change: Turnover grew 28% year over year to approximately 9 billion this quarter ranking us as a top makeup globally based on liquidity.
Carsten Koerl: In our ad business, we deliver personalized digital advertising at scale that drives customer acquisition for our online betting and casino. We work with over 150 brands across multiple digital media channels, including programmatic and paid social. With over 10 billion ad impressions delivered in the first quarter alone, we rank as one of the top advertisers in the online betting industry. Key to our success is our ability to transform the deep data and rich insights from our portfolio of products, enabling us to develop new and enhanced products and create a more immersive betting experience and stimulate impact.
Speaker Change: In our energy business, we delivered personalized digital advertising at scale that drives customer acquisition.
Speaker Change: Online betting and casino floor.
Speaker Change: We work with over 150 brands across multiple digital media channels, including programmatic and paid social.
Speaker Change: Over 10 billion AD impressions delivered in the first quarter alone.
Speaker Change: Rank as one of the top advertisers.
Speaker Change: Online bedding and casino space.
Speaker Change: Key to our success is our ability to transform the deep data enrich insights from our portfolio of Brian, enabling us to develop new and enhanced products.
Speaker Change: And create a more immersive betting experience.
Speaker Change: Emulate in play.
Carsten Koerl: One of the exciting products we recently launched is the iPhone. A game-changing offering that builds on our market-leading for-ops solutions by generating operations tailored for individuals or firms based on their real-time liquidity and deep data. It has proven to generate a higher margin for sportbooks on their betting. In fact, for the recently concluded UEFA European Championship qualifier, it increased profits by an average of 15%. While we initially launched Alphahorts in soccer, it is now live in tennis and is seeing promising results.
Speaker Change: One of the exciting product, we recently launched our thoughts.
Speaker Change: <unk>, changing offering which builds on our market leading solutions.
<unk> solutions.
Speaker Change: Generating ox tailored for individuals both books based on their real time liquidity and deep data.
Speaker Change: It has proven to generate the higher margin fore spoke books.
Speaker Change: I think David.
Speaker Change: In fact for the recently concluded UEFA European Championship quantified bench.
Speaker Change: The increased profit by an average of 15%.
Speaker Change: While we initially launched alcohol in software.
Speaker Change: It is not a lot of incentives.
Speaker Change: The promising results.
Anthony: Anthony will soon be introducing it to basketball.
Carsten Koerl: And we will soon be introducing it to basketball. 5.1 In 2025, we plan to release it in three more sports, bringing total coverage for our turnover to approximately 90%. We are leading when it comes to innovation and product development, and this is fueling our growth. Sportradar made Fast Company's 2024 list of the most innovative companies in sport for our leading computer vision technology and enhanced table tennis solution. Our latest team are the drivers for this, and they have an unwavering commitment and dedication to making Sportradar one of the most exciting places to be in the sport industry on this front.
Anthony: <unk> quarter, one 2025, we plan to release it in three Motorsports.
Speaker Change: Total coverage for I'll turn over to approximately 90%.
Speaker Change: We are leading when it comes to innovation and product development and this is fueling our growth.
Speaker Change: Scott later made fast company's 'twenty 'twenty four days of most innovative companies and support for all leading computer vision technology and enhanced data Center solutions.
Our leadership teams are the drivers for this success.
Speaker Change: And they have an unwavering commitment and dedication to making spot rate up one of the most exciting basis to be in the sport industry.
Carsten Koerl: We recently welcomed two talented executives to the leadership team. I'm delighted to welcome Greg Falenstein as our Chief Financial Officer and Bijat Bejjadi as our Chief Technology Officer and Chief AI Officer. Greg is a seasoned finance executive and has over 30 years of experience working in finance for U.S. publicly listed companies such as Discovery, News Corp, and Viacom. He joins us from Lindblad Exhibitions, where he was CFO for approximately seven years.
Speaker Change: On this front.
Speaker Change: Recently welcomed two talented executives on the leadership team I'm delighted to welcome Greg Taylor Dunn.
Speaker Change: Our Chief Financial Officer.
Speaker Change: And B just be Saudi as our Chief Technology Officer.
Speaker Change: <unk> Chief AI.
Speaker Change: Frankly, the season finance executed and has over 30 years of experience working in finance on U S publicly listed companies such as discovery Newscorp antibody.
Speaker Change: He joins us from Lin bus plus exhibitions.
Speaker Change: He was CFO for approximately seven years.
Carsten Koerl: Greg will be coming on board starting June 1st, and I'm looking forward to partnering with him as we look to continue to drive our business momentum, operational leverage, and shareholder value. Deja joined us from Google, where he played a key role in developing Google's AI for strategy and commercializing some of its most recognized products, including Google Assistant, Google Lens, and NextGen AIS. I'm very excited to have him sitting in on Switzerland headquarters with me.
Speaker Change: Greg will be coming on board starting show in Paris, and I'm looking forward to partnering with him as we look to continue to drive our business momentum operational leverage and shareholder value.
Speaker Change: Pays us joined us from Google when he played a key role in developing Cougars AI for strategy and commercializing some of its most recognized product <unk>.
Speaker Change: Including Google Assistant Google lens.
And Nexgen AI assistance.
Speaker Change: I am very excited to have him setting in Switzerland headquarters with me.
Carsten Koerl: His dual job title reflects the importance we place on the development of our AI capabilities and the role which he is playing in shaping it. You will be hearing more about this in the coming quarter, but I believe its impact will be transformational for our country.
Speaker Change: <unk> title reflects the importance we place in the development of <unk>.
Speaker Change: Our AI capabilities.
Speaker Change: Hence the rules, which she is having in shape.
You will be hearing more about this in the coming quarters.
Speaker Change: This impact could.
Speaker Change: It would be transformational for outcome.
Carsten Koerl: These additions complement an executive team that is already highly talented, passionate, and driven to win. I have great confidence in our team's ability to continue to drive our business forward in the years ahead. I also want to take this moment to thank Joe for his contributions and leadership. He was a meaningful strength in our financial organization, and he's leaving us with a strong team and foundation. I don't want to speak for the entire organization, but I would say it has been a great pleasure working with you, and we wish him the best of luck in his future endeavors.
These additions complement an executive team that is an already highly talented passionate.
Speaker Change: Driven to win.
Speaker Change: I have great confidence in our team's ability to continue to drive our business forward in the years ahead.
Speaker Change: I also want to take this moment to center for his contributions and leadership.
Speaker Change: He was meaningfully strengthened our financial organization, and it's leaving us with a strong team and foundation.
Speaker Change: I want to speak for the entire organization.
Speaker Change: I'd say it has been a great pleasure working with sure.
Speaker Change: And we wish him the best of luck in his future endeavors.
Carsten Koerl: Now touching on our key products. Our leadership team is focused on driving shareholder value through the execution of our growth strategy, where the fundamental pillars are centered around content, data, and technology. By exploring the full depth and breadth of our content, data rights, and technology portfolio, we are investing in exciting new products that will deliver future value for our clients and enhance our growth in the coming years, using our advanced technology and AI capabilities.
Speaker Change: Now touching on our key programs our leadership team is focused on driving shareholder value through the execution of our growth strategy, where its fundamental pillars are centered around content.
Speaker Change: Data and technology.
Speaker Change: We're exploring the full depth and breadth of our content data and.
Speaker Change: That technology portfolio, we are investing in exciting new products.
Speaker Change: It will deliver future value for our clients and enhancing our growth in the coming years.
Speaker Change: By using our advanced technology and AI capabilities, we have.
Carsten Koerl: We are enhancing our core products across operations making, trading, and marketing services. This, in turn, will help drive fan engagement, and operators monitor results. The strategy beyond the immediate priorities is taking shape, with a key step being the recruitment of a technology leader with basic skills and experience as a technology. I look forward to sharing more about our plans around AI and our exciting future and the coming. To wrap up, this is the year of execution, and we are delivering on our core commitments for 2024 while positioning ourselves for continued growth in the exciting year ahead.
