Q3 2025 Gambling.com Group Ltd Earnings Call
Gambling dot com group's cofounder and Chief Executive Officer, and Elliot Mark <unk>, Chief Financial Officer.
This call is being webcast live through the Investor Relations section of our website at gambling Dot com forward slash corporate forward slash investors and a downloadable version of the presentation is available there as well a webcast replay will be available on the website. After the conclusion of this call you may also contact investor release.
Speaker #3: Odds recently announced a sports Pragmatic Play , deal with international platform provider . Optic odds will We pragmatic offering by enhancing US player prop coverage .
Speaker #3: a In short , we are offering more betting expand market tools to an trading expanding client data and to enhanced base thanks distribution .
<unk> supported by Emailing investors at GTC group Dot Com I would like to remind you that the information contained in this conference call, including any financial and related guidance to be provided consists of forward looking statements as defined by securities laws. These statements are based on information currently available to us and involve risks and uncertain.
Speaker #3: Another exciting the Optic God's business clear aspect of can odds , create for we firms trading on prediction value . This markets growing rapidly and currently includes a number Wall business is of Street's most well-known as well as the market making arms of Calci and Polymarket themselves expect .
Ts that could affect actual future results performance and business prospects and opportunities to differ materially from those expressed in or implied by these statements.
Some factors that could cause such differences are discussed in the risk factors section of <unk> Dot Com group's filings with the Securities and Exchange Commission forward looking statements speak only as of the date. The statements are made and the company assumes no obligation to update forward looking statements to reflect actual results changes in assumptions or changes in <unk>.
Speaker #3: a We market prediction to . ecosystem firms , significantly larger addressable market and national advantages over state sports prediction betting markets are additive .
Speaker #3: a new As in the US , not a substitute for sports as we it , which know will no given the still thrive given doubt its simpler and more accessible category products believe that our optimized solution is uniquely positioned to assist market therefore the well growth of prediction makers and markets they as monetize options for expand want to create .
Other factors affecting forward looking information, except to the extent required by applicable securities laws.
During the call. There will also be a discussion of non <unk> financial measures a description of these non <unk> financial measures is included in the press release issued earlier this morning, and reconciliations of these non <unk> financial measures to their most directly comparable <unk> measures are included in the appendix to the.
Speaker #3: better payouts and sophisticated with fewer gimmicks . Given the long runway we have for consistent growth in services our source believe that this exciting future will be the core of GAM .
<unk> and press release, both of which are available in the investors tab of our website.
Speaker #3: Having said data that , we sector marketing leading business , we to our We 2026 and in beyond , throw off more than enough which will to continue to invest our sports in services data offering and retain cash for us deploy capital to create shareholder value .
I'll now turn the call over to Charles.
Thank you Pete good morning, and thank you for joining our third quarter 2025 conference call. When we generated record third quarter revenue and adjusted EBITDA with revenue rising, 21% and adjusted EBITDA growing 3% year over year.
Speaker #3: congratulate everyone working on our I'd like to business for winning the affiliate of EGR award for an unprecedented third time in October . We are simply unequaled in our success in the gambling online affiliate industry operated a search business at the highest levels of marketing success nearly two for decades , we remain confident that the underperformance of the marketing business is recent overwhelmingly driven by short term .
Our sports data services business grew over 300% year on year in the third quarter.
Our marketing business was flat year on year as a result as revenue was held back by less favorable search rankings as previously discussed that persisted for the entire third quarter.
As has been the case since July and Google search algorithms continue to generously favor low quality spam content in the gaming space and particular outside the U S. However.
Speaker #3: addressed following Elias's review of the third quarter . Financial map details . out how I will we expect to to growth return in the marketing business Having Thank you .
However, since late October the search marketing dynamics have started to improve for us.
Our sourcing and our services business continues to outperform our expectations with another quarter of strong growth driven by enterprise sales sustained strong growth in <unk> services is increasingly in the future of Gan, given our attractive offering I mean multibillion dollar Tam in front of us.
Speaker #3: Charles .
Speaker #4: Third quarter revenue grew 21% year over year . Q3 to record of 39 million . Sports Data Services revenue quadrupled 9.2 million in the to seasonally slower third quarter .
Speaker #4: Subscription revenue was 24% of total revenue , inclusive of revenue share arrangements in marketing business . Recurring revenue was 49% of total third quarter revenue .
I will therefore start todays call by laying out the opportunity that we see within sports data services, our fastest growing segment.
Speaker #4: marketing business Our continues to be impacted by low quality in the results search gaming space , primarily our outside of the discussed as a result , marketing revenue was flat and 101,000 were year down .
Through a combination of acquisitions and great execution, we have created a fast growing sports data services business out of nothing which delights, both enterprise and consumer clients and is already responsible for 25% of our 2025 revenue.
Speaker #4: 13% year over profit Gross Cost of sales to of 3.4 million , compares increased NDCs of 35.6 million . ago period , reflecting costs with the associated acceleration of our of traffic sources .
The tight product market fit we have gives us confidence that there is a straightforward path for sustainable and highly predictable growth for this business.
Sports betting operators are increasingly in reviewing the cost side of their businesses, particularly in markets, which are not growing like they used to.
Our next generation data platform delivers comprehensive premium data services at a competitive price point, enabling go startup and scale of the operators to take costs out of their businesses, while potentially improving their offerings.
Speaker #4: strategy for the marketing Diversification cost sales of from the business and acquired and optics businesses . Gross margin profit 91.2% , compared was to period 94.7% in the year ago .
We expect this business to finish 2025 strong and to continue to grow organically at a healthy pace in 2026 and beyond.
Speaker #4: expenses , adjusted for fair value movements and Operating acquisition and restructuring expenses , grew related 30% to 25.7 million . This growth is primarily associated with added headcount from from this the year's , higher marketing costs associated with traffic acquisitions source diversification and increased share payment expense , headcount outside the acquired businesses flat is year to date .
The fastest growing part of our <unk> services business is off the gods, our enterprise solution for sports book operators.
After guidance third quarter revenue doubled year over year, reflecting growth in both customers and revenue per customer.
Off the gods began by providing multi operator ards data from around the world to the trading teams and sports betting operators to use as an input to their risk management processes like a bond trader would use a bloomberg terminal to understand the bond market.
Speaker #4: keeping a While very keen eye on cost control by optimizing our operating teams and adopting our work processes , we AI in invest continue to in product development and diversification strategies that believe will power growth in the coming years we .
We have expanded the products and now also provide bet settlement services, which is now live with multiple customers.
Speaker #4: Adjusted EBITDA grew 3% to 13 million . Adjusted EBITDA margin of 33% , compared to 39% in the year ago period , reflecting the higher cost of and marketing expenses sales associated with our traffic diversification .
Operators can now rely on optic out doesn't end to end solution to power, both pricing and that settlement.
<unk> and our best settlement services support for the dynamic pricing of same game Parlays and we are investigating adding on early cash out functionality.
Speaker #4: strategy Adjusted net income and net income per adjusted share for the third quarter fell 16% from the year ago period to 9.3 million and $0.26 , respectively , primarily because of increased interest expense , free cash flow was 9.6 million , reflecting strong cash conversion from adjusted EBITDA of Free 74% .
<unk> has also partnered with specialists odds providers like <unk> and <unk> networks to plug into our open onto the marketplace, where our operator clients can easily subscribe to additional third party data services and get delivery through the optic odds feed creating additional value for our customers and enhancing our <unk>.
Speaker #4: cash flow down was from 14.2 million in the year ago period . As a result of timing differences in where we saw an 2024 , atypically Q3 strong following an atypically weak Q2 at the end of the quarter , we had total cash of 7.4 million , and we had 70.5 million of undrawn capacity on our facility credit during the quarter , we acquired spotlight Vegas , which included a payment of 8 million before working capital adjustments .
