Q3 2025 Genius Sports Ltd Earnings Call
Thank you for standing by at this time, I would like to welcome everyone. To today's genius Sports third quarter, 2025 earning results results. Call all lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. And if you'd like to withdraw your question, press star 1 again, thank you. I would now like to turn the call over to genius Sports. The floor is yours.
Thank you and good morning. Before we begin, we'd like to remind you that certain statements made during this call may constitute forward-looking statements that are subject to risks that could cause our actual results to differ materially from our historical results or from our forecast.
We assume no responsibility for updating forward-looking statements, any such statements should be considered in conjunction with cautionary. Statements in our earnings release and risk factor discussions in our filings, with the SEC, including our annual report on form, 20f filed with the SEC on March 14th 2025.
During the call management will also discuss certain non-gaap measures that we believe may be useful in evaluating Geniuses operating performance. These measures should not be considered in isolation or as a substitute for geniuses Financial results prepared in accordance with us. Gaap a Reconciliation of these non-gaap measures to the most directly comparable us. Gaap measures is available in our earnings press release and earnings presentation, which can be found on our website at investors.gov.
With that, I'll now turn the call to our CEO Mark Locke.
Good morning everyone and thank you for joining us today to discuss our Q3 results. We will keep our prepared remarks relatively brief this morning. As we look forward to hosting many of you at our upcoming investor day next month, there we will share with you. A detailed overview of our business product demonstrations industry Trends, and our strategic and financial Outlook.
With that in mind, I will quickly touch on the key highlights from this quarter.
First, we increased our group Revenue by 38% year on year, making your strongest quarter of Revenue growth since q1 2022. This was led by a media sector up near 90% year on year. Further validating our investment and excitement in the space.
We also increase our group adjusted ebit da by 32% year-on-year to 34. Million representing a 20% margin.
Both betting and media, contributed meaningfully to our Revenue growth. This quarter
our touch quickly betting to start.
Betting revenue increased 28% year on year, predominantly driven by growth with existing customers. There are a few specifics that are worth highlighting.
First, we secured the exclusive rights to the European leagues and Syria this quarter.
Further strengthening our existing portfolio of the highest quality football content globally.
With our scale and distribution across hundreds of the world's largest regulated, betting operators. We were able to generate immediate Revenue uplift in this quarter through this additional content.
Additionally we announced the expansion of our partnership with hard rock bet this quarter as part of our renewal. We are now providing hard rock with additional content and live trading Services across the Premier League Syria European leagues NFL and more
Hard rock is also. Now the latest sports book partner to utilize our bet Vision product across Syria NFL and over 23,000 other lives betting streams.
Of how our picks and shovels. Positioning in the US, betting Market enables, our Revenue growth to outpace others in the ecosystem.
Whether it is in a state like Florida or through a competing product, our portfolio of data and advanced product set.
is essential to the success.
For all operators and we are confident this positioning will afford continued opportunities in an ever-changing and evolving industry.
We've also expanded our partnership with ESPN bet. This quarter.
which now for the first time includes Bet Vision, not just for NFL but for our full suite of soccer and basketball content as well.
And finally, we have seen positive Inplay betting Trends to start the NFL season.
Through the first 6 weeks of the season, in play represented, 30% of total NFL handle right in line with our expectations.
We are encouraged by the continued growth of Inplay, betting and expects. This will continue to drive betting Revenue growth through the remainder of this NFL season and Beyond,
This growth is a function of the continued evolution and maturity of the U.S. market. But equally, it's driven by an improving set of in-play betting products.
Our sports book Partners have done an excellent job of offering much. Wider range of Inplay betting markets this year and we are realizing the direct benefits of that.
To add to this. We are empowering more, Inplay betting, volume through the continued, distribution of bet Vision, which is now available on nearly every major sports book in the US. And continuing to drive more viewership increased Inplay betting and more engagement overall.
For instance, through the first six weeks of the NFL season, we have seen a 35% increase in the number of unique devices streaming NFL on that vision.
Additionally, we've seen a 25% increase in the average time spent on BET Vision per device. So we aren't just seeing growth in the overall numbers, but also growth in the actual time spent interacting with the platform
This, as you know, is critical for the integration of our advertising solutions into the BET Vision product.
Which I will touch upon shortly.
Most importantly, Vision continues to be a consistent enabler of greater in-play betting, which represented 74% of total handle through the BET Vision platform so far this season.