Speaker Change: On enhancing our core products across all its making trading.
Speaker Change: Marketing services.
Speaker Change: This interim will help drive fan engagement and operators monetization.
Speaker Change: The strategy beyond.
Speaker Change: Immediate priority is taking shape.
Speaker Change: With a key step being the recruitment of the technology leader rich piece of skill and experience.
Speaker Change: As a technology.
<unk> truly excites me.
Speaker Change: I look forward to sharing more about our plans around AI and our exciting future and the coming quarters.
Speaker Change: To wrap up this is the year of execution and we are delivering on our core commitments for 2024, five positioning ourselves for continued growth in the exciting year to come.
Carsten Koerl: It was an excellent order, and we are well positioned to continue to deliver strongly in the year ahead. Our financial performance is underpinned by the depth and scale of our business fundamentals. The strategic investments we are making for the future and our leadership team's sharp focus on execution and driving efficiency are all of these factors enabling us to continue to lead the industry with our growth strategy and unwavering focus on client and shareholder development. I'm extremely optimistic about Sportradar's outlook and long term. And now, I will turn it over to you.
It was an excellent quarter and we.
Speaker Change: We are well positioned to continue to deliver strongly in the year ahead.
Speaker Change: Our financial performance was underpinned by the depth and scale of our business fundamentals.
Speaker Change: The strategic investments, we are making for the future and our leadership team laser sharp focused on execution and driving efficiency.
Speaker Change: All of these factors are enabling us to continue to lead the industry with our growth strategy and unwavering focus on client and shareholder value.
Speaker Change: Extremely optimistic about Colgate is also.
Speaker Change: And long term future.
Speaker Change: No.
Gerard Griffin: Thank you, Carsten, for your kind words. It has been a pleasure to work with you and the great team at Sportradar. I would also like to welcome Craig and Bashad to the leadership team. I remain a big fan of the company and wish you all the best in the exciting broad years ahead. With respect to 2024, we are very happy with our positive start this quarter, where we delivered strong growth top and bottom.
Speaker Change: I will turn it over to Jay.
Jay: Thank you Carsten for your kind words it.
Speaker Change: It has been a pleasure to work with you and the great team at sport radar.
Speaker Change: Also like to welcome Craig can be shot to the leadership team.
Speaker Change: I remain a big fan of the company and wish you all the best and exciting years ahead.
Speaker Change: With respect to 2024, we are very happy with our cost to start this quarter, where we delivered strong growth top and bottom.
Gerard Griffin: Our business fundamentals continue to be strong, and we are well positioned for continued growth and success in 2024, where we are raising our full-year outlook. Before I get into the detail of our Q1 performance and our improved outlook for 2024, I want to briefly comment on the changes we've made to our financial reporting. While there is no change to our core financial statements, we will now report and discuss our financial performance on a consolidated basis, supported by Supplemental Revenue Analysis, by Major Product Grouping, and by Major Geographic Regions. This reporting approach is more in line with our streamlined global organizational structure and how we manage our business.
Speaker Change: Our business fundamentals continue to be strong and we are well positioned for continued growth and success in 2024, where we are raising our full year outlook.
Speaker Change: Before I get into the detail of our Q1 performance and our improved outlook for 2024 I want to briefly comment on the changes we've made to our financial reporting.
Speaker Change: While there is no change to our core financial statements. We will now report and discuss our financial performance on a consolidated basis.
Speaker Change: <unk> buy supplemental revenue analysis by major product grouping and biometric geographic region.
Speaker Change: This reporting approach is more in line with our streamline global organizational structure and how we manage our business.
Gerard Griffin: We have posted an overview of these changes on our investor relations section of our website. With that, let's discuss our Q1 financial performance. Our Q1 financial results reinforce the durability and the scalability of our growth profile, as well as our focus on profitability. Revenue was 266 million euros, up 58 million or 28% year over year. We had a net loss in the quarter of 1 million euros versus a profit of 7 million euros in the prior year quarter.
Speaker Change: We have posted to our Investor Relations section of our web site and over to you of these changes.
Speaker Change: So now, let's discuss our Q1 financial performance.
Gerard Griffin: Adjusted EBITDA was 47 million euros, up 11 million or 29% year-over-year; the adjusted EBITDA margin was 18% in line with the prior year; and cash from operating activities was $67 million, up $10 million or 17% year over year. Our strong revenue growth was driven primarily by recurring client revenue streams, leveraging our best-in-class products and content portfolio, amplified this year by the incremental contributions from our ATP and MBA partnership deals. Adding technology and solutions represented 82% of our total revenues and delivered 219 million of 56 million, or 35% year over year.
Speaker Change: Our Q1 financial results reinforce the durability and the scalability of our growth profile as well as our focus on profitability.
Speaker Change: Revenue was 266 million euros up $58 million or 28% year over year.
Speaker Change: We had a net loss in the quarter of 1 million euros versus a profit of 7 million in the prior year quarter.
Speaker Change: Adjusted EBITDA was 47 million euros up 11 million or 29% year over year.
Speaker Change: Adjusted EBITDA margin was 18% in line with the prior year.
Speaker Change: Net cash from operating activities was $67 million up $10 billion or 17% year over year.
Speaker Change: Our strong revenue growth was driven primarily by the recurring client revenue streams, leveraging our best in class products and content portfolio amplified this year by the incremental contributions from our ATP and NBA partnership deals.
Speaker Change: Adding technology and solutions represented 82% of our total revenues and deliver $219 million up $56 million or 35% year over year.
Gerard Griffin: This was driven primarily by streaming and betting engagement of 26 million or 46% year over year; Live Data and Ops up 19 million or 29% year-over-year, and Managed Fedding Services up 12 million or 32% year-over-year. For Wisconsin, technology and services represented 18% of total revenues and delivered 47 million, up 2 million or 5% year-over-year, driven primarily by marketing and media services, which grew 6%. On a geographic basis, our rest of our client base represented 75% of total revenue, delivering 200 million of 33 million or 19% year over year.
Speaker Change: This was driven primarily by streaming embedding engagement of $26 million or 46% year over year.
Speaker Change: Data loss of $19 million or 29% year over year, and managed cutting services up $12 million or 32% year over year.
Speaker Change: Well its content technology and services represented 18% of total revenues and delivered $47 million up $2 million or 5% year over year, driven primarily by marketing and media services, which grew 6%.
Speaker Change: On a geographic basis, our rest of world client base represented 75% of total revenues.
Speaker Change: <unk> $200 million up $33 million or 19% year over year.
Gerard Griffin: Our US client base represented 25% of total revenues and delivered 66 million of 26 million, or 65% year-over-year. We generated a loss in the quarter of 1 million euros compared to a profit of 7 million in the prior year quarter.
Speaker Change: Our U S client base represents a 25% of total revenues and delivered 66 million up $26 million or 65% year over year.
Speaker Change: We generated a loss in the quarter of 1 million euros compared.
Speaker Change: Compared to a profit of $7 million in the prior year quarter.
Gerard Griffin: The year-over-year change was primarily driven by higher finance costs and foreign currency losses, which collectively accounted for $24 million of the year-over-year change. This was partially offset by a $7 million lower stock-based compensation expense and an $11 million improvement in adjusted EBITDA. Looking at our adjusted EBITDA, it was $47 million, up $11 million or 29% year-over-year. Adjusted EBITDA margins were 18%, in line with the prior year. While our adjusted EBITDA margins were flat year on year, the strategic actions we've taken to date, as well as the continued focus on sustainable profitability in 2024, delivered a 10 percentage point improvement in operating leverage collectively in personnel, cost of sales, and other operating costs.
Speaker Change: The year over year change was primarily driven by higher finance costs, and foreign currency losses, which collectively accounted for $24 million of the year over year change.
Speaker Change: This was partially offset by 7 million and lower stock based compensation expense and an $11 million improvement in adjusted EBITDA.
Speaker Change: Looking at our adjusted EBITDA was $47 million up $11 million or 29% year over year.