<unk> distribution.
<unk> was founded by Americans with an initial focus on American sports.
We continue to rapidly expand the on state are offered on the platform to cater to sports betting operators around the world and year to date, we have added 10 sports 350 leagues and over a thousand different betting markets to the optic is offering.
<unk> recently announced a deal with pragmatic play a leading international platform provider after God's will expand pragmatic players offering by enhancing U S player prop market coverage.
Speaker #4: also We made interest and term loan repayments of 3.4 million and 5.6 million , in the quarter . And we repurchased approximately 562,000 shares for a total consideration of 4.7 million .
In short, we are offering more ards data and trading tools to an expanding client base, thanks to enhance distribution.
Another exciting aspect that would be off the cards business is the clear value, we can create for firms trading on prediction markets.
Speaker #4: date , we have Year to acquired 672,000 shares for total consideration of 5.6 million , and we have 14.4 million remaining with our share authorization buyback , we continue to strong free cash generate flow , which , together with our healthy balance sheet and undrawn credit continues to provide us the flexibility to facilities , optimize our capital structure with shareholder and value .
This segment of the business is growing rapidly and currently includes a number of wall Street's, most well known firms as well as the market, making arms of coffee and poly market themselves.
We expect a prediction market ecosystem to become significantly larger given the national addressable market and some advantages over state regulated sports betting.
Speaker #4: This morning , we revised our full year guidance to revenue of approximately 165 million and adjusted EBITDA of approximately 58 million . The change in guidance reflects the continued headwind of poor search dynamics , which affected all of Q3 while .
Prediction markets are additive as a new category in the U S. Not a substitute for sports betting as we know it which will no doubt still thrive given its simpler and more accessible products.
We believe that our I'll say God solution is uniquely well positioned to assist market makers and therefore monetize the growth of prediction markets as they expand options for sophisticated consumers, who want to create risk exposure with better payouts and fewer gimmicks.
Speaker #4: recently somewhat recovering , persists in Q4 . During our Q2 And expected Google's anti-spam team to make more progress bad against actors than we have seen to date .
Given the long runway, we have for consistent growth in our source data services business. We believe that this exciting future we will be the core of the game.
Speaker #4: When Google addresses these quite objectively and serious quality frankly problems search results , we will immediately meaningful revenue which see flows straight through to improvement adjusted EBITDA .
Having said that we expect our sector, leading marketing business to grow in 2026, and beyond which will throw off more than enough cash for us to continue to invest in our source data services offering and retain firepower to deploy capital to create shareholder value.
Speaker #4: Our revised also guidance 1 million in higher approximately cost of sales than previously anticipated , related to the successful acceleration traffic of our diversification strategy , the midpoint of the revised guidance represents growth , the midpoint of the revised adjusted EBITDA guidance reflects 30% year over year 19% year over year growth .
I'd like to congratulate everyone working on our marketing business for winning the ECR affiliate of the year Award for an unprecedented third time in October we.
We are simply on equals and our success in the online gambling affiliate industry.
Speaker #4: Our guidance assumes an average euro to USD exchange rate of 115 for the year . I will now turn the call back to Charles for a review of the work we're doing diversify to and expand marketing business .
Having operated a search marketing business at the highest levels of success for nearly two decades, we remain confident that the recent underperformance of the marketing business is overwhelmingly driven by short term temporary search dynamics, which will be addressed.
Speaker #3: Thank you Elias . our We tremendous continue to see value in our far exceeds the business that marketing currently value being ascribed to it by the public markets .
Following <unk> review of the third quarter financial details I will map out how we expect to return to growth in the marketing business.
Speaker #3: The perception gap is due to the fact that the marketing business has already been transformed from a SEO business into pure a diversified marketing engine , which is less reliant SEO on ever before .
Thank you Charles.
Third quarter revenue grew 21% year over year.
Q3 record of $39 million.
Cost of services revenue tripled to $9 2 million in the seasonally slower third quarter.
Speaker #3: Our push into than non channels has SEO succeeded and is already evident in our year to date results . In Q4 , we expect to generate more revenue from non channels than SEO for the first time .
Subscription revenue was 24% of total revenue.
And can you see all of the revenue shadow arrangements in our marketing business recurring revenue was 49% of total third quarter revenue.
Speaker #3: As a public company , and as these non SEO channels scale further , the economics become increasingly attractive . I think the best is yet to come as our marketing business is well positioned to uniquely drive growth in an exciting new line of business .
Our marketing business continues to be impacted by low quality stocks yourselves in the gaming space, primarily outside of the U S. As we have discussed.
As a result marketing revenue was flat and DCF of 101000 went down 13% year over year.
Speaker #3: We plan to launch in Q1 , which further will diversify our offerings . My positive tone today reflects the fact that my senior leaders and I are excited about genuinely both our fast growing sports data services business and the future of the marketing business the .
Gross profit increased 17%.
It's $75 6 million.
Cost of sales of $3 4 million comparison cost of sales of $1 7 million, India got periods, reflecting costs associated with the acceleration of.
Speaker #3: we however are , , behind where we and our thought we would analysts be this On , and as a result , the share has come substantial under price pressure .
Our traffic sources more syndication strategy for the marketing business and cost of sales from the acquired <unk> and.
Speaker #3: This recent price action seems to suggest the marketing business is dead or that it is dying, a position which is simply unsupported by the facts.
Optical businesses.
Gross profit margin was 91, 2% compared to 94, 7% in the yoga period.
Speaker #3: As we produced 13 million in adjusted EBITDA and nearly 10 million in free cash flow in the quarter , despite having one hand tied behind our back from short term search dynamics .
Operating expenses adjusted for fair value movements in acquisition and restructuring.
<unk> expenses include 70% to $25 7 million.
Speaker #3: Furthermore, our business is now more resilient than ever, thanks to two years of successful execution against our plan to diversify away from SEO.
This growth is primarily associated with added head count from the attack from this year's acquisitions.
Higher marketing costs associated with traffic source diversification and increased share based payment expense.
Speaker #3: While the full SEO remains in recovery front of us , we are now past the worst of the short term challenges and off the low point of the last several months .
Head count outside of the acquired businesses is flat year to date.
Speaker #3: Even though SEO is a smaller part of our future , there is still substantial the upside to current run rate of the SEO of our marketing business .
While keeping a very keen eye on cost control by optimizing our operating teams and I don't think AI in our work processes. We continue to invest in product development and diversification strategies that we believe will power growth in coming years.
Speaker #3: We consider the company's current market valuation simply wrong and have a sizable authorization for share repurchases . In we are using effect , which .
Speaker #3: All in all, our diversification initiatives have already resulted in both a fast-growing new sports data services business and a resilient marketing business that we expect will grow in 2026 and continue to throw a strong free cash flow for years to come.
Adjusted EBITDA grew 3% to $30 million.
Adjusted EBITDA margin of 33% compared to 39% in the period, reflecting the higher cost of sales and marketing expenses associated with that traffic diversification strategy.
Speaker #3: Operator, we will open up the floor for questions.
Adjusted net income and adjusted net income per share for the third quarter down 16% from the year ago period to $9 3 million and 26%, respectively, primarily because of increased interest expense.
Speaker #1: you . If Thank you would like to ask a question , please press star one on your telephone keypad . A confirmation tone will indicate your line is in the question queue .
Speaker #1: You may press star two . If you would like to remove your from the question queue for a participant using speaker equipment , and may be necessary to pick up your handset before pressing the star keys .