And within the last 6 months, we've launched bet vision for soccer and basketball, meaning that we are now providing over 23,000 events per year. More than 200 Global competitions, through vet Vision, representing a rapid expansion of the product.
As a result of this expansion, the number of sports book, customers utilizing that Vision has exploded.
This time last year, we had 6 sports book, customers integrated with that Vision as of today. That number has grown to over 100 Sports books, representing more than 350 brands.
This kind of growth in just one year demonstrates our scale and distribution.
So bet Vision continues to drive more engagement in in play. Wagering, which compounds our betting Revenue growth.
And as we have proven consistently, our betting Revenue growth continues to exceed the growth of the overall Market.
This was the case again, in Q3 with a growth of our betting Revenue, nearly doubling the growth of our us ggr.
Now, as it relates to bet Vision this increasing engagement is also enabling opportunities in media, both as a source of audience information, and as a source of unique advertising inventory, Each of which makes our advertising Services unique in the market.
As such our media business was the largest contribute to this quarter with Revenue, increasing nearly 90% year-on-year, support to 2 million.
Our pause for a moment to let that register.
42 million marks a new core key record of media Revenue in the absolute terms. And 89% growth is our strongest year-on-year increase since q1 2022, the quarter of our first Super Bowl for perspective,
When we raised our guidance last quarter, we expected 50 to 60% Revenue growth based on minimum commitments. So we are happy to see that level of spend in the quarter exceed even our own expectations
What makes our advertising platform unique?
We understand Sports better than anyone, we know, sports fans better than anyone and we are leveraging our technology to create the next generation of fan experiences.
So, these are three distinct factors that differentiate us, and we have strengthened each of these even further over the last few months.
The first is live sports data.
We understand the exact moment of a heightened Fanning engagement and emotion and use real-time data to trigger advertising content improve campaign, pacing and inform bid optimization strategies.
Or leading to better return on investment for our customers.
The second is audience data.
We have several sources of first-party data and now we've acquired Sports Innovation lever, which brings an even deeper understanding through their proprietary fan graph, which is built on real spending patterns compiled from billions of transactional data points.
When combined with our league relationships, existing data sets, and media buying platforms, we can reach fans with even greater precision at exactly the right moments, generating a higher return for our advertising customers.
Third is our unique inventory.
We're creating new ways for Brands to reach sports fans that can only be executed through, genius, Sports last quarter. We mentioned new inventory, that now exists on BET vision and how quickly that that was monetized.
Our latest example of new and unique inventory was seen on FanDuel Sports Network for select WNBA games.
We delivered broadcasts augmentations to Showcase next gen stats. Such as real-time short probabilities, 3-point, distances and more
We transform these augmentations into high impact sponsorship opportunities, empowering Brands, like Shopify, mba2k and point 3 to own these key moments of the game.
Fully integrated live on the broadcast.
This has been highly successful for broadcasters and advertisers alike, so we expect more of this to come.
So, we are continuously, improving each of the factors that make us unique and we have built the most comprehensive real-time fan activation platform in the industry.
All media Revenue growth. This quarter is evidence of the progress that we've made.
As always, our media revenue is driven by 2 important factors growth in the number of advertisers and increase in total advertising spend.
This is exactly why it's important for us to sign deals with advertising agencies, because they aggregate a large amount of spend across several individual brands.
So our recently signed agency deals, including our new partnership with PMG are driving significant growth in the media Revenue, through the second half of the year.
We plan to cover the media business in more detail at our up, and-coming investor day on December the 3rd. But in the meantime, the key takeaway is simple. We have a unique set of sports data.
Audience, data and inventory. And that enables us to deliver Superior return on ad, spend for our partners.
We're gaining significant momentum with Brands and agencies and remain optimistic about the long term potential of this business.
Before we conclude, I want to briefly address prediction markets, a topic of frequent discussion over the last few months.
In an effort to preemptively address questions. Let me share our perspective.
We are observing the developments around prediction markets carefully. We must always comply with applicable laws and regulatory requirements. And we place a great deal of importance on the views of our regulators and Commercial partners.
As they evolve and mature prediction markets May provide a meaningful new opportunity for genius Sports and expanding the addressable Market.
While these products and Ne are evolving rapidly, and the need for genius official League data marks and logos, and integrity Solutions will only grow as prediction markets become more sophisticated.
This means that we are extremely well placed, should we decide to engage?