Speaker Change: Adjusted EBITDA margins were 18% in line with the prior year.
Speaker Change: While our adjusted EBITDA margins were flat year on year, the strategic actions, we've taken today as well as the continued focus on sustainable profitability in 'twenty four delivered at 10 percentage points improvement in operating leverage collectively and personnel cost of sales and other operating costs.
Gerard Griffin: This helped to offset the impact on operating leverage resulting from the one-time step-up in sports rights costs, primarily for the first year of the NBA and ATP partnership field. Personal expenses were $80 million, or 3% year over year, as we benefited from the cost actions announced last year and our focus on delivering improved operating leverage.
Speaker Change: This helped to offset the impact on operating leverage resulting from the onetime step up in sports rights costs, primarily for the first year of the NBA and ATP partnership deals.
Speaker Change: Personnel expenses were $80 million up $3 million or 3% year over year as we benefited from the cost actions announced last year and our focus on delivering improved operating leverage.
Gerard Griffin: Other operating expenses were 21 million, broadly flat year-over-year, as they also benefited from the cost actions announced last year and are focused on delivering improved operating leverage. Sports rights were 91 million, up 40 million or 78% year over year, driven by new rights, in particular our ATP and NBA partnership deals. This increase was in line with our expectations. We continue to maintain a strong balance sheet, close to the quarter with liquidity of $495 million, comprised of $275 million in cash and cash equivalents and a $220 million revolving credit facility with no amounts outstanding.
Speaker Change: Other operating expenses were 21 million broadly flat year over year as they also benefited from the cost actions announced last year and are focused on delivering improved operating leverage.
Speaker Change: <unk> hundred $91 million up $40 million or 78% year over year, driven by new rights in particular, our ATP and NBA partnership deals.
Speaker Change: This increase was in line with our expectations.
Speaker Change: We continue to maintain a strong balance sheet close of the quarter with liquidity of 495 million comprised of $275 million in cash and cash equivalents and at $220 million revolving credit facility with no amounts outstanding.
Gerard Griffin: On cash flow, we expect to see stronger cash generation over the remaining quarters of this year and are on track to achieve robust cash flow generation for the full year. With our strong business fundamentals and our confidence in the long-term profitability and cash flow outlook for the company, we feel our stock is very attractive at current valuation levels. Accordingly, we expect to commence purchases under our previously announced U.S. dollar 200 million share buyback program during the upcoming trading window.
Speaker Change: On cash flow, we expect to see stronger cash generation over the remaining quarters of this year and are on track to achieve robust cash flow generation for the full year.
Speaker Change: But our strong business fundamentals and our confidence in the long term profitability and cash flow outlook for the company. We feel our stock is very attractive at current valuation levels.
Speaker Change: Accordingly, we expect to commence purchases under our previously announced U S dollars 200 million share buyback program and the upcoming trading window.
Gerard Griffin: In summary, we delivered a strong Q1 financial performance, including record revenues, as well as a strong adjusted EBITDA, as we continue to be laser focused on improving operating leverage and profitability. With that, let's turn to our revised 2024 outlook. Given our strong start to the year, we are raising our full-year outlook and now expect to deliver at least 21% growth in revenue and adjusted EBITDA, which equates to the following: revenue of $1.06 billion versus the prior guidance of $1.05 billion. Adjusted EBITDA of $202 million versus our prior guidance of $200 million, adjusted for margins of approximately 19%.
Speaker Change: In summary, we delivered a strong Q1 financial performance, including record revenues as well as a strong adjusted EBITDA as we continue to be laser focused on improving operating leverage and profitability.
With that let's turn to our revised 2020 for outlook.
Speaker Change: Given our strong start for the year, we are raising our full year outlook and now expect to deliver at least 21% growth in revenue and adjusted EBITDA, which equates to the following.
Speaker Change: Revenue of one point or 600 billion versus the prior guidance of $1 500 billion.
Speaker Change: Adjusted EBITDA of $202 million versus our prior guidance of 200 million.
Speaker Change: Adjusted EBITDA margins of approximately 19%.
Gerard Griffin: Some factors to consider when assessing our outlook for 2024. Revenue growth will be driven primarily by our strong recurring client revenue streams, leveraging our best-in-class products and content portfolio, amplified this year by the addition of our ATP and NDA partnerships. As we've noted in the past, we are continuously challenging all aspects of our business to ensure that we're focusing our talent and resources on the most profitable growth opportunities and unlocking operating leverage.
Speaker Change: Some factors to consider when assessing our outlook for 2024.
Speaker Change: Revenue growth will be driven primarily by our strong recurring client revenue streams, leveraging our best in class products and content portfolio amplified. This year by the addition of our ACP and NBA partnerships.
Speaker Change: As we've noted in the past we are continuously challenging all aspects of our business to ensure that we're focusing our talents and resources on the most profitable growth opportunities and unlocking operating leverage.
Gerard Griffin: We expect the strategic actions we've taken today, as well as our continued focus on sustainable profitability in 2024, will unlock operating leverage in personnel, close to sales, and other operating costs. This should offset the impact on operating leverage resulting from the one-time step-up in sports rights costs from the first full year of the NBA and ATP partnership deals. For the year, we expect our adjusted EBITDA margins to progress from the mid to high teens in the first half of the year into the low 20s in the second half of the year. This seasonality is primarily a function of the phasing of sports rights costs and the realization of the full year run rate benefits from our cost action.
Speaker Change: We expect the strategic actions, we've taken to date as well as our continued focus on sustainable profitability in 2024 will unlock operating leverage and personnel cost of sales and other operating costs.
Speaker Change: This should offset the impact on operating leverage resulting from the onetime step up in sports rights costs from the first full year of the NBA and ATP partnership deals.
Speaker Change: For the year, we expect our adjusted EBITA margins to progress from the mid to high teens in the first half of the year into the low <unk> in the second half of the year.
Speaker Change: This seasonality is primarily a function of the facing of sports rights costs and the realization of the full year run rate benefits from our cost actions.
Gerard Griffin: We continue to be very focused on enhancing margins and free cash flow generation. As we look beyond 2024, we see the potential to unlock operating leverage from all major expense line items as we actively manage our operating cost run rates and benefit from a more stable sports rights portfolio cost base. In summary, we are very pleased with our excellent Q1 performance and how the rest of the year is unfolding. Our business fundamentals are strong, and we are very well positioned for continued growth and success in 2024.
Speaker Change: We continue to be very much focused on enhancing margins and free cash flow generation.
Speaker Change: As we look beyond 2024, we see the potential to unlock operating leverage from all major expense line items as we actively manage our operating cost run rate and benefit from a more stable sports rights portfolio cost base.
Speaker Change: In summary, we are very pleased with our excellent Q1 performance and how the rest of the year is unfolding.
Speaker Change: Our business fundamentals are strong and we are very well positioned for continued growth and success in 2024.
Gerard Griffin: Before I hand off to the operator for questions, I would like to thank all of our investors and analysts for their support. It's been a pleasure engaging with you, and I wish you and Sportradar success in the exciting years ahead. With that, I would like to open the call for questions. Operator, will you open the line for questions?
Before I hand off to the operator for questions.
Speaker Change: I'd like to thank all of our investors and analysts for their support it's been a pleasure engaging with you and I wish you and sport radar success and exciting years ahead.
Speaker Change: With that I would like to open the call for questions. Operator will you open the line for questions.
Operator: Thank you. As a reminder, if you'd like to ask a question, please press star 1 1. If your question hasn't been answered and you would like to remove yourself from the queue, please press star 1 again. Our first question comes from Ryan Sigdahl with Craig Hallam Capital Group. Your line is open.
Thank you as a reminder, if you'd like to ask a question. Please press star one one.
Speaker Change: If your question has been answered and you'd like to remove yourself from the queue. Please press star one again.
Our first question comes from Ryan <unk> with Craig Hallum Capital Group. Your line is open.