Free cash flow was $9 6 million, reflecting strong cash conversion from adjusted EBITDA of 74%.
Speaker #1: One moment while we poll for questions. Our first question is from Ryan Siegel with Capital Group. Craig-Hallum, please proceed.
Free cash flow was down from $14 2 million in the year ago period, as a result of timing differences in 2024.
On a typically strong Q3, following a typically weak Q2.
Speaker #5: morning Hey , good guys . I want to stay on Google search . Just given the impact results the transitory impact of the and kind of business right now .
At the end of the quarter, we had total cash of $7 4 million and we had 70 and a half million dollars undrawn capacity on our credit facility.
Speaker #5: I gives you confidence what to step out on a ledge with confidence and say your position to grow that business in 2026 ? you Specifically , I know gave some comments , but guess secondly , to that or more I specifically , has Google changed their algorithm where seen rankings you've actually start to change ?
During the quarter, we acquired spotlight that Vegas, which included a payment of $8 million before working capital adjustments.
We also made interest in term loan repayments of $3 4 million and $5 6 million respectively.
Speaker #5: Or have you refined internally to to make things better ? But what exactly has happened in recent weeks that gives you that confidence guys ?
In the quarter and we've repurchased approximately 562000 shares.
For total consideration of $4 $7 million.
Speaker #3: Hey , Ryan . So end of October , some of these spammy results started to get thinned out . Rankings improved . We saw better rankings .
Year to date, we have acquired 672000 shares for total consideration of $5 6 million.
And we had $14 4 million remaining with our buyback authorization.
Speaker #3: We saw better traffic , and we immediately saw more revenue . So , you know , Google search is still working . Exactly in the way it is .
We continue to generate strong free cash flow, which together with our healthy balance sheet and Undrawn credit facilities continues to provide us with the flexibility to optimize our capital structure and shareholder value.
Speaker #3: Frankly , always worked . You know , I know we talked a lot about AI headwinds on the Q2 call . I think , you know , we you know , maybe over , over , you know , put a little too much emphasis on that .
This morning, we revised our full year guidance to revenue of approximately $165 million and adjusted EBITDA of approximately $58 million.
Speaker #3: You know , the reality of the situation right now is that this is absolutely a business as usual search situation . It's not with AI .
The change in guidance reflects the continued headwind of poor such dynamics, which affected all of Q3 and well recently somewhat covering persist in Q4.
Speaker #3: It's just rankings . At the end of the day . And as seen rankings come back , it is we've immediately translated to revenue as we would have to .
Speaker #3: expected it that gives us , you know , great confidence that , you know , frankly , it is business as usual with Google .
During our Q2 call, we expected google's anti spam team to make more progress against that actors than we have seen to date.
Speaker #3: And , you know , we've always managed to get past any sort of ranking challenges in the past . And I don't have any any doubt that this time will be different .
When Google addresses these quite objectively and frankly experienced quality programs, but as such results. We will immediately see meaningful revenue improvement, which goes straight through to adjusted EBITDA.
Speaker #3: But it is little bit a what is different is it's a little bit more dependent on Google than us . You know , we're not I'm not this time responsible for clearing the spam out of the results .
Speaker #3: That's search obviously the search engines that job , you know , we and there's that possibly certain Google people have telegraphed that there could be a , you know , another update coming end of the Google year in December .
Our revised guidance also includes approximately $1 million in the higher cost of sales than previously anticipated for later.
To the successful acceleration of our traffic diversification strategy.
The midpoint of the revised guidance represents a 30% year over year growth.
Speaker #3: And the focus of that update could be on us dealing with some of this , these sort of spam results . And , you know , therefore we , you know , in general expect this to come back around .
The midpoint of the revised adjusted EBITDA guidance reflects 19% year over year growth.
Our guidance assumes an average euro to USD exchange rate of 115 for the year.
Speaker #3: And we have reason to believe , you know , it could meaningfully change in December if not before December . You know , it .
I will now turn the call back to Charles for a review of the work, we're doing to diversify and expand our marketing.
Speaker #3: This has taken longer than it normally takes . Obviously , that's affected our results and guidance today . But we don't have any reason to anything believe that is fundamentally changed
Thank you Elliot we continue to see tremendous value in our marketing business that far exceeds the value currently being ascribed to it by the public markets and the perception gap is due to the fact that the marketing business has already been transformed from a pure <unk> business into a diversified marketing engine.
Speaker #5: Helpful . Thanks ,
Speaker #5: . Data services big focus . Great growth . A lot of opportunity . Appreciate the comments there on the B2B side , certainly seems like a lot of momentum .
Which is less reliant on SCO than ever before.
Our push into non SCO channels has succeeded and is already evident in our year to date results.
Speaker #5: markets and predictions . I want to actually ask about the side , which B2C historically was the bigger part of that business . But has that continued to grow ?
In Q4, we expect to generate more revenue from non SCO channels, then SCO for the first time as a public company.
Speaker #5: Is that an emphasis ? And then what are you guys working on specifically odd jam side ? Thanks .
And as these non SCO channel scale further the icon economics become increasingly attractive.
Speaker #3: Yeah on the , revenue year on year in the consumer data services . that So includes , you know , B2C , Rotowire and B2C Ausgem grew marginally proforma growth on a like for basis like year to date is around 10% .
I think the best is yet to come as our marketing business is uniquely well positioned to drive growth in an exciting new line of business. We plan to launch in Q1, which will further diversify our offerings.
My positive turn today reflects the fact that my senior leaders and I are genuinely excited about both our fast growing sports data services business and the future of the marketing business on.
Speaker #3: The third quarter was affected by the launch of the refreshed Rotowire product, where we are focused on improved optimizing customer lifetime value. This has come at the expense of short-term revenue, which we have historically seen, with substantial spikes in revenue from that business at the very beginning of the football season due to the way that they used to monetize the apps.
On the marketing side, we are however.
Behind where we and our analysts thought we'd be this year and as a result of share price has come under substantial pressure.
This recent price action seems to suggest that the marketing business is dead or dying.
Speaker #3: Now we're you know , we have subscriber numbers for wire up , 20% , 21% year on year . And that's on a much better , much higher estimates of of subscriber LTV .
<unk>, which is simply unsupported by the facts as we produced $13 million and adjusted EBITDA in nearly 10 million in free cash flow in the quarter. Despite having one hand tied behind our back from a short term search dynamics.
Speaker #3: So we're well positioned with that business to to from this point forward . And grow October , also in Ausgem added some new features which analyzed the liquidity across prediction markets and betting exchanges to identify where the sharp money is and so that their users can kind of themselves alongside that .
Furthermore, our business is now more resilient than ever thanks to two years of successful execution against our plan to diversify away from SCO.
Celesio recovery remains in front of US we are now past the worst of the short term challenges and off the low point of the last several months, even though I say it was a smaller part of our future. There is still substantial upside to the current run rate of the SCO side of our marketing business we.
Speaker #3: position That smart money and that product has been an immediate hit . It's driving growth in Rpu and new users . And as a perfect example of how we're we keep with innovating that product to to drive growth through added features .
We consider the company's current market valuation simply wrong and have a sizable authorization for share repurchases in effect, which we are using.
Speaker #5: Thanks , Charles . I can attest I've tried your short money product . It is fantastic . Good luck guys .
All in all our diversification initiatives have already resulted in both a new fast growing sports data services business and a more resilient marketing business that we expect will grow in 2026 and continue to throw out a strong free cash flow of 40 years to come.
Speaker #3: Great to hear . Thanks , Ryan .
Speaker #1: Our next question is from Jeff Stanton Stifel . with Please proceed .
Speaker #5: Hey , great .