Customers, and indeed the prediction markets themselves, to determine the next steps. We are confident in our ability to capitalize on this opportunity in a responsible and sustainable way. If we feel all of the requirements we need to meet to participate in this market are in place.
Given the early and evolving nature of this Market, we won't be providing additional detail on this call, but I want to be clear.
If we are confident that prediction markets will meet our robust Regulatory and Commercial thresholds. These developments could result in positive, developments for genius Sports and our future growth.
And with that, I'd like to officially welcome Brian castellani to his first earnings calls with genius and are now turning the call to Brian to discuss the financial results in more detail.
Thank you, Mark. I'm very happy to be joining genius at such an exciting moment in the company's journey, and I look forward to working with the analyst and investor of community.
To pick up where Mark left off. I will also keep my comments relatively brief this morning since we are planning to cover, a lot of financial detail in our investor
As you've heard from Mark, we benefited from multiple Revenue growth drivers, this quarter across both betting and media.
Even if we take a step back and review, our yearly position, we are delivering, well-balanced growth across each of our product groups and tracking. Well, ahead of our initial expectations, to start the year.
As you'll see on slide 14.
We are also seeing strong growth from each geographic region, globally.
As you can imagine, the U.S. is driving most of the growth this year.
And this quarter in particular, especially given most of our media revenue is derived in the US.
But even in our more mature European business.
We have still increased our Revenue by 19% year to date.
Which speaks to our long-term value creation and growth with sportsbook partners who operate in more mature markets.
You'll notice our group adjusted IBA margin was roughly in line with Q3 of 2024.
And it's worth quickly touching on a few 1-off factors.
First, we just secured the official data rights to Syria and the European leagues in August
As we outlined last quarter.
This partnership is built on. The broad deployment of our technology platform across Europe, which enabled us to obtain these rights on attractive financial terms.
Because of Rights fees are recognized over the course of the Season. We recognize 2 full months of expenses in August and September
However, on the revenue side, a few sports book contracts were finalized shortly after the quarter end resulting in a temporary timing mismatch between expense and revenue recognition.
This will naturally resolve in Q4 as the revenue from those contracts are recognized.
With that in mind, we have generated strong growth in group adjusted EBITDA, increasing 32% in Q3 and 65% through the first 9 months.
And as it relates to cash, our operating cash flow, this quarter was 27 million.
Demonstrating the seasonality of our cash flow, which typically flips positive in the second half of the calendar year.
Taking a step back from the quarter and looking across the full year.
We are continuing to demonstrate strong, annual, Topline growth and group, adjusted IBA, margin expansion.
We feel confident in the underlying Trends across both betting and media as you heard earlier from Mark.
In Betty, we're seeing strong product adoption, increase in play betting and favorable pricing in our fixed contracts. Giving us good visibility for approximately 30% growth for the full year.
20% and now we expect growth of nearly 30%.
As such, we are raising our group revenue guidance from $645 million to $655 million, representing 28% growth for the full year.
We are also raising our group adjusted ebit, dog, guidance to 136 million.
Representing 59% growth and 400 basis points of margin expansion for for the full year to 21%.
This further emphasizes our consistent growth and margin expansion on an annual basis.
To conclude the business is firing on all cylinders. We're continuing the improve our position in the online sports betting, industry through expanded content coverage,
Increased product adoption and favorable. Commercial terms enabling durable. Revenue growth.
We're also proving the value of our advertising platform, evidenced by a growing number of unique capabilities and new client wins.
This success is reflecting the results we've delivered today and are raised expectations for the rest of the year.
We're looking forward to sharing more detail with you in our upcoming investor day on December 3rd.
We'll now conclude our remarks and open the line to Q&A.
Thank you. And at this time I would like to remind everyone in order to ask a question. Press star, then the number 1 on your telephone keypad. Once again, star 1, in the interest of time, we ask that you please limit your questions to 1 primary and 1 follow-up question. Thank you in advance and we will pause just a moment to compile the Q&A roster.
And it looks like our first question today comes from the line of Ryan Sig doll with Craig Hallam Capital group Ryan, please go ahead.