Carsten Koerl: Hey, good day Carsten, and best of luck in future endeavors, Chair. I want to start with data rights. So you're on the tail end of your new MBA contract. Or I guess you're one of that. But what I think you've learned kind of how that's progressed, the ability to pass through prices to your customers, and then kind of as you think about negotiating new deals with your existing leagues, but also potential new ones.
Speaker Change: Hey, Good day Carson.
Speaker Change: Best of luck in future endeavors.
Ryan: I want to start with data rates.
Speaker Change: No.
Speaker Change: You're on the tail end of your new NBA contract.
Speaker Change: Or I guess youre, one of that but what I guess have you learned kind of how thats progressed, the ability to pass through price to your customers and then kind of as you think about negotiating new deals with your existing fleets, but also potential new ones.
Carsten Koerl: Hi Ryan, Carsten here. So, as you see in the numbers, we have very successfully integrated ATP and MBA, the new contract in our portfolio. And as you see in the U.S. numbers, we exactly reached and overreached what we had in mind. So we could upsell more of the players in the market with the ATP content, specifically here, in this case, AV. So we have the effect from our strong position in the market that we can leverage this and upsell based on this content.
Speaker Change: Yes.
Speaker Change: Hi, Ryan Carsten here, so as you see in the numbers, we very successfully integrated ATP and MBA, the new contract in our portfolio.
Speaker Change: And that's what you see in the U S numbers.
Speaker Change: Secondly reached an overreached, what we had in mind, so we could up sell more of the players in the market. Mr. ATP content, specifically here in this case a heavy so we have that effect from our strong position in the market that we can leverage this and upsell based on this content and as you see.
Carsten Koerl: And as you see in the growth and as you see in the adjusted EBTA, we compensated for the upstep and the spotlights as predicted, and we demonstrate here a very strong performance with the new properties. We are very happy looking into the next years because, as we all know, we have linear amortization for many years. In the case of NBA, now, there are still seven years to go, in the case of ATP, five years. So we will profit from the strong growth year over year because the cost base is linear and similar to the
Speaker Change: And the growth.
Speaker Change: As you'll see in the adjusted EBITDA.
Speaker Change: Big compensated top step into spotlights predicted and we demonstrate here.
Speaker Change: Strong performance with some new properties, we are very happy looking into the next years because as we all know we have the amortization linear for many years in case of MBA two seven years to go in case of the ATP of five years.
Speaker Change: Profit with strong growth year over year, because the cost base is linear and similar to this year.
Gerard Griffin: Very good. For my second question, I was just curious about guidance.
Speaker Change: Very good for me.
Question, just curious on guidance, so nice to see kind of the strong results in Q1, raising your expectations for the year I guess the beat on Q1 versus street expectations was bigger than you are flowing through to the guidance. Maybe that is just a little bit of management versus street expectations on kind of a quarterly basis, but.
Speaker Change: Anything to be aware of from a cost standpoint, or anything kind of throughout the rest of the year on kind of Q1 versus the guide.
Gerard Griffin: So nice to see kind of strong results in Q1, raising your expectations for the year. I guess the beat on Q1 versus street expectations was bigger than you're flowing through to the guidance. Maybe that is just a little bit of management versus street expectations on kind of a quarterly basis. But anything to be aware of from a cost standpoint or anything kind of throughout the rest of the year on kind of Q1 versus the guide.
Brian: Brian It's sure listen as we said very happy with the Q1 performance both top and bottom.
Brian It: And I think even more importantly, how we see the year unfolding our decision was to releasing.
Gerard Griffin: Go ahead, Mr. Chairperson. Listen, as we said, very happy with the Q1 performance, both top and bottom. And, I think even more importantly, how we see the year unfolding. Your decision was to release an extra point of growth on revenues and EBITDA through to our updated outlook. However, in terms of the spend side of things, there was a bit of phasing. We had some credits from a cloud service point of view that hit during the quarter where we expected them to turn off mid year.
Speaker Change: <unk> released an extra point.
Speaker Change: Growth on revenues and EBITDA through to our updated outlook in terms of the spend side of things. There was there was a bit of phasing. We had some credits from a cloud service point of view that hit the quarter, where we expect them to turn off mid year.
Gerard Griffin: And there is a little bit of phasing in terms of how some of our projects are rolling out. But, you know, as you saw, we're quite happy with how the year's unfolding. And, you know, we'll see when we get through the end of Q2 to see if there's more that we can release into the market.
Speaker Change: And there is a little bit of facing in terms of how some of our projects are rolling out but yes.
Speaker Change: As you saw where we're quite happy with how the year is unfolding and.
Speaker Change: Yes, we will see when we get through the end of <unk>.
Speaker Change: Q2 to see if there is more that we can release into the full year.
Gerard Griffin: Any way to quantify that, Chair? If not, that's okay.
Speaker Change: Any way to quantify that jarrod.
Speaker Change: Okay. Thanks, guys. Good luck.
Gerard Griffin: Thanks, guys. Good luck. It's around five to six million, you know, from an EBITDA perspective that you'll see sort of blended into the second half of the year. Very good. Well done, guys.
Speaker Change: It's around $5 million to $6 million from an EBITDA perspective that you'll see sort of a blended into the second half of the year.
Speaker Change: Very good well done guys.
Gerard Griffin: And thank you for my endeavors.
Speaker Change: Thank you.
Speaker Change: Thank you for my endeavors.
Operator: Our next question comes from Michael Graham with Canaccord. Your line is open.
Speaker Change: Our next question comes from Michael Graham with Canaccord. Your line is open.
Michael Patrick Graham: Thanks a lot. And congrats on the strong performance.
Michael Patrick Graham: Thanks, a lot congrats on the strong performance I wanted to ask two questions. The first is just with the appointment of the shot is chief technology and AI officer, just interested in how you see.
Speaker Change: The benefits of that initiative.
In terms of growth or an enhanced profitability, just maybe talk about the key leverage points there and then.
Michael Patrick Graham: I wanted to ask two questions. The first is just about the appointment of the new chief technology and AI officer. I'm just interested in, you know, how you see the benefits of that initiative, either in terms of growth or in enhanced profitability, maybe talk about the key leverage points there. And then, somewhat related to that, just maybe at a high level, talk about the building blocks to get from where you are now in terms of EBITDA margin closer to your long-term target of 25 to 30%.
Speaker Change: Somewhat related to that just maybe at a high level talk about the building blocks to get from where you are now in terms of EBITDA margin closer to your long term target of 25% to 30%.
Carsten Koerl: Hi Michael, Carsten here. I'll take the first part and then leave the building blocks to Ger.
Speaker Change: Hi, micro customer here I'll take the first part and leave the building blocks to sure.
Carsten Koerl: I'm super proud and very excited that we could convince a professional like Beja to join our company. Knowing that he was really the driving force behind Google's European activities in AI, driving a product like Google Lens and a couple of other things I mentioned in the call, you can imagine how proud we are that we could convince him to run our business. So given this, you see MTS performance is strongly up, generating a 15% higher profit, which is sensational in trading, compared to what we have at the moment.
Speaker Change: I am Super proud and very excited that we could convince the professional like piece of total join our company.
Speaker Change: Knowing that he was.
Total: Really the driving force behind <unk> European activities in AI, driving a product like Google lens and a couple of other things I mentioned it in the call you can imagine how proud we are that we could convince him to run our business. So given this we see MTS performance was strongly up.
Speaker Change: Thoughts yes.
Speaker Change: Generating a 15% higher profit, which is sensational on trading comparing it to what we have at the moment. So it's all about to build the engine to ingest massive data on all levels to fan data the liquidity inflammation, which is there and of course, the real time sports data.
Carsten Koerl: So it's all about building the engine to ingest massive data on all levels, the fan data, the liquidity information which is there, and of course, the real-time sports data, and then use this and the products to generate value for our clients. So there is lots to come, a lot of new products, of which we have mentioned a couple of them, and Bazinet will drive this development. The abilities which you have with AI are very hard to predict for the next few years, but one thing is for very sure, this is a core technology to be deployed, and we have now a setup which is making us by far the strongest in the market. Handing over to Joe
Speaker Change: And then use based on the products to generate the value for our clients. So there is lots to come a lot of new products, which we mentioned a couple of them and patients will trough. This development.