Speaker #6: Thanks for taking questions . Morning , Charles my Elias . Maybe , you hanging on know , question , Ryan's second but switching to more the to the side of data of the services business .
Operator, we will open up the floor for questions.
Thank you if he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment may be necessary to pick up your handset before pressing the star keys.
Speaker #6: Charles , can you just a little give us bit more color on , you know , progress to date on optical what inning are commercialization , you in of having that new sales team , you know , attack sort of some of the in opportunity Europe , bring more customers into trial .
One moment, while we poll for questions.
Speaker #6: know , what's what's been the conversion You rate on on those trials , just any sort of metrics or additional color that could help us think about sort of what point on the j-curve today would you're at be , would be helpful .
Our first question is from Ryan <unk> with Craig Hallum Capital Group. Please proceed.
Hey, good morning, guys.
Speaker #6: Thanks
I wanted to say a Google search just given the impact of results in kind of a transitory.
Speaker #6: .
Speaker #3: Yeah . mean , as I I said in the prepared remarks , we've got , tight you know , product market fit the with offering .
The business right now I guess, what gives you confidence to step on a ledge with confidence that they are positioned to grow that business in 2026.
Speaker #3: We have today with optical there's a . I think very clear and long runway to grow the business just with that offering . Now , having said that , you know , we've got a team great there .
Specifically I know you gave some comments, but I guess secondly to that or more specifically at Google changed their algorithm, where you've actually seen rankings start to change or if you guys are find internally too.
Speaker #3: They're very ambitious and very keen to build up additional and features expand the capability of the product . As we all are . And , I you know , so when you look think out over 26 , 27 , there's a there's a lot of opportunity there beyond just pure data and that settlement , you know , there's an entire kind of category of services called managed trading services .
Make things better, but what exactly has happened in recent weeks that gives you that confidence.
Hey, Ryan.
So towards the end of October.
Some of these spanning results started to get send out rankings improved as we saw better rankings, we saw better traffic and we immediately saw more revenue so Google.
Google search is still working exactly the way it is frankly always works.
Speaker #3: know You , some people call that sports book operations , but you've got , you know , personalization of content , player profiling , active risk bet management , acceptance .
I know, we talked a lot about AI headwinds on the Q2 call I think.
We you know maybe ever ever.
Speaker #3: whole There's a kind of suite of problems that need to be solved before you get to being a platform provider . You know , we don't want to do that .
It puts a little too much emphasis on that you know the reality of the situation right. Now is it is absolutely a business as usual search situation.
Speaker #3: That I think operators need to do that themselves . They need that last step where the UI touches the user . I mean , that's that's the critical place where an operator differentiates their offering .
It's not anything to do with AI. It's just rankings at the end of the day and as we've seen rankings come back. It is immediately translated to revenue as we would've expected it to so that gives us great confidence that.
Speaker #3: But kind of everything behind the scenes , especially risk around management , that acceptance is very interesting to And , you know , I think it us .
Frankly, it is business as usual with Google and we've always managed to get past any sort of ranking challenges in the past and I don't have any any doubt at this time will be different but it is.
Speaker #3: was Bezos that said your your margin is my opportunity . There's a quite a lot of margin out there between sportradar and Genius and others that are doing very well with this category .
A little bit.
Is it different this time, because it's a little bit more dependent on Google than US you know, we're not I'm not responsible for clearing the span out of the search results. That's obviously the search engines at chop.
Speaker #3: And , you know , I think we've just got the the team , the tools and the platform to to be extremely competitive and in more than just data and bet settlement .
And we think that there's a.
Possibly that Google certain Google people have telegraphed that there could be a.
Speaker #3: So that's , that's where our heads are at . When you look at the next kind of 1 to 2 years .
You know another update coming end of the year in December and the focus of that update could be on.
Speaker #6: That's great . Thanks for that . And switching gears , can you just help us think a little bit on I know you're not providing formal guidance quite yet , but just margin side of on the Just things .
Dealing with some of this sort of spam results and therefore.
We.
In general I expect this to come back around and we have reason to believe it could meaningfully change in December if not before December this has taken longer than it normally takes obviously that's.
Speaker #6: Just how to think about directionality here as we head into 2026. Cost of sales are starting to tick a little bit higher on some of these adjacencies in the marketing business. I think you touched on it in the prepared remarks.
Our results and guidance today, but we.
Speaker #6: That's , you know , going to be a bit of an investment mode before you start to realize the benefit of leverage on that .
We don't have any reason to believe that anything is fundamentally changed.
Speaker #6: But just can you , can you give us a sense of sort of puts and takes and how to think about margins , maybe relative your historical guidance as we as we start to look at the 2026 .
Thanks, Joe.
<unk> services Big focus great growth.
On a opportunity I appreciate kind of the comment there on the <unk> side, certainly seems like a lot of momentum in core markets and predictions I wanted to actually ask about the beat T side, which historically, what's the bigger part of that business, but has that continued to grow is that an emphasis and then what are you guys working on specifically.
Speaker #4: Yeah , I think before we look into 26 . And you're right , we're not giving formal guidance here . But but if you talking points I think would be helpful for everyone .
Speaker #4: But before we get into that , it's important to to kind of highlight what Charles said earlier that we think we are through the worst of the SEO challenges and our SEO efforts are really bearing fruit faster than planned .
On the odd jam side. Thanks.
Yeah.
Revenue year on year in the consumer data services.
That includes a b.
<unk> and <unk> grew marginally.
Speaker #4: So we we are we are a high degree of confidence that we are both on that and right path here . we're on the So this means that we expect to see kind of mid-teens growth in revenue and .
Our pro forma growth on a like for like basis year to date is around 10% of the third quarter was affected by the launch of the refresh roto wire products, where we are optimizing for improved customer lifetime value at the expense of short term revenue.
Speaker #4: Around 10% adjusted EBITDA growth or even growth quarter on mid-teens quarter from Q3 to Q4 . Our updated guidance implies revenue of 46 million for Q4 , which will be by far the biggest quarter in the company history .
Which we have historically seen substantial spikes in revenue from that business at the very beginning of football season due to the way that they use to monetize the apps.
Now we are.
Speaker #4: Just to illustrate that that , you know , we think that although we're not where we thought we would be at the beginning of the in a year , we're healthy place and we have bottomed out .
We haven't.
Subscriber numbers for auto are up 20% and 21% year on year and.
That's on a much better.
Much higher estimates of of a.
Speaker #4: If we turn into 2026 , we expect to see overall revenue growth low in the with a sports data services business continue to lead the way .
Subscriber LTV, so were well positioned with that business too.
To grow from this point forward and also in October <unk> added some new features which analyzed the liquidity across prediction markets and betting exchanges to identify where the sharp money is.
Speaker #4: We expect marketing to grow at a rate in the low teens and for sports data services to the high grow in teens would be to see in the high and B2B above 20% .
And so that there you can kind of position themselves alongside that smart money in that.
That product has been an immediate hit it's driving growth in <unk> and new users in.
Speaker #4: And if we if we look at at our business , marketing non our SEO se marketing business continues to scale the contribution margin becomes more attractive in the non SEO channels .
A perfect example of how are you.
We keep innovating with that product to drive.
Growth through added features.
Thanks, Charles I can attest that tried your shirt money product with its fantastic.
Good luck guys.
Great to hear thanks, Ron.
Speaker #4: And that also carries much fewer fixed costs compared to the traditional SEO business . All in all , we expect to maintain overall adjusted EBITDA margins in the mid 30s as we see on the run rate basis .
Our next question is from Jeff <unk> with Stifel. Please proceed.
Okay, great. Thanks for your questions Good morning, Charles maybe.