Hey, good day guys. Uh, want to start on Syria, European leagues. Um, you mentioned kind of the straight line expensing, delayed Revenue wreck from a few Sports books, can 1, can you quantify that? And then 2 the impact on the quarter that is and then 2, anything you've learned from those uh, 2 specific contracts. Now that you've taken them over from the commercial negotiations to working with the leagues to just anything that may have, uh, surprised you with either of those
Hey Ryan, it's Mark. Um, I'll I'll take those backwards. Um, well, uh, so on, on the commercial negotiations, I think that I think that the the takeaway from some of this is is really that the rights Market that we you know is is is changing um, in a, in a way that's very positive to us. We're sort of seeing, um, the sort of evolution that we've been talking about over the last few years of Rights fees. Um, you know, coming down in in a lot of leagues and giving an opportunity for us to to deploy, technology and partner. Um, you know, very meaningful and serious way with with with the leagues and uh, and the right deals that we've announced recently, are, are, you know, very good examples of that, we've managed to deploy a lot of Technology. Um, we've, we've managed to create relationships with those leagues that give us the opportunity to, um, really leverage the technology that we've got access new markets. And um, you know deploy deploy a lot of our um, is it makes make make a lot of the uh, sorry make some returns on the investment that we've been making over the last few years.
Ryan, like what I would, it's Brian. Thanks. Uh, I would add just that. Uh, as I called out we uh, contracted those early in the quarter but we have a revenue timing mismatch where it'll take us a bit of time to monetize them. Uh, and so there's a, uh, timing expense impact on that.
Are you willing to quantify that?
Fair enough. Uh, switching over to the media segment, nice out performance, in the quarter, seemed like better on the revenue line than kind of the flow through to ebit, uh, curious if that was more the Legacy, let's call it programmatic advertising lower margin, uh, business. Or if it was kind of Fan Hub, higher margin, self-serve, DSP, and just kind of bifurcating, uh, that strength in the quarter and then also the race and guidance. And if there's any difference in that mix in Q4,
Finds itself a bit, the revenue mix. Uh as you noted media uh was heavily weighted. There was strong growth almost 90% that flows through at a lower margin than our betting business. Uh, but uh, all the trends in media going the right way, uh, and growing that business. And for the full year, you know, while the margin, uh, maybe a little lower this quarter, but it was where we expected uh, everything performed in line with our expectations, looking at the full year, as well as year to date, you have, you know, roughly 60, uh, percent growth on the ebit, uh, and high 20s on the revenue. So you'll see their year to date. Uh, there's 460 basis points of margin growth and for the full year we're projecting, uh, 400. So uh the quarter really just impacted more by timing and mix.
All right, thanks for the question, Ryan.
And our next question comes from the line of Clark lampen with btig Clark, please go ahead.
Hey, good morning. Thanks very much for taking the question. Um, Mark I wanted to go back to um, growth of the betting Tech business for a moment. You talked about, um, you know, performance sort of exceeding. Um, the US Benchmark. Is it possible to contextualize for us as the markets evolving and it's sort of coalescing around you and and your next largest competitor.
um,
You know, sort of on a go forward. Basis is a reasonable to think about sort of growth holding and above Market IE. 20 to 30% range for the foreseeable future.
Uh, yeah. I mean, uh, there's a lot in that. I mean, we, we, we're seeing we're seeing a lot of, um, you know, product roll out. As as, as I mentioned, the in the, in the call, you know, we're running over sort of 20,000, I think we're up to, about 23,000 events now. So, so the products that we're putting out into the market are evolving quickly, um, and and providing a lot of Revenue opportunities. We're seeing the sort of seeing this kind of, um, consolidation around, um, the way that we operate the business. You know, we've got our bet Vision product going out, the media's integrated into that. And, and, and that's, you know, providing us opportunities to compound some of the growth. So we're expecting uh, strong growth over the over the coming period. I mean, I think we've put our long-term targets out, you know, at 30% margin, we still see. Um, you know, we still still see that as our as our Northstar. Um, and again, the way that the product rollout is happening at the moment is, is, is banging in line with um, how we've been talking about it over the last few years.
That's helpful. And, and if I could just as a quick follow-up, I I apologize if I missed it, but did you call out? You know, sort of the Delta and performance, um, between the sort of 50 to 60% plan and the north of 80% growth that you realized for the media business, what what led to I guess, sort of more stand materializing in the quarter, was it customers seeing a better return or was this, perhaps timing related, any color you could provide would be helpful.
Yeah, I mean, the short, the short answer to that is a is agencies and, and, and strong returns. You know, the products are proving themselves. Um, we're getting, we're getting the outcomes that we that we want. And um, you know, obviously we've got the agency announcements that we've that we've made. So and the combination of both those is, is, is driving, um, outside growth in that sector
All right, thanks for the question, Clark.