Speaker Change: <unk>, which you have with AI is very hard to predict for the next few years, but one thing is for sure. This is a core technology to be deployed and we have now set up which is making us by far the strongest in the market.
Gerard Griffin: Yeah, in terms of the operating leverage, you know, the way we think about, you know, the business, if you sort of break down the spend, you've got your sports rights, which this year is a material step up. But as we look to the future, we see the sports rights call space to be a more stable call space, which will obviously give us the ability to leverage that from an operating leverage point of view. But the big ticket items, starting at the highest number, are our people and talent. That's the largest spend in the company in terms of our personnel costs. And then next will be sports rights.
Gerard Griffin: Handing over to Joe Yes in terms of the.
Gerard Griffin: Operating leverage.
Gerard Griffin: The way the way, we think about the business if you sort of breakdown.
Gerard Griffin: Spend.
Speaker Change: You've got you've got your sports rights, which.
Joe Yes: This year is a material step up but as we look to the out years, we see the sports rights cost space to be a more stable cost base, which will obviously give us the ability to.
Joe Yes: To leverage that from a operating leverage point of view.
Joe Yes: But the big ticket items.
Joe Yes: Starting at the highest number is our is our people and talent that's the largest spend in the company in terms of our personnel costs and then.
Gerard Griffin: And then you've got all other operating spend and cost of sales. Those lines, as you saw this year, given the actions we've taken and our continuing revenue growth, are delivering at least five points of operating leverage, which is offsetting the step up in sports rights this year. If you think about all of those lines going into 25 and 26 and 27, our expectation is that our revenue growth will be ahead of the growth that will be in those lines.
Joe Yes: Next will be sports rights and then you've got all other operating spend in cost of sales those lines. As you saw this year given the actions we've taken and our continuing revenue growth are delivering at least five points of operating leverage which is offsetting the step up in sports rights. This year. If you think about all of those lines going into 25% and 26 in 2000.
Joe Yes: Our expectation is that our revenue growth will be ahead of the growth that will be in those lines and those lines will meaningfully help us get to our long term goals of between 25% to 30%.
Gerard Griffin: And those lines will meaningfully help us get to our long-term goals of between 25 and 30 percent EBITDA margins. So the sort of key to it all is having a more normalized level of sports rights and then continuing to drive operating leverage across all lines.
Joe Yes: EBITDA margins.
Joe Yes: The sort of the key to it all is.
Joe Yes: Having a more normalized level of sports rights and then.
Joe Yes: And to drive operating leverage across all lines.
Michael Patrick Graham: All right, perfect. Thanks so much.
Alright, perfect. Thanks, so much.
Operator: Our next question comes from Robin Farley with UBS. Your line is open.
Speaker Change: Thank you. Thank you.
Speaker Change: Our next question comes from Robin Farley with UBS. Your line is open.
Robin Margaret Farley: Great, thanks. I know you mentioned some, I guess, credit that came in in Q1 that you had expected later in the year, so there was some timing shift. But if we just look at the full year, raise your revenues up $10 million, and the guidance and EBITDA are up $2 million. So just wanted to ask how we should think about flow through. In other words, are revenues coming in better than you thought, but it seems like expenses are coming in a little bit, too, offsetting some of that incremental $10 million.
Robin Margaret Farley: Great. Thanks.
Robin Margaret Farley: I know you mentioned.
Robin Margaret Farley: I guess credit that came in in Q1 that you had expected later in the year. So there was some timing shift, but if we just look at the full year raise your revenues up $10 million the guidance and the EBITDA was up $2 million. So just wanted to ask how should we should think about flow through in other words.
Speaker Change: Are there so revenues coming in better than you thought, but it seems like expenses are as well.
Speaker Change: Coming in a little offsetting some of that incremental $10 million. So if you could just help us think about that flow through.
Robin Margaret Farley: So if you could just help us think about that flow through. And then my other question is, you were talking about sports rights being, you know, fairly fixed going forward. Can you talk to us about how Major League Baseball may impact that?
Speaker Change: And then my other question is.
Speaker Change: You were talking about sports rights being fairly six going forward can you talk to us about how major league baseball may impact that.
I don't know if that something Youll quantify I know you don't you Havent officially come out with anything on that but.
Speaker Change: How we should think about that.
Speaker Change: Impacting your outlook, if the sports right.
Gerard Griffin: Yeah, for now, Robin, we made the decision to give a percentage point uplift on our growth for top and bottom. I think in terms of revenue performance, as we said, we saw a very nice pickup in ATP, both in absolute terms, but also in terms of the mix. And, you know, you will see that our sports rights were obviously up.
Speaker Change: Right.
Speaker Change: Thanks.
Robyn: Yes for now Robyn So we made the decision to give a percentage point.
Speaker Change: Uplift in our growth for top and bottom I think in terms of the revenue performance as we said we saw a very nice pickup in ATP. Both in absolute terms, but also in terms of the mix and you will see that our sports rights.
Gerard Griffin: And so, when you think about flow through, there is a correlation there in terms of the, you know, sports rights cost and the ramp of revenue. As we progress through these contracts, obviously, the flow through gets a lot better. And so you'll see the contribution to margin expansion in the coming years. But as we look at it now, it's not it was not a high flow through in terms of the amount that you would have you would expect in a more normalized situation.
Speaker Change: We're obviously up and so when you think about flow through there is there is a correlation there in terms of the the sports rights cost in the ramp of the revenue.
As we as we progress through these contracts obviously the flow through it gets a lot better and so youll see that youll see the the contribution to margin expansion in the out years, but as we look at it now.
Speaker Change: It was not a high flow through in terms of the.
Speaker Change: That you would you would expect.
Speaker Change: On a more normalized situation, but again.
Gerard Griffin: But again, we're giving you an extra point. We're holding the margin. We'll see how we land in the middle of the year, and yeah, we'll take it from there. But, the key point I'd like to re-emphasize is we love where our fundamentals are, and we like the way the year is unfolding.
Speaker Change: We're giving you an extra point, we're holding the margin we will see how we land middle of the year and yes, we'll take it from there but.
Speaker Change: The key point I would like to reemphasize is.
Speaker Change: We love, where our fundamentals are and we like we like the way the year is unfolding.
Carsten Koerl: And to the second part, Robin, the MLB, there is nothing to be announced today, but we are very confident that we can grow and extend our relationship with the MLB in the very near future. They are a very valued partner for us, like many others, NBA, NHL, as an example, also UEFA. So we have a very strong portfolio, as we said a couple of times. But we see nothing material, nothing which is coming up in the next couple of years which is not predicted.
Speaker Change: And to the second part Robyn.
Speaker Change: B.
Speaker Change: There is nothing to be announced today.
Speaker Change: We have been very confident that we can.
Speaker Change: Can grow and expand our relationship with the MLP in the very soon future. They are very valuable for us.
Speaker Change: Many address NBA NHL. As example, also UAS. So we have a very strong portfolio as we said a couple of times, we see nothing material nothing which is upcoming in the next couple of years, which is not predicted so we have a stable portfolio. We can monetize on this.
Carsten Koerl: So we have a stable portfolio; we can monetize on this. We will always look to the ROI when we invest in new sports rights, and we will execute ruthlessly on this. So if we have sports rights where we believe they are contributing to our margin, we will look into this. But the portfolio which we have is long term, very stable, and is big enough that we can deliver the numbers. So we will do this very selectively with new sports rights but always looking to the return on investment.
Speaker Change: We will always look to the ROI when we invest in two new sports rights.
Speaker Change: We will execute ruthless on days. So if we have sport rights, where we believe they are contributing to our margin. We will look into this but the portfolio, which we have this long term is very stable and is picking up and we can deliver the numbers. So we moved to these various collective fleet with new sport rights.