Hanging on Ryan second question, but switching more to the to the enterprise side.
The data services business, you know Charles could you just give us a little bit more color on.
Speaker #4: So in Q3 , our EBITDA margin was 33% . Our Q4 guidance looks towards 33 , 34% . I think thats pretty indicative for for our expectations for for 2026 .
Progress to date on optic odds commercialization sort of what inning are you in of having that new sales team.
A tax or does some of the opportunity in Europe bring more customers into trial.
Speaker #6: Thanks very .
Speaker #7: Much .
What's been the conversion rate on those trials, just any sort of additional metrics or color that can help in thinking about sort of what point on the J curve you are at today would be would be helpful. Thanks.
Speaker #1: Our next question is from Barry with Jonas Truist Securities. Please proceed.
Speaker #8: Hey guys . Some of the data said they're providers have ready yet not to work with prediction Curious to markets . what extent that impacts your opportunity or strategy today ?
Yeah, I mean as I said in the prepared remarks, we've got you know.
Light product market fit with the <unk>.
<unk>, we have today with optic odds I think theres, a very clear and long runway to grow the business just with that offering now having said that.
Speaker #8: .
Speaker #3: Hey , Barry , it's it definitely , positively impacts us . I mean , you're right . I think some of the big names out there are taking a extremely cautious approach to the category , which means , you know , if you're a market maker , literally you can't buy data from people at the certain moment .
We've got a great team there, they're very ambitious and very keen to build additional features and expand the capability of the products as we all are and so I think when.
When you look.
Speaker #3: We've got , as I said , on the prepared remarks , you know , quite a quite an interesting business developing there . A lot of the market makers , both on Wall Street , you know , traditional kind of Wall Street market which are active makers , on markets .
Out over 'twenty six 'twenty seven.
There's a lot of opportunity there beyond just pure data in that settlement. There was an entire kind of category of services called managed trading services.
Speaker #3: prediction the And then prediction market , you know , kind of native prediction market companies , if you will . You are , you know virtually all clients of the data services business , not necessarily not but marketing , you that data that we have is is is know that what traders are for to , looking to make markets and reduce risk .
Okay.
Some people call that sports book operations.
But you've got you know.
Personalization of content player profiling active risk management that acceptance.
There's a whole kind of.
Sweet of problems that need to be solved before you get to being a platform provider we do.
Don't want to do that.
Operators need to do that themselves.
Speaker #8: Great . And follow up question , I wanted just as a then more about trends in the affiliate business outside of sort of that transitory Google algo change larger US .
Last step.
Where the UI touches the user I mean, that's that's the critical place where an operator differentiate their offering.
Speaker #8: have talked about heightened OSB promotions . operators that Is The seeing translate to your wider business ? At the same time , I'm get your thoughts on any implications from Penn shutting curious to ESPN .
But everything kind of behind the scenes, especially around risk management that acceptance is very interesting to us and.
And I think it would be those that said your your margin is my opportunity Theres, a quite a lot of margin out there between for radar and genius and others that are doing very well with this category.
Speaker #8: Bet . Thank you .
Speaker #3: Yeah if you look at our , you know , just to give you a little extra context there , if you look at North America for us , we grew 55% year on year in the third quarter .
I think we've just got that the team the tools and the platform to to be extremely competitive in.
Speaker #3: But that was driven mainly by sports data services . You know , while marketing business was flat the globally , it was down a North America .
And more than just data and that settlement so.
That's that's where.
Speaker #3: But that was actually bit in driven by Canada . In the US itself , marketing year on grew year , and thanks to a lot that's the , you know , non of diversification that we've already done in the marketing business .
Our heads are at when you look at the next kind of one to two years.
Okay. That's great. Thanks for that and then switching gears.
Can you just help us think a little bit on I know, you're not providing formal guidance quite yet, but just on the on the margin side of things just just how to think about directionality here as we head into 2026 cost of sales starting to tick a little bit higher on some of these adjacencies in the marketing business I think you touched on it in the.
Speaker #3: You think . know , I Operator is healthy on the sports demand side . You know , we we haven't seen any betting change the way we we meaningful operators .
Speaker #3: You think . know , I Operator is healthy on the sports demand side . You know , we we haven't seen any betting change the way we we meaningful in We continue work with our to send more do a revenue share basis , which , you know , delays revenue recognition suppresses like for like growth rates .
Prepared remarks.
You know going to be a bit of an investment mode. Before you start to realize the benefit of leverage on that but just.
Speaker #3: and But know , even with that , we US we the specific marketing definitely year on business year grew in regard to Penn and ESPN .
Can you can you can you give us a sense of sort of puts and takes and how to think about margins maybe relative to your.
Historical guidance of three as we start to look at the 'twenty.
Speaker #3: I mean, you know, I think we were all, you know, watching with bated breath about what was going to happen.
Thanks.
Yes.
Before we were looking to 2006 and you're right, we're not getting a.
Speaker #3: There it happen is . , you You know , we certainly had a few kind of about what ESPN done if they were not with Penn .
Formal guidance here, but a few talking points.
I think it'll be helpful for everyone, but before we get into that it's important to kind of highlight a child signs out there that we think we are through the worst of the Seo challenges and our.
Speaker #3: working could have , you know , one option , of course , is to go with an deeper individual operator ideas they've done like DraftKings .
Speaker #3: But know , , you not going to it's have a major effect on our business . You know , we worked with course , but Penn , of not going a meaningfully to move the needle .
Our non Seo efforts are really bearing fruit fostered unplanned.
Speaker #3: not of course , we also work with DraftKings .
So we are at the high degree of confidence that we have bought the math I'm glad we're on the right path here.
So this means that we expect to see kind of mid teens growth in revenue.
Speaker #8: You are very helpful. Thank you much.
And.
Speaker #1: Our next from Katz David with Jefferies . Please proceed .
Around.
Around 10% adjusted EBITDA.
Speaker #9: Hi . Good morning
<unk> growth or even mid teens growth quarter on quarter from Q3 to Q4.
Speaker #9: everybody . Thanks for taking my question . Charles . I wanted to go just a little more with strategic respect to data the odds business and just talk through , you know , the what critical factors are .
Hum our updated guidance implies revenue of 46 million for Q4, which will be by far the biggest quarter in company history, just to illustrate that we think that will.
Although we're not where we thought we would be at the beginning of the year. We're in a healthy place and we have bottomed out.
If we turn into 2026.
We expect to see overall revenue growth in the low teens.
Speaker #9: you know , as part of , you are the things you be What really You know , beyond need ? just obvious your offerings .
When a store state that services business continue to lead the way.
We expect marketing to grow at the rate in the low teens and for sports data services to grow in the high teens.
Speaker #3: Morning , play in asking a longer term question
Speaker #3: Thanks I think know , as I said , I got a think we've path with what we've got . But , you know , there are these think , you us to welcome easy for move clear .
With BTC in the high single digits and b to be about 20%.
And if we.
If we look at the.
Our marketing business, our known Essie and SCO marketing business continues to scale.
Speaker #3: You know , lot of people out there there's a radar genius . and There's just private companies , but a into companies are pretty lot of these old .
Speaker #3: provide these You been around 20 , 25 years . don't So they have state of technology . It the art built in the just wasn't last 2 or 3 years using native services .
Contribution.
Margin becomes more attractive and Danone and ICL.
Channels.
And that also carries much fewer fixed costs compared to the traditional <unk> business.
All animals.
We expect to maintain overall adjusted EBITDA margins in the mid turkeys.
Speaker #3: Data science , Python , low latency cloud , everything . You just know , it's matter how no smart you were 25 years ago , it's very dusty when you bring that forward to today .