And our next question comes from the line of Mike hickey with the Benchmark company. Mike, please go ahead.
Hey, Mark Ryan! Congrats guys on a great core. Welcome Brian great. Great to hear your voice. Uh, this morning after seeing you at g2e, just 2 quick ones. Uh, Mark, um, just curious on the the prediction Market here. All the super creating a lot of excitement for the industry. Do you think? Um this could be a driver of of legalization across the
Using some key States here that have been kind of sticky and not legalizing and the follow-up mark would be. Um do you have any concerns, um, where the prediction markets are competing against some of your partners today that they could take uh, some some market share in the near term or long term? Thanks guys.
And the, the the prepared comments, you know, we see there is potentially, um, you know, an opportunity um, which which, um could be very exciting. But again, you know, we we keep a very tight eye on regulation, as you know. Um, you follow us for a long time. We're very focused on making sure that we, um, operate in a highly regulated fashion that, um, that that, that we work with regulators. And we work with the right people in the market. So at the moment, we're we're watching it very closely and, you know, it's not. It's a topic of frequent conversation, not only, you know, externally, but also internally. Um, but but um, you know, at the moment we feel very well placed, we feel like there could be a large opportunity, but we've got to watch the regulatory space and how that's evolving over time.
Or I guess a quick follow up just on the uh Integrity piece. We're seeing a lot of issues here. Obviously MBA you you have seen and there's some International pieces to it. Can you can you just talk about how um you know the Integrity piece of of your business and how vital you think it is uh to to the ecosystem?
Yeah, I mean, it's how we entered the market in the US. If you remember, all those years ago, we sort of Led Led with um, you know, with the focus around integrity and again, it sort of comes down to the the this, this the concept of official data, you know, the thing we've been talking about for many years. It's it's increasingly important as as we're seeing that that, um, you know, the, The Operators and the the market coalesce is around.
What, you know, 1 uh, Focus around official data 1 source of Truth and making sure there's full transparency in the market. So, um, you know, it's it is not, there's nothing particularly new here, um, from our point of view, you know, that again, we we, we, we came to the market, you know, in the late late teens of 2000 to, um, with with, with an Integrity product, that, that was focusing on making sure that, um, there was, you know, real transparency and real. Um, uh,
Understanding of what the original results are and how the markets are working. And again, we're just seeing um, the evolution of that coming through, um, in the market. As we predicted,
All right, thanks for the question, Mike.
Great. Um thanks for taking the questions. Um just want to ask, I mean kind of a real time question but with the ESPN blackout on YouTube TV um in Monday Night Football was that helpful for for bet Vision viewership and and if so any tactics that you or your sports network Partners could deploy to to make sure the consumers come back After the Blackout or stay with you guys after stay with that Vision, after the Blackout's over,
Yeah, I mean, look, I mean, you know, not to comment specifically on that, but I think the overall, the overall point is around the, the growth of that Vision, as you, you know, you've seen. I think, I can't remember which slide number it is. Um, but you know, we we, we put it out there, um, where the, the, the number of sports books is has has grown. So I'm just pulling the numbers up.
Sorry, 26.
um, with the
I think, I think, I think we're up at a, you know what, we published it about 120, um, Vision customers and the amount of content that we're putting through it is has gone up to, to the north of 20,000, um, Global events. So, um, we're we're seeing strong growth. Um, we expect that product to continue to, um, deliver. Um, you know, decent viewership. And again internationally we're seeing a lot of, uh, a lot of success there. So, um, you know, we, you know, we don't, you know, we, we, we, we, you know, we don't know how, um, the, the viewership and I, you know, I won't comment on ESPN specifically but we don't know how that's going to affect it. But overall, we think getting content in front of sports, punters is good for the sports leagues. Um, it increases the number of eyeballs increases, the focus on those calm, those competitions and we think it's good for the sports books and again, we're seeing good results from that.
Yep, makes a lot of sense and and secondly, um, can you just talk to the advertiser response to the sport Innovation, lab data? This seems like a pretty significant upgrade and so, when do you think you'll start to benefit from this data and, and the identity graph?
Yeah, well, we're already ident. We're already. Um, we're already benefiting from it. Um, it was a, it was a company that we, you know, we've been doing some work with and um, the integration has been very, very smooth and pretty much, you know, immediate. So um, we knew what we were getting when we bought the business and we were already using it, um, and we've already getting very strong um, results from uh you know.
From doing so and good response from the customers.