Speaker Change: But always looking to the return of investment.
Speaker Change: Okay, great. Thank you.
Robin Margaret Farley: Okay, great. Thank you. Thank you. Our next question comes from Bernie McTernan with Needham & Company. Your line is open.
Speaker Change: Thank you. Our next question comes from Bernie Mcternan with Needham <unk> Company. Your line is open.
Operator: Good morning, this is Stephanos Crist calling in for Bernie. Thanks for taking our questions. I just wanted to ask about the new revenue groups.
Stefanos Crist: Good morning. This is stefanos crist, calling in from Bernie Thanks for taking my questions.
Stefanos Crist: I just wanted to ask on the new revenue groups could you talk about the difference in incremental margins between the two thanks.
Bernard Jerome McTernan: Actually, from a margin profile perspective, they're not dramatically different. I think the obvious difference between the two groupings is that the critical masses are core betting, you know, it's data odds, MPS, and there's a strong flow through there. The secondary group, which has sports solutions and media, it's slightly less, but we do see opportunities to grow those revenue streams in the future, in particular when we look at advertising, that could improve the overall margin profile over the long term. But right now, yeah, our betting solutions group is obviously a higher margin, but it's not dramatically different. Got it. Thank you.
Yes.
Speaker Change: Actually from a margin profile perspective, they are not dramatically different I think the obviously the difference between the two groupings as the critical masses, our core betting.
Speaker Change: It's data odds MTS and strong flow through there.
Speaker Change: The secondary group, which has sports solutions media at slightly less but we do see opportunities to grow those revenue streams in the future in particular, when we look at advertising.
Speaker Change: That could improve the overall margin profile over the long term.
Speaker Change: But.
Speaker Change: Now yes.
Speaker Change: Our bedding solutions group is obviously, a higher margin, but it's not dramatically different.
Gerard Griffin: And just to follow up, sports betting accelerated in the quarter year over year. We talked about the major drivers, but do you expect revenue to continue to accelerate in your guidance? Well, we've given you the guidance, you know, the increase in terms of the extra percentage point. But yes, year over year, I think all the quarters that you're going to see strong growth.
Speaker Change: Got it thank you and just a follow up.
Speaker Change: Sports betting accelerated in the quarter year over year.
Speaker Change: You talked about the major drivers, but do you expect revenue to continue accelerate in your guidance.
Speaker Change: Well, we've given we've given you the guidance.
Speaker Change: In terms of the extra percentage point, but yes year over year, I think all the quarters that youre going to see strong growth.
Speaker Change: Yeah.
Speaker Change: Got it thank you.
Gerard Griffin: Thank you. Our next question comes from Michael Hickey with the Benchmark Company. Your line is open.
Speaker Change: Thank you. Our next question comes from Michael Hickey with the Benchmark Company. Your line is open.
Operator: Hey Carsten, Gerard, and Jim, great quarter guys. Thanks for taking our questions. Good luck. Miss you. Thanks for the memories, bud.
Speaker Change: Hey, Carson Chair Jim.
Speaker Change: Great quarter guys. Thanks for taking my questions. Good luck chair Ms. Sue Thanks for the memories Budd.
Michael Hickey: I guess the question is about the U.S. regulatory environment; certainly, it looks like the pressure is starting to ramp up here. And obviously, Carsten, you've run a global business for a couple decades here. So I think you have a pretty good view on how regulatory change can sort of creep into mature markets. Obviously, we're far from mature, but we're starting to see a little bit of pressure. Just sort of curious how you think this is going to play out in the US, how it can impact your business, and how you're thinking about maybe proactive steps that you can take, as a partner with operators, sort of a service to the industry Thanks.
Speaker Change: I guess the question is on the U S regulatory environment.
Speaker Change: And it looks like the precious.
Speaker Change: <unk> starting to ramp here and obviously Carson you've run up.
Speaker Change: Our global business for a couple of decades here. So I think you have.
Speaker Change: Pretty good view on how regulatory change consortium.
Speaker Change: Creep into mature markets. So obviously, we are far from mature, but we're starting to see a little.
Carson: Little bit of pressure just sort of curious how you're seeing.
Speaker Change: It's going to play out in the U S. How can impact your business.
Speaker Change: And how youre thinking about maybe proactive steps that you can take.
Speaker Change: As a partner with operators.
Speaker Change: And sort of a service to the industry and sort of getting in front maybe.
Speaker Change: Self correcting.
Speaker Change: <unk> and the potential federal or state oversight more than we have thanks guys.
Carsten Koerl: Hi Michael. So looking now at the US market regulatory environment and the changes in some states, we see at the moment no negative impact on our business. We understand from all our partners that this is a constant process. And if I'm looking back on all the years I've been in this business, that's quite normal. You need to find your way.
Speaker Change: Hi, Michael.
Speaker Change #100: Looking now to the U S market regulatory environment and the changes changes in some states.
Speaker Change #101: At the moment no negative impact on our business.
Speaker Change #102: We understand from all our partners that this is a constant process and if I'm looking now back on the years I mean this business that's quite useful you need to find your way you need to find what is the sweet spot where to go what are the rules and the values, which are critical for everybody is for example.
Carsten Koerl: You need to find what the sweet spot is, where to go, what the rules and the values which are critical for everybody. For example, responsible gaming is very important. Taxation is very important for the States.
Speaker Change #102: Responsible gaming is very important taxation is very important for the states.
Carsten Koerl: I'm very confident that we will find the right way. And as I said, at the moment, there is no negative impact on us. And it's moderation. It's a constant conversation with all the players in that market, the sport, the government, the regulators, and, of course, also our partners in the industry. And that's what we are doing. So I'm very confident that this will continue to develop in the right way.
Speaker Change #103: I am very confident that <unk> hit it right away and as I said at the moment there is no negative impact on us.
Speaker Change #103: And it's a moderation is constant talk with all of the players in that market to support <unk>.
Speaker Change #103: Government the regulators and of course those are all partners in the industry.
Speaker Change #104: That's what we are doing so I am very confident that this will continue to develop in the right way and by the way is a remark I was traveling in Brazil Sui weeks ago. Having there are also many talks is to finance minister or the sports, which and they are in the older players in the market, it's a pretty similar drop much more early stage than the.
Carsten Koerl: And by the way, as a remark, I was traveling in Brazil three weeks ago, having many talks with the finance minister, all the sports which are there, and all the players in the market. It's a pretty similar plot, much more at an early stage than the U.S., but it takes a while to moderate this to find the best way to satisfy all the interest groups.
Speaker Change #104: But it takes a while to moderate this to find the best way to satisfy all of interest groups.
Michael Hickey: Bye. Thanks, guys. Thank you. Our next question comes from David Katz with Jeffries. Your line is open. Hey guys, this is R.M. Armacost for David Katz.
Speaker Change #105: Alright, thanks, guys.
Operator: Thank you. Our next question comes from David Katz with Jeffries. Your line is open. Hey guys, this is R.M. Armacost for David Katz.
Speaker Change #104: Yes.
Speaker Change #104: Thank you. Our next question comes from David Katz with Jefferies. Your line is open.
David Brian Katz: Well, we are looking at the product outline. That's the most important thing for us.
Speaker Change #106: Hey, guys.
Speaker Change #107: Mr. David Katz.
David Brian Katz: The rest of the quarter and thanks for taking my question.
Speaker Change #109: There has been a strategic focus on core products could you describe how you are thinking about what is core and what isn't.
Speaker Change #109: What stays and goes and what are the financial implications.
Speaker Change #109: Yes.
Carsten Koerl: That's where we want to deploy our capital. And so, looking at the products now, you will see a lot of activities around innovative products, which are driven by ingesting massive amounts of deep data and creating value for our clients. So you will see investments from us in that space because they simply deliver the highest return. We will look for operational leverage, like we have demonstrated it in the US marketplace with some properties and content.
Speaker Change #110: Well, we are looking on the product of Hawaii. That's the most important for us that's where we want to deploy our capital and.