We see on a run rate basis.
So in Q3, our EBITDA margin was 33, 8% our Q4 guidance.
Speaker #3: So you know creates real technology , debt for some of larger these incumbents . And , you know , we we've talked a lot the , you ace with have about Optic and oxygen .
So we're stuck at 334% I think that's pretty indicative or for all of our expectations for 2026.
Thanks very much.
Speaker #3: I mean , these team . We hungry and they guys are move very start fast . building You of a . hat You and are extremely effective .
Speaker #3: I mean , these team . We hungry and they guys are move very start fast . building You of a . hat You and are extremely know , at you know , So , the drop just I think we've got right people the and the right platform to , that go after some of these opportunities .
Our next question is from Barry Jonas with truly Securities. Please proceed.
Hey, guys.
Some of the other data providers, who said theyre not ready yet to work with prediction markets curious to what extent that impacts your opportunity or strategy today. Thanks.
Speaker #3: the other kind of big trend in the space And is , you think know , I , you know , there's debate a couple of years this big ago , post about meaningfully were lobbyists that , there tried know , get it to , you statutes that you had to buy official and data as far as understand , I don't think that I into succeeded anywhere .
Hey, Barry.
It's it definitely positively impacts us I mean, youre right I think some of the big names out there are taking an extremely cautious approach to the category.
Speaker #3: , some of but , you know , if you have the official data today And , it's obviously very it's great . And it gives you access to other things which are bundled along with the official data .
Which means if you're a market maker you literally can't buy data from certain people at the moment.
We've got as I said on the prepared remarks, you know quite a quite an interesting business developing there are a lot of the market makers, both on wall Street than a traditional kind of wall Street, Marketmakers, which are actually going prediction markets and then the prediction market.
Speaker #3: everybody wants official data . the you know , this But not industry , while it's still a growth industry , it's not it's not growing at the kind of furious clip that it that it was for the first 30 years , which causes a lot of operators to look at the cost side of business .
Yeah kind of native prediction, where he'd companies if you will are.
Hum.
They're virtually all clients.
Data services business, not not necessarily marketing, but yeah that that data that we have as.
Speaker #3: know , how You can their I , you know , if I'm not going to grow by 25% this year , I'm going to grow by 10% .
Speaker #3: Well , how can take 5% in I cost out ? And , you know , that that EPs boost and , you know , think whereas I everybody just kind of naturally gravitated to the official data for , you period of time .
Is is exactly what traders are looking forward to to make markets and reduce risk.
Great and then just as a follow up question I wanted to talk more about trends in the utility business outside of sort of that transitory Google Algo change.
Speaker #3: I think there's an know , a long increasing willingness from a variety of , of in the customers space start , to actually just there look and say , else not is out there ?
The larger U S operators have talked about heightened OSB promotion is that something youre seeing translate to your wider business at the same time I'm curious to get your thoughts and any implications from Penn shutting down ESPN back. Thank you.
Speaker #3: What , what can know , what do ? And and of you that's just one thing that we do , it is to gateway course , but to get the door open .
Speaker #3: And sell other things to our okay , well , what operator then clients . You great relationships with them on the data services business .
Yeah.
<unk>.
Yeah. So if you look at our just to give you a little extra context. There. If you look at North America for Us.
Speaker #3: They trust us . They ask us if we can build things for them . There's a lot of back and forth in of terms communications and customer feedback , and I think we have as trust operators to to solve more problems for them .
We grew 55% year on year in the third quarter.
But that was driven mainly by sports data services.
While the marketing business was flat globally.
Speaker #3: So why would we not .
It was down a bit in North America, but that was actually driven by Canada in the U S itself marketing grew year on year.
Speaker #9: I Understood see clearly the advantage , but natural follow upstart that . And it's one that we get about this end of the business all the time , is know , if , you for not the official data and the scale and the , you know , the length of tenure , know you , would just be operators able to why can't they do it themselves ?
Speaker #9: I Understood see clearly the advantage , but natural follow upstart that . And it's one that we get about this end of the business all the time , is know , if , you for not the official data and the scale and the , you know , the length of tenure , know you , would just be operators able to why can't they do it larger mean , that's the question .
And that's thanks to a lot of the non ico diversification that we've already done in the marketing space.
I think operator demand is healthy on the sports betting side.
We haven't seen any meaningful.
Change in the way we.
We work with our operators, we do continue to send more.
Speaker #9: We Right ? I time get all the love to sort . So I'd of put that one out there too . Yeah .
Players on a revenue share basis, which delays revenue recognition and suppresses like for like growth rates are but you know even.
Speaker #3: If you just think about the optic odds data , business market , we spend upwards of $1 million a year on compute to process that data .
Speaker #3: If you just think about the optic odds data , business market , we spend upwards of $1 million a year on compute to process that data . if any individual operator do it well , it's going So to cost least that .
Even with that we the U S specific marketing business definitely grew year on year.
With regard to Penn and ESPN I mean.
I think we're all watching with bated breath about what was going to happen there. It is.
Speaker #3: Plus then , you know , wants to them at obviously building all the software , the team and everything else . Well we it doesn't we don't charge that much for a client per year .
We certainly had a few kind of ideas about what ESPN kindergarten and if they were not working with that and one option of course is to go deeper with individual operator like they've done with draft kings, but.
Speaker #3: So there's just an obvious advantage us it from instead of yourself . You know it's a themselves , industry . You can't do everything .
Speaker #3: , complex You know to buy , it's . I mean , I think it's very helpful to break the operators down into Okay .
Yeah, it's not going to have a major effect on our business and our pet we worked with that of course, but.
Speaker #3: tears . Like big the tier one guys are always going to kind of try to do everything themselves . Absolutely everything themselves . That's their whole shtick .
Not a lot.
We're going to meaningfully move the needle and of course, we also work with dressings.
Speaker #3: If they can't do it all themselves , their equity kind of story doesn't make sense . So we're not going tier ones . You know ?
Helpful. Thank you very much.
Speaker #3: we do after tier ones on data services . But , you trying to to know , we're not overhaul their businesses . But there's this long very list of tier two , tier three , tier four operators , which , you know , are very happy to give away substantial portions of their business to anyone that can do for them .
Our next question is from David Katz with Jefferies. Please proceed.
Hi, Good morning, everybody. Thanks for taking my question Charles I wanted to go just a little more strategic with respect to.
The odd state of business.
Speaker #3: You know , you think about it better the long list of casino online operators in Europe , which offer sports betting . It's not the product , it's just the kind of it's a tab core on the website and that , you know , to set it .
Talk through.
You know what the sort of critical success factors are the barriers right. I mean, you did mention some others that play in similar spaces.
Speaker #3: forget Solution . They it and want to think about it . don't ever want They just get a to little bit of incremental extra revenue through .
That may be larger.
How important is scale.
Speaker #3: you know , cases that , they're very work with happy to a , you know , most efficient , you know , provider that find .
Bundling.
As part of offerings.
What are the things you really need to go beyond just your your obvious innovation capabilities.
Speaker #3: they can And , you know , when I think about all this stuff , it gives us an opportunity to really And , and invest win on product .
Good morning, David Thanks for asking a longer term question.
Speaker #3: You know , we're a marketing company . So like historically we've won by , having great marketing , great distribution . But with our data services we can actually business , We can , you know , we product .
Youre welcome.
Yeah.
I think.
Speaker #3: win on can kind of go do style Tesla and say , going to make something okay , we're that is so good and obviously better so everything out that there than sells it itself .
You know as I said I think we've got a clear path with what we've got but you know there are these areas, which I think are.
Our easy for us to move into.
There's a lot of people out there that provide these matters trading services, it's not just.