All right, thanks for the question. Bernie.
And our next question comes from the line of Jordan Bender with citizens, Jordan, please go ahead.
For the NFL leads to more upside in your estimates via your variable Gaming revenue. So the question is, you know, do you start to think any differently about how you view your upside with respect to variable Revenue as we are now in? You know, what's the third consecutive month of poor results? And what looks like the third consecutive year of of bad outcomes in the NFL?
Yeah. Uh, I would say that, you know, we had, uh, communicated a while and we did what we said in terms of around renegotiation and renewals where we increased our fixed, uh, composition. Uh, and so, while that has decreased, the variable can component, it's still exposes us to the upside and it also gives us more predictability and consistency. Uh, and so the week to week holds, we don't really feel that variability that noise and uh, you know, we we obviously like the model we have and we continue to grow our value for the sports books in terms of just the adoption of products and helping them. Uh,
Helping them engage more deeply With Their audience.
Got it. Thank you. Um, and then just to follow up the, the inputs uh at 30% from what I see in the in my notes here that's roughly flat year-over-year. You know, maybe something more to discuss at your investor day. But curious if there's any change on how you're thinking about, um, the shift into Inplay over time,
Yeah, I think it's partly, too. We're early in the season here. Uh, the parlay mix matters, uh and so, you know, as we've seen around the world, uh, you know, it's likely that will grow over time, but I think we're early in the season here to judge it too. Finely is staying flat.
All right. Thanks for the question Jordan. And our next question comes from the line of Jed Kelly with Oppenheimer Jed. Please go ahead.
Okay. Great, thanks for taking my questions, just just to um, touching on the media segments Obviously good growth. Um, you know recent acquisitions can you just talk about how your go to market strategy is evolving with, you know with with with your sales force and then following up on Jordan's questions around you know the 30% live betting mix.
Are you seeing more, uh, better start to go into the higher margin products? You know, such as TD, TD props, you know, we we've seen the sports books pushed that. So is some of this that they're just going into higher ggr products, which is actually a benefit for you guys. Thanks.
So, I'm I, I I'll I'll the, the answer. The first question is the go to market strategy is pretty much in line with what we've been saying for a while. You know, our focus is is agencies. Our focus is of deployment of product through there and and, and, and um, you know, the acquisition of, uh, you know, large Brands, um, and proving value through the through, through the, um, initial, um, campaigns that we run and, and making sure we're getting results and it's all coming through. And again, you know, it's touched upon the last questions. S have really, you know, really helped a lot with that and we're getting, we're getting strong results off the off the back of that. So we expect our relationships with our um, agencies to continue to grow and we'll touch along touch upon that in the um in the upcoming investor day.
On the in play, as, as we said I overall, we're seeing that roughly flat, what I would say and we've called it out in the slides. Is that in that Vision where you know you might say that is a deeper fan engagement that in play. Mix is closer to 70 75%. Uh so we do see that, you know, the deeper, the go, they go, the more in play there is uh,
so, I hope that helps
All right, thank you Jed.
And our next question comes from the line of Steve pezzella with Deutsche Bank, Steve, please go ahead.
Hey, good morning everyone and thanks for taking our questions. Just going back to the advertising business. I believe you mentioned increased spend in the quarter for the quarter Drive, in the growth, above your expectations. Can you talk about how much visibility you have into the media business versus the shorter term in the quarter, demand?
World Cup. Uh and so we look forward to talking more about it at investor day.
Okay. Thanks. And then can you just help us? Um, how we should think about free cash flow in the fourth quarter?
Yeah, on uh, free cash. Uh, you know, we had a strong 2024 with 82 million in operating cash. Uh, and, you know, a big piece of this is going to be a couple of things in terms of, you know, discretionaries where we might invest, uh, as well as, uh, you know, you have some timing of rights, as I mentioned earlier. Uh, and then also, we do have and we've called it out. There is some non-recurring, uh, 1-off litigation expenses, uh, so on, when you look at it organically, we expect it up to be strongly. Uh, and so the back half of the year is typically where our cash flow, flips, positive and strong.
All right, thanks for the question, Steve. And our next question comes from the line of Barry Jonas, with truist Barry. Please go ahead.
Hey, thank you. Good morning. Um, I just wanted to follow up on earlier question. I think we, you know, relative to the NBA schedule going on. I think we all understand potential upside with Integrity Solutions and the power of official data, but can you help frame for us? Any risks around, uh, wider bet type restrictions like perhaps limiting?