Speaker Change #110: So looking now to the products you will see a lot of activities around innovative products, which are driven by ingesting massive deep data and creating value for all clients. So you will see investments from us in that space because they simply deliver the highest return we will look for our operational leverage.
Speaker Change #111: It's like we demonstrated it now in the U S marketplace.
Carsten Koerl: ATP is a perfect example of how we can use our engine to massively distribute this kind of content. So we will see some investments there. But always with the reminder that we are looking at the product ROI if we buy those properties. So this is our core focus area. Looking now at the whole ecosystem and to broaden it a little bit, it is very exciting to use fan information for marketing activities, to generate leads for our clients, and, of course, then to create follow-up trading services and probability predictions from them for those sports fans. So we are just closing that circle, using all the information we have to provide additional value for our clients.
Speaker Change #111: Whereas some properties in contempt to ATP is a perfect example of how we can use our engine to massively distribute this kind of content. So we will see some investments. There always was the reminder, we are looking to the product.
If we buy those properties. So this is our core focus area looking now to the whole ecosystem and to broaden that a little bit.
It is very exciting to use fan inflammation for marketing activities to generate leads for our clients and of course, then to create following up to trading services and probability predictions from them for those spots.
Speaker Change #111: So we are just closing that circle using all the inflammation, which we have to provide additional value for our clients.
Speaker Change #112: Great. That's all for me thank you.
Operator: Thank you. Our next question comes from Jordan Bender with Citizens J&P. Your line is open.
Speaker Change #113: Thank you.
Speaker Change #114: Our next question comes from Jordan Bender with citizens JMP. Your line is open.
Jordan Maxwell Bender: Great, good morning. Thanks for the question.
Speaker Change #113: Okay.
Great. Good morning. Thanks for the question there seems to be a lot of positive momentum coming from MBA can you maybe just break down some of those factories the inputs going in there maybe between increased volume or some of the pricing or even ship to in play and how those are kind of translate into some of the policy.
Jordan Maxwell Bender: You know, there seems to be a lot of positive momentum coming from the MBA. Can you maybe just break down some of those factors, the inputs going in there, maybe between, you know, increased volume or some of the pricing or even the shift to in-play, and how those are kind of translating to some of the positive commentary coming out of that? And then for the follow-up, you know, when we think about the path to, you know, your EBITDA margin target of 25 plus percent, do you have all the pieces in place today, maybe from even a technology or a footprint base to kind of achieve those targets? Thank you.
Speaker Change #115: You did call me carry coming out of that and then for the follow up when we think about the path to your EBITDA margin target of 25 plus per Se do you have all the pieces in place.
Speaker Change #115: Maybe from even a technology or a great base.
Speaker Change #116: <unk> achieved those targets. Thank you.
Carsten Koerl: Well, I take the first part. That's the problem with the MBA. It was hard work during the last 12 months to convince the market with our new MBA contract to get this locked in. As you see in the numbers, we have been very successful. Now the question is, how can we create value with the enhanced partnership? As you know, we now have deep data from the MBA, and we can use this in products like Foresight or, much more important, in trading products like AlphaOps.
Speaker Change #117: Well I'll take the first part that's the question with the MBA.
Speaker Change #118: It was a hard group during the last 12 months is.
Speaker Change #119: So convinced the market with our new NBA contract to get this locked in as you've seen the numbers. We have been very successful with this knowledge is how can we create value with the enhanced partnership as you know we have now deep data from the MBA and we can use the same product slide four sites.
Carsten Koerl: So we get significantly better real-time information now, and we can visualize this. And we have products on all levels. Like we said last time with LeapFest, we now have a product that we can put on the live screen to operate directly and stimulate the players, and that's very successful. So this is something where we see huge potential in the future. I could speak hours about this, but looking forward for the next couple of years, there is a lot of leverage that we can unlock with the MBA as one of the premium sports properties in the US.
Speaker Change #119: Or a much more important into trading products and other thoughts. So we get now significantly better real time information and we can visualize this MBS products on all levels. Like we said last time was to leak tests. We have now a product that we can put into the live stream to ups directly and stimulates the Pla.
Speaker Change #119: <unk> and <unk>.
Speaker Change #119: That's very successful. So this is something where we see a huge potential in the future I could speak hours about this but looking now forward over the next couple of years. There is a lot of leverage but we can unlock with the MBA as being one of the premium sports properties in the U S.
Gerard Griffin: In terms of thinking about operating leverage, all the ingredients are effectively in the building, and there's a little bit of timing here. When you look at our core execution in 24, it's all about continuing to drive the core product offering and recurring revenue streams and then layering in ATP, NPA, and the run rate benefits of other clients like the Taiwanese lottery. As you go into 25 and 26, it continues to focus on driving core growth.
Speaker Change #119: In terms of.
Speaker Change #119: Thinking about the operating leverage.
Speaker Change #119: All the ingredients are there effectively in the building and there's little bit of timing here.
Speaker Change #119: When you look at our core execution in 'twenty four it's all about continuing to drive the core product offering and recurring revenue streams, and then layering in ACP NPA and.
Speaker Change #119: The run rate benefits of other clients like the tide with these lottery as you go into the $25 26 has continued to focus on driving the core growth from an investment point of view continuing to enhance our product portfolio, whether it's rationalizing best Rois Carson said, our core that we have today.
Gerard Griffin: From an investment point of view, continuing to enhance our product portfolio, whether it's rationalizing based on our ROIs, Carsten said, our core that we have today, layering in new products like AlphaHUDs and MBET, and continuing to bring additional products to So that's all embedded into the overall operating model. And as I said earlier, as long as we maintain our focus on the level of growth that you see in our people costs, as we continue to invest in our teams and all other operating expenditure, and we continue to drive what is a more stable sports rights base.
Alpha hubs: Layering in new products like Alpha hubs, and Beth and continuing to bring additional products to market driven off deep data data another technology innovations.
Alpha hubs: So that's all embedded into the overall operating model and as I said earlier as long as we maintain our focus on the level of growth that you see in our people costs as we continue to invest in our teams and all other operating spend and we continue to drive what is a more stable.
Gerard Griffin: Yes, we'll add to it, but not the same material clip that you saw on 24. Then you will start to see the points of margin flow through to the P&L. TBD on how long it will take us to get to the ultimate goal of 25, 30%, but it's not that far away.
Speaker Change #121: That's right space, Yes, we will add to it but not the same materials that you saw in 'twenty. Four then you will start to see the points of margin flow through to the P&L.
Speaker Change #121: TBD, how long it will take us to get to.
Speaker Change #121: The ultimate goal of $25 30, 30%, but it's not that far away.
Jordan Maxwell Bender: Great. Thanks, Gerard. Best of luck.
Speaker Change #122: Great. Thanks, Gerry best of luck.
Operator: Thank you. Michelle, we'll take our last question.
Thank you Michelle we'll take our last question.
Operator: Thank you. Our last question comes from Shaun Kelley with Bank of America. Your line is open.
Speaker Change #123: Thank you our last question comes from Shaun Kelly with Bank of America. Your line is open.
Shaun Clisby Kelley: Hi, good morning, everyone. Thanks for taking my question. I wanted to ask about pricing, just as we think about the contracts, you know, and the new NBA contract. My question is simply, do we see an increase in pricing that is kind of a one-time movement, i.e., are you changing the contractual rates with your customers that move up, and is that going to be recognized as sort of data as we see the data rights come in, or is a little bit more, is everything more revenue share, and that'll kind of, you know, so we should see continued commensurate growth with what we' Thanks.
Speaker Change #124: Hi, Good morning, everyone. Thanks for taking my question.
Shaun Clisby Kelley: I wanted to ask about pricing just as we think about the contracts.
Shaun Clisby Kelley: And the new NBA contract and my question is simply.
Speaker Change #126: Do we see an increase in pricing that is kind of a onetime movement I E are you changing the contractual rates with your customers that move up and is going to be recognized as sort of the data as we see the data rights come in or is a little bit more or is everything more revenue share and that'll kind of.