Speaker #3: And and I just I think we have the team to to build products like that .
Radar ingenious there's tons of private companies.
Speaker #9: Helpful . Thank you very much .
But a lot of these companies are pretty old you know they've been around 2025 years. So they don't have state of the art technology just wasn't built in the last two or three years using native cloud services data science Python low latency everything.
Speaker #1: Our next question is from Chad Bayern with Macquarie . Please proceed
Speaker #10: morning .
Speaker #10: Thanks for taking our question . Charles . about Hi . Good the upcoming UK budget Autumn and how this could wanted affect the business .
It's just.
No matter, how smart you were at 25 years ago. It's.
Very dusty when.
When you bring that forward to today so.
Speaker #10: You know , you guys are obviously a leader in that so market , , you know , from what we've heard , it could some of the smaller players .
Yeah that creates real technology that for some of these larger.
Incumbents and we we've talked a lot about the ace team, we have with off the guards in all the channels. I mean, these guys are hungry and they move very fast and we start building stuff.
Speaker #10: But anything you can help in of terms how you think this will , this will change the hurt affiliate business in that market and what you've learned in the in the past , when taxes Thank you .
It's a drop of a hat and and are extremely effective so.
Speaker #3: Good morning Chad . To the extent next UK budget does that the raise gaming duty , it does hold back player lifetime values in the market .
Speaker #3: Good morning Chad . To the extent next UK budget does that the raise gaming duty , it does hold
I think we've got the right people and the right platform to meaningfully go after some of these opportunities and the other kind of big trend in the spaces.
No I think.
You know, there's a big debate a couple of years ago post pass through about official data in.
Speaker #3: evolve . And our commercial agreements take time to evolve time to . But you know , in any event , if they gaming that duty , it's it's it's obviously not helpful .
Some of these.
They're they're lobbyists to try to get it into the stack.
Statues that you had to buy official data and as.
As far as I understand I don't think that's exceeded anywhere and but you know if you have the official data today.
It's obviously a very it's great.
It gives you access to other things, which are bundled along with the official data.
Speaker #3: You know , we're have been we're it to expecting grow . We're certainly not expecting it to fall apart either . but you it's know , it's not going to be a growth not driver next year for us .
But not everybody wants the official data and you know this industry, while it's still a growth industry. It's not it's not growing at the kind of furious clip that it that it was for the first 30 years.
Speaker #3: Like it has been in the past.
Speaker #10: Okay . Thank you . And then in terms of maybe a medium or longer term question , in terms of how you're thinking about running the company's leverage , you talked at the outset about it that you are active in terms of repurchases and you're stock unhappy with the share price .
Which causes a lot of operators to look at the cost side of their business you know how can I.
So I'm not going to grow by 25%. This year I mean, I grew up by 10% or how can I take 5% and cost out.
And boost that that EPS growth and.
Whereas I think everybody is just kind of naturally gravitating to the official data for.
Speaker #10: that's obviously a use of capital . You know , you've made some recent acquisitions in the last couple of quarters . And then more importantly , with optic odds and the sports data there might be other tuck business , on , tuck in acquisitions .
You know a long period of time I think there is an increasing willingness from.
A variety of of customers in this space too.
To not start there and actually just look and say, okay, well what else is out there what you know what what can we do and and of course, that's just one thing that we do but it is a gateway to get in the door open and then sell other things. So our operator clients now we have great relationships with them on the data services business. They trust us to ask us if we can build things for them.
Speaker #10: how are you So thinking about , you know , running the company's leverage at this point ? If maybe this is a time to to lever up , create the best product for the future .
Speaker #10: Or know you're going to run more if you're conservative with just what you currently have in the tank. Thank you.
There's a lot of.
Speaker #3: Yeah . Elyse and I are always aiming to maximize shareholder value by continuously optimizing the capital allocation . We continue to see as buybacks tactical a tool to maximize shareholder value , but not as a means to return a specific amount of capital .
Back and forth in terms of communications and customer feedback and I think we have operators as trusts to solve more problems for them. So why would we not.
Understood.
Clearly the upstart advantage what are the natural follow up to that and it's one that we get about this end of the business all the time it goes.
Speaker #3: At the moment, we've got about $89 million in interest-bearing debt outstanding. And we have about $70 million in undrawn credit facilities available to us.
If not for the official data on the scale and the length of tenure.
Speaker #3: So as we , debt repayment is , you know , one of the options available to us cash . generate are going really well .
<unk> wood larger operators, just be able to why can't they do it themselves right. I mean, that's the question we get all the time.
Speaker #3: They in are a good position to capture most , if not all of the consideration and respect of That means contingent that we 2025 .
So.
And sort of put that one out there too.
But if you just think about the ATA gods.
Speaker #3: will owe them 40 million in April 26th , and 20 million in April 27th . we do have You know , so those payments coming up , you know , at this stage , I don't think we're looking at levering up beyond our credit existing facility .
The market data business.
We spend upwards of a million dollars a year on compute to process that data. So if any individual operator wants to do it themselves what it's going to cost them at least that plus then obviously building all the software the team and everything else.
Speaker #3: You know , I think we'd like to little see a more rebound in the business , you more know , a little progress on marketing growth in data sports services .
Well it doesn't we don't charge that much for a client for years. So there's just an obvious advantage to buy it from us instead of trying to do it yourself.
Speaker #3: then And , you know , I think we'd have some to confidence harder and , in terms of creating shareholder value through buybacks and other But things .
You know, it's it's a big complex industry, you can't do everything.
Yeah.
Bobby I think it's very helpful to break the operators down into tears, okay. Like the tier one guys are always going to kind of try to do everything themselves absolutely everything themselves. That's their whole stick if they can't do it all themselves their equity three kind of doesn't make sense. So.
Speaker #3: we yeah , are it's an everyday over here . And conversation something we think about a lot .
Speaker #10: Appreciate it Thank you . guys .
We're not going after tier ones.
Speaker #1: Our next is Mike Hickey with from the Benchmark Company . Please proceed question
Work with tier ones on data services, but we're not trying to to overhaul their businesses, but there's this very long list of tier two tier three tier four operators, which you know are very happy to give away substantial portions of their business to anyone they can do it better for them you think about the long list.
Speaker #1: .
Speaker #8: Charles Hey Yeah . Elias Mark good guys . two from Just us predictions on the market . Obviously we can't stop morning talking about it either , can investors either cannot It's obviously accelerating here .
Online casino operators in Europe, which offer sports betting it's not the core products. It's just the kind of it's a tab on the website.
Speaker #8: We've flutter last night saying . they're going to launch in December . DraftKings Operators . got probably do the same . And part of that Charles , like to is pretty .
They want to set it and forget it solution they don't ever want to think about it. They just want to get a little bit of incremental extra revenues through and you know of cases like that they're very happy to work with a no.
Speaker #8: in UA meaningful , as we Investments last night . And of course , calcium market are there . So you've got a pretty vibrant ecosystem .
With the most efficient.
<unk> that they can find and.
Speaker #8: So context , how are you thinking about the with that marketing services opportunity in this category ? I know your your data . Peer support radar is already active .
When I think about all this stuff and it gives us an opportunity to really invest in and win on product marketing.
Marketing company. So historically we've won.
Speaker #8: Just curious how your if you're active and how you see the opportunity especially unfolding , in 26 for growth .
By having great marketing great distribution.
But with our data services business, we can actually.
When on products. We can you know we can kind of do go Tesla style and say, okay. We're going to make something that is so good and so obviously better than everything else out there that it sells itself.
Speaker #3: Hey Mike , question thanks for the . I think you know the sports data services as we've covered is where prediction markets are very exciting .