Player props or micro betting? Thank you.
Yeah, I mean, I I I I I think the answer still stands to be honest with you. And you know, we've seen this, we've seen this quite a lot in in
Europe and we, you know, we sort of been through a sort of cycle of this in, in, uh, especially in the UK. And, and I think that the, the focus really does come down to, um, official data and making sure that the leagues, um, are well plugged in and The Regulators are are, um, you know, have good visibility of, um, of of how the markets are evolving in respect to the official data. So, um, we don't really see, um, particular risks around that as long as the market continues to evolve, um, hand in hand with the sports leagues, um, to protect the consumer.
Great, that's helpful. And then you know Brian uh congrats on the new role. I didn't have a chance to meet you at g2e but was was just curious. If you could spend a minute talking about how your approach the role with any new lenses and how you think your background can most help add value here. Thanks.
Yeah, thanks. Uh, I hate to turn the call into, uh, you know about me. But, uh, listen, I, I come from a long background in sports media and entertainment. Uh, and you know, we're, we're doing here at genius is exciting. And I think, for me, you know, genius is at a really interesting point where our scale and our distribution, uh,
Continues to grow very well. And I have, of course some focused on driving increased continuing, to increase the Topline, the IBA and cash flow. Uh, and also continue to, uh, help uh, and be continued, good stewards of capital. And I think you've seen us allocate Capital well and set high standards for when we spend it where we spend it and with whom we spend it,
All right, Barry. Thanks for the questions.
And our next question is coming from the line of Eric Handler with Roth Capital. Eric, please go ahead.
Good morning. Thanks for the question. Uh, I'm curious as the NFL continues to expand internationally. Um, have games in some new markets this year. Uh, are you seeing any impact uh, on bets being made, uh, overseas with the with the NFL?
Yeah, it's it's, um, yeah. We we, we're, we're seeing the NFL of real. Um, success internationally. I mean you you you saw where I think flats are announced they're they're, uh, they're they're used with um,
Uh, with the NFL, um, on an international basis. I think it's the third most bet on Sport with Patty power, so they're making real traction and, um, it's certainly peaking, the interest of um, of uh the the players in, in the European market.
Okay, and then I know it's still very early, but I wonder if you have any sort of early insights on the bed vision with your new soccer and basketball rollouts.
I mean I think most people think about it from only the sports books, point of view but you 1 of the things, that's probably a lens. That's interesting. To think about I guess is, if you're a sports League, what you're looking for is, you're looking at the distribution, you want people and you want engaged players to be watching your game in order to distribute your sport and make it more well known. And I think that that, you know, in today's world where, um, the way that Sports consumed is is changing. So so much. You know, you've got short form content, you know, the, you know, my kids watch sport in a very different way to the way that I used to watch sport. I think. I think that, that, that, that this product is a really helpful thing for the leagues, which is why they're so supportive of it. The other thing I guess is, that's happening, is just the way that the advertising Market's changing the, um, the advertisers 1
Content. That's, you know, sorry, 1 spots that are driven by high emotion, our Technologies, you know, when the fact that we've managed to teach the, um, the, the, the, the, the, the, the machines to understand the game and therefore, we can highlight those moments of high emotion which are, which end up getting high returns for the advertisers. So, putting putting a, a brand logo up as a, you know, as a gold school or, you know, um, you know, something very very relevant to that individual fan happens on the event. We we're able to do that now and we're seeing very, very strong results from that. Um, uh, again, it's 1 of the things that I think is, is, is peing the advertisers and certainly the agency's interests and helping to drive the media business,
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All right. Thank you for the questions. Eric.
And our next question is come from the line of Josh Nichols with B Riley Financial Josh. Please go ahead.
Yeah, thanks for taking my question real quick. Just want to touch on the gross margin front understand. You had some additional expenses in 2q with the revenue coming in or sorry in 3Q with the the revenue coming in in 4 q. Uh, with that in mind. Just, how should we think about the, the margin profile for for 4q, do you expect that to be back up to, to to be up year-over-year in the fourth quarter? Given you have a normalization
Uh Josh uh I mean we've called out where we expect the land for the year uh at 136 against the 6555 and uh roughly uh 20% uh, margin and up, 400 VIPs year to year. Uh and you know in terms of uh, you know, if you were looking at the cost of sales, you know some of that has to do with uh just increased rights costs in there.