Speaker Change #127: So we should see continued commensurate growth is what we're seeing now as we move out into the latter part of the year and more into 2025.
Carsten Koerl: Hi Shaun. So, Ms. Carsten, the core thing here is looking now at the existing model, which we have in the U.S., its revenue share, as we all know. So, we will grow with the market for the existing product. I think it will never work to overstretch the pricing.
Speaker Change #128: Hi, Sean.
Speaker Change #128: Carsten.
Speaker Change #129: The core thing here is looking now today existing models, which we have in the U S. Its revenue share as we all know somebody will grow with the market for the existing products.
Speaker Change #130: I think it will never group to overstretch to pricing, we kind of need to create value with innovative solutions, which are providing that value for our clients, which is a perfect example, so we can simply generate higher profits than our clients can do this was ingesting more data into the engine and helping them.
Carsten Koerl: We're going to need to create value with innovative solutions that provide that value back for our clients. Alpha Alt is a perfect example, so we can simply generate higher profits. Then our clients can do this by ingesting more data into the engine and helping them to uplift it. So, that's the way we see a lot of growth potential. Foresight is a sample where we can use MBA. We are working here with Delete Plus to give you a number.
Speaker Change #130: To uplift it so thats the way we are we see a lot of growth potential for sides as the software, where we can use MBE H b.
King: King here with the lead us to give you a number.
Carsten Koerl: On the league bus, for the more than 600 matches which we played out there with the solution, we had an engagement rate of 3.7%, meaning 3.7% of all the people who had seen this were going into a transaction. This is, from a marketing purpose or marketing view, a sensational rate. Usually, the rate is significantly lower than 1%.
Speaker Change #132: On the lead us for the more than 600 matches, which replace played out there with the solution. We have an engagement rate of three 7%, meaning three 7% of older people, which had seen this going into a transaction. This is from a marketing proposal.
Carsten Koerl: That is a 300% uplift for the users of the league bus and for the operator who is providing the odds here. That's generating pure value for all the players, and that is very powerful.
Speaker Change #133: <unk> Q, a sensational rate usually the rate is significantly lower than 1% that is a 300% uplift for the users and.
Speaker Change #133: And for the operator, who is providing.
Speaker Change #133: Providing thoughts here, that's generating pure value for all the players. This is very powerful looking now until yes. We have a good situation. We are sitting on three of the big four leaks in the U S with by far the biggest client base and distribution base that we can leverage a little bit on the pricing, but our core.
Carsten Koerl: Looking now into the future, yes, we have a good situation. We are sitting on three of the big four leagues in the U.S., with by far the biggest client base and distribution base there. We can leverage a little bit on the pricing, but our core focus is to create value with new products, which I mentioned.
Speaker Change #133: Focus is to create value with new products, which I mentioned a few of them.
Shaun Clisby Kelley: Perfect. Thanks, Carsten. And then my follow-up would just be on Brazil. You obviously mentioned this.
Speaker Change #134: Perfect. Thanks, Carsten and then my follow up would just be on Brazil.
Speaker Change #135: Obviously mentioned.
Speaker Change #136: The experience when a new significant new market like this opens up or moves into regulatory are you already in Brazil or should we expect a bigger step function as youre able to do deals with maybe operators that you haven't done deals with before thanks.
Carsten Koerl: And what's your experience when a new, a significant new market like this opens up or moves into regulatory compliance? Are you already in Brazil? Or should we expect a bigger step function as you're able to do deals with, maybe, operators that you haven't done deals with before? Thanks.
Okay.
Speaker Change #137: Personnel at the Air show on three weeks ago, So they experienced board.
Carsten Koerl: I was personally there, Shaun, three weeks ago. So the experience was interesting with five bodyguards in Sao Paulo, which we had on the ground. It's a wide market. It's a very exciting market. By the way, all these security measures which were there were not necessary.
Speaker Change #138: Well, it's interesting boost five BODYGUARDS and Sao Paulo, which we have there underground it's a wide market. It's a very exciting market by the way it was not necessary. All this security measurements, which has been very friendly environment pizza.
Carsten Koerl: Very friendly environment, people who are very passionate about the sport. The main sport there is, as we all know, soccer. A lot of development opportunities, a lot of activities. The federal government licensed or liberalized sports betting in December.
Speaker Change #138: Passionate followup to support main sport there is as we all know soccer a lot of development opportunities a lot of activities.
Speaker Change #139: Federal government license to our little rock sports betting in December So in June we will see in our process starting the first operators get official license generate taxes for the state and it was very important for me to speak their Mozilla stakeholders Finance Ministry speaking with the sport with three.
Carsten Koerl: So in June, we will see a process start where the first operators get official licenses and generate taxes for the state. And it was very important for me to speak there with all stakeholders, the finance ministry, speak with sport, with representatives from the club and from the leagues which are there. And then, of course, speak with the operators, the foreign operators and the local operators which are both on the ground.
Speaker Change #139: Percentages from the club and from the leaks, which are there.
Speaker Change #139: And then of course speaking with the operators to foreign operators and local operators, which are at the airports on the ground understanding their needs is essential to create the right setup. We have people team down there already we have a legal set up there and we are in western and up market opportunity looking for.
Carsten Koerl: Understanding their needs is essential to create the right setup. We have a people team down there already. We have a legal setup there, and we are investing in that market opportunity. Looking from a size perspective, we believe that this is growing from a 2 billion GGR to round about 5 to 6 billion in the next three years. It's early days, as I said, and we are coming up with the complete strategy. But we are very interested in expanding our footprint in Brazil and using this growth opportunity.
Speaker Change #139: From a size perspective, we believe that this is growing from a 2 billion GTR to round about a $5 to $6 billion in the next three years. It's early days as I said and we are coming up with the complete strategy, but we are very interested to expand our footprint in Brazil and to use this growth opportunity.
Shaun Clisby Kelley: Thank you, everyone, and good luck here. I appreciate the time.
Speaker Change #139: Okay.
Speaker Change #140: Thank you everyone and good luck here I appreciate the time.
Jim Bombassei: Thank you. We want to thank everyone for joining our earnings call. Michelle, I'll turn it back over to you.
Speaker Change #141: Thank you we want to thank everyone for joining our earnings call Michelle I'll turn it back over to you.
Michelle: Thank you.
Operator: Thank you, everyone, for your participation. This does conclude the program, and you may now disconnect. Everyone have a great day.
Michelle: Thank you everyone for your participation. This does conclude the program and you may now disconnect everyone have a great day.
Michelle: Okay.
Michelle: [music].
Michelle: Okay.
Michelle: Okay.
Michelle: [music].
Michelle: Okay.
Michelle: Okay.
Michelle: [music].
Michelle: Yes.
Michelle: Yes.
Michelle: [music].
Michelle: Okay.
Michelle: [music].
Michelle: Okay.
Michelle: [music].
Michelle: Okay.
Michelle: Yes.
Michelle: [music].
Michelle: Yes.
Michelle: Yes.
Michelle: [music].
Michelle: Yes.
Michelle: [music].
Michelle: Okay.
Michelle: [music].
Michelle: Okay.
Michelle: [music].
Michelle: Yes.
Michelle: [music].
Michelle: Okay.
Michelle: Okay.
Michelle: [music].
Michelle: Yes.
Michelle: Okay.
Okay.
Michelle: Yes.
Michelle: [music].
All right.
Michelle: <unk>.
Michelle: [music].
Michelle: Okay.
Michelle: Okay.
Michelle: [music].
Michelle: Okay.
[music].
Michelle: Okay.
Michelle: Yes.
Michelle: Yes.
Michelle: Yes.
Michelle: [music].
Michelle: Okay.
Michelle: Okay.
Michelle: [music].
Michelle: Okay.
Michelle: [music].
Michelle: Yes.
Michelle: Okay.
Michelle: Sure.
Michelle: Uh huh.