Speaker #3: When you think about the the marketing side of business , one unique feature of the prediction markets , in contrast to sports , traditionally regulated sports betting , is that everybody has to be treated the same .
And that's just I think we have the team to build products like that.
Helpful. Thank you very much.
Speaker #3: a totally It level playing field , so you can't have personalization , you different can't have bonuses . You know , there's frankly less marketing involved now .
Our next question is from Chad They with Macquarie. Please proceed.
Hi, good morning, Thanks for taking our question.
Speaker #3: People still need to find these services and sign up . And we can obviously help with that . But we're taking I think a little more of a cautious approach with that given , you , our our know partnerships with all of our regulators in the United States .
Charles I wanted to ask about the upcoming U K autumn budget and how this could affect the.
The business.
Speaker #3: You think raw data know , I is fairly innocuous . But , you know , on the marketing side , there's there's . Yeah , I think there's also an opportunity there .
These are obviously.
A leader in that market. So you know from what we've heard it could hurt some of the smaller players but.
Anything you can help in terms of.
How you think this all this will change the affiliate business in that market and what you've learned in the past when taxes have been adjusted thank you.
Speaker #3: we're very focused But on the data services side .
Speaker #8: Thanks, Charles. On the data services, it sounds like you might be constrained a little bit on M&A just given your current leverage, your stock profile, and the downturn. How are you thinking about investment there?
Good morning, Chad.
To the extent that the next U K budget does raise gaming duty does hold back player lifetime values in the market and that does ultimately.
Speaker #8: being sounds like It you're adding layers , which is exciting . But how do you sort of balance I guess internal investment and capital allocation to sort of the organic development of data versus M&A , imagine which I probably some in tuck assets out there nice that could sort round out your current of offering .
That's what we can charge our clients.
But that doesn't happen instantly you know the perceptions of the player lifetime value would take time to evolve in our commercial agreements take time to evolve.
But in any event if they raise.
Gaming duty, it's obviously not helpful.
I think our expectations for the U K and Ireland segment next year very feet on the ground I think we're actually planning.
Speaker #3: Yeah , it's a great question . Again , something we about are talking often these days . But I think I think if you come at it from a first principles perspective , you need to figure out what you want to buy .
When we look at our budgeting for next year, you know we were not expecting it to grow.
We're certainly not expecting it to fall apart either but but you know it's it's not gonna be a growth driver next year for us like it has been in the past.
Speaker #3: And if it makes true sense for the business , if it literally ticks all the boxes and everybody has very high conviction , then then you need okay , to find it pay for and hopefully that'll come together .
Okay. Thank you.
And then in terms of maybe a medium or longer term question in terms of how you're thinking about running the company's leverage you talked about it at the outset.
Speaker #3: You know , at the current , you know , share price , virtually nothing's accretive . You know , it's certainly a headwind in of justifying M&A terms .
That you are active in terms of share repurchases and you're unhappy with the stock price. So that's obviously a use of capital you know you've made some recent acquisitions in the last couple of quarters.
Speaker #3: But that doesn't mean not still thinking about we're things . But obviously it's front of mind . And we're going to be as focused on capital efficiency as we've ever been .
Speaker #3: But you know , there's there's different ways to skin the cat . You know , there's there's every one of these deals is unique and interesting .
And then more importantly, with optic odds and in the sports that are business there might be other tuck on tuck in acquisitions. So how are you thinking about you know running the company's leverage at this point if maybe this is a time to to lever up.
Speaker #3: And there's there are ways to go things which , you know , preserve our , our , our capital efficiency .
Create the best product for the future.
Or if you're going to run more conservative with just what you currently have an attack. Thank you.
Speaker #8: Thanks , Charles .
Speaker #1: With no further questions , I would like to hand the conference back over to management for remarks closing .
Yeah.
Alex and I are always aiming to maximize shareholder value by continuously optimizing the capital allocation.
Speaker #3: Thanks for joining us We do today . expect to to finish the year strong here in Q4 , subject to our updated guidance , and we look forward to updating everybody on that early next year .
We continue to see buybacks as a tactical tool to maximize shareholder value, but not as a means to return a specific amount of capital.
At the moment, we've got about $89 million in interest bearing debt outstanding and we have about $70 million in undrawn credit facilities available to us.
Speaker #3: Thanks for joining . Bye bye .
So as we generate cash debt repayment is you know one of the options available to us.
Obviously I'm going off the guys are doing really well they are in a good position to capture most if not all of the contingent consideration in respect of 2025 that means that we will owe then $40 million in April 26, and 20 million in April 'twenty.
Seven.
Yes, we do have those payments coming up.
At this stage I don't think we're looking at levering up beyond our existing credit facility.
Yeah, I think we'd like to see a little more rebound in the marketing business a little more progress on our growth in sports data services and then.
We'd have some confidence to lean in harder and in terms of creating shareholder value through buybacks and other things but.
We are.
Yeah, it's it's an everyday conversation over here and something we think about a lot.
Thank you I appreciate it guys.
Our next question is from Mike Hickey with the benchmark company. Please proceed.
Yeah, Hey, Charles is.
Good morning, guys, just two from us on the predictions market. Obviously, we can stop talking about it either can masters.
Neither tena operators, it's obviously.
Accelerating here, we've got butter lots.
Last night, saying, they're going to launch in December dropped probably like to do the same and part of that.
Charles.
Pretty meaningful investments UA as we heard.
Last night and of course calcium chloride market are there so you've got a pretty vibrant ecosystem.
So with that context, how are you thinking about the marketing services opportunity in this category I know Youre your data Peter Sport radar is already after I'm just curious how a year of your active and how you see.
The opportunity unfolding, especially in 2006 for growth.
Hey, Mike Thanks for the question.
Thank you.
The sports data services as we've covered is where prediction markets are very exciting when you think about the marketing side of the business.
One unique feature of the prediction markets in contrast to sports traditionally regulated sports betting is it everybody has to be treated the same it has to be a totally level playing field. So you can't have personalization you can't have different bonuses.
There is frankly less.
Marketing involved now people still need to find new services and sign up and we can obviously help with that but I think we're taking a more of a cautious approach with that given.
Our partnerships with all of our regulators in the United States I think raw data services is fairly innocuous.
But on the marketing side, there's there's.
No I think there's also an opportunity there, but we're very focused on the data services side.
Thanks, Charles on the data services sounds like you might be constrained a little bit on M&A, just given your current leverage profile and you're stopping down how are you thinking about investment there. It sounds like you are.
Adding layer.
Which is exciting, but how do you sort of balance I guess internal investment and capital allocation to the sort of the organic development of data.
<unk>, M&A, which I imagine, there's probably some nice tuck in assets out there that could sort of round out your current offering.
That's a great question again, something you were talking about often these days.
But I think I think if you come at it from a first principles perspective, you need to figure out what you want to buy and if it makes true sense for the business. If it literally ticks all the boxes and everybody has very high conviction then.
Then you need to see.
Final way to pay for it and hopefully that'll come together.
At the current.
Share price virtually nothing is accretive you know, it's certainly a headwind in terms of justifying M&A.
But that doesn't mean, we're not still thinking about things, but obviously, it's front of mind and we're gonna be as focused on capital efficiency as we've ever been but you know there's.
There's different ways to skin. The cat you know there's there's every one of these deals is unique and interesting and there's there are ways to go out of things, which.
Preserve our our.
Our capital efficiency.
Thanks Charles.
With no further questions I would like to hand, the conference back over to management for closing remarks.
Thanks for joining us today, we do expect to finish the year strong here in Q4 subject to our updated guidance and we look forward to updating everybody on that.
Early next year.
Thanks for joining bye bye.