That makes sense. And then last question, um, You probably touch on a little bit more detail, uh, the upcoming investor day. But
If you look like the media business, now you've taken the growth expectations up there to like 30% this year and you've mentioned previously that you thought the company as a whole was able to deliver 20% plus growth from multiple years, uh, fair to assume. You know, not just looking at this year, but a little bit beyond that that you would expect the media business. Given the traction you're seeing to to grow at above that pace uh for at least the the foreseeable future
Yeah, I and we'll talk about this more at investor day as I said earlier, I mean, it is, uh, us Centric and that the, the USL, and the hu and particularly in the back, half of the year, the NFL, uh, drives a big component, uh, and so strong growth this year. And, you know, we're working on that annual planning and how the calendar next year. Uh, will look. And so, we'll talk about that more at an investor day.
All right. Thank you for the question, Josh. And our next question is coming from the line of Chad benion with McQuarrie Chad. Please go ahead.
Hi. This is Sam on for Chad. Uh, thanks for taking our questions.
Mark last quarter. You mentioned that a big Focus for the company was on trying to create more NFL uh ad inventory for your partners. Uh, just curious now that we're a couple months into the season if there are any updates or new plans on that front for this NFL season, or for the next
yeah, I mean
we we managed to do that and we sold it out. Actually, it's all, it's all sold out. So, um, that's, that's, that's a pretty good. Um, pretty good place to be. Um, it gives us opportunity to create more inventory going forwards, as well since. Um, we, we can evolve the products that says they go and as you will have seen, um, again, I doubt the slide number, but um, the slide entitled new inventory, creating more ways for Brands to reach sport fans. I think is a really good example of that.
A bigger picture bigger picture. Question, I wanted to ask about the 30% margin Target, seems like the growth for the company keeps getting better. So as a company, how are you guys thinking about the balance of growth versus profitability and the timeline to reach that Target? Uh, again, I I mean, we will provide a multi-year view at investor Day this year. You know, we're adding 400 bips and we continue to believe that our margins will rise, uh, over the next few years and Achieve, you know, I I don't want to get too far ahead on future guidance, but, uh, we remain optimistic about what we've said where we're going. And we're excited. Uh, for December, 3rd, investor day to talk more about it. Yeah, I mean, this this sort of 2 things, you know, we've got our north star star out there at 30% margin which we, you know, we're we're still targeting and feel feel very good about and we're focusing increasingly and certainly will in 26, on cash, on cash flow conversion and, and increasing the cash flow from the business. So um, you know,
We've had a good couple of years on that front and we we we are hyper focused on that and again it's 1 of the reasons. I'm uh so excited to have Brian join us to to focus on driving that.
Thanks for the question, Chad, and our final questions today. Come from the line of Greg gibbus with Northland Securities Greg. Please go ahead.
Great. Good morning, Mark. Brian. Thanks for taking the questions. Congrats on the quarter. Um, you know, similar to what you accomplished with ESPN, I guess expand to the full suite of Bet Vision Sports coverage. Could you maybe discuss the opportunity with, you know, your broader Sportsbook customers that maybe don't use or use it for perhaps just the NFL? I guess just kind of how underpenetrated you would say that that product is relative to the full adoption opportunity.
Look they're early days. Um, you know, the, the, the, the, the, the, the, the, the, the, the products.
Um, uh, the the products are being distributed widely. We we we've got a good um, uptake from the sports books as as we mentioned earlier, but there's still an awful long way to go. Um, I think that the thing that I would focus on, if I renew your shoes is the, um, is the is the level of results that we're getting. Obviously the sports books, as we've said for a very long time, 1 of the shifting people doing play betting High margins. Um, you know, that better returns better engagement from the fans point of view. And from our point of view, we get a much higher, um, return on our, um, you know, through through the through the commercial deals that we have. If I remind you going back over the years, you know, it's 3 timeslot.
Do we um, you know we think that we're at the you know you still very early in the journey and we expect that um product and the adoption of that to be very strong over the coming years.
Got it. Great. And I guess for clarification and I apologize if you already addressed but regarding the temporary timing, this match between rev wreck and and the increased cost basis from rights. Um, you know, fair to say no impact expected or carry over into Q4.
Uh that's right. Uh it should start to unwind as we uh for Syria and epfl and particular. We start to monetize those deals.
All right, thanks for the questions, Greg.
And that does conclude our Q&A session. And it also concludes today's earnings call. Thank you so much for joining and you may now disconnect have a great day, everyone.