GENI - Earnings call transcript Q2 2022

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Operator

Welcome to the Genius Sports Second Quarter Earnings Results 2022. Throughout the call, all participants will be in a listen-only mode and afterward, there will be a question-and-answer session. [Operator Instructions] Today, I'm pleased to present Genius Sports. Please go ahead with your meeting.

Brandon Bukstel

Good morning, and thank you for joining us.

cause like call you that historical may to that we'd made certain are results begin, to risks this results forecast. during constitute could or we from to from that remind statements subject differ our Before materially actual our our forward-looking statements forward-looking responsibility We assume statements. no for updating last Form statements such earnings in with and filed factor risk considered SEC, release year. XX our the cautionary of filings on with Any conjunction be Annual including March on our discussions XX-F should our statements Report in this in

call, investors.geniussports.com. results During isolation non-GAAP measures in be these measures in in in GAAP. available presentation, earnings U.S. prepared of should may will comparable directly evaluating to the we useful on financial to turn most our considered found measures be Mark or our that, management accordance which measures U.S. non-GAAP Locke. with and as also CEO, is GAAP at discuss the call be press With earnings reconciliation These not A can that a certain I'll Genius's over substitute performance. release now operating Genius's our believe the for website

Mark Locke

through year. to and will our year. half more the EBITDA first and metrics growth our the to To consecutive for the revenue pleased our pass will guidance call. morning, results then begin, our to rest in call, out exceeded earnings I for successful the of I demonstrating look Nick to our welcome Good second that recent wins, will today's the to call continue detail. for discuss we've execution quarter, announce financial who the both accelerate CFO, On and outlook Taylor, from highlights discuss we're key business second-quarter quarter, and as of we the

as strategic to an wider million Group basketball continued of our streaming lines, volleyball Switzerland, product beach a by Australia, It's we Brazilian connections distribute the leagues our leagues collect Nick Our year-on-year rate disciplined to increased and designed $XX Group our revenues same QX, rights shortly. will albeit initial financial million Vietnamese adjusted deals included other certain cover figure using and at and this or that of Using professional another Group currency at the was led and line the help exceeding $XX in remember across in technology our million with our ahead suite such even QX nearly as In which this solutions with by all $X rights, To sports, margin. betting, football. data despite important integrity, federations guidance slightly $X their with execution to place and data, guidance live and Brazil, as exchange media. meaningful in were maintain forecast start, value. $XX by rate to professional see reach revenues many million quarter, much more. of million. along and we XX% the $X higher our acquire are establish across where leagues guidance, period headwinds of EBITDA our our time initial million, came of expectations of again exchange the three strong marked fans,

On the life. to next slide, these examples help I'll quarter concepts provide bring a from this few to

the quarters, minutes, our quarter. a will portfolio of to existing available few to ability our segment with Our it. continue and increase only win In new content is our as content we customers. how this betting Nick sportsbook outperformance past explain monetize of Consistent drove utilization with customers in as good in

our the operators sportsbook we in a business. in our outpaced have seen the guidance overall quarter, our back quarter, despite not promotional Finally, this far media slowdown revenues scaling budgets

digital advertising seen performance-based spend Our spend results ability customers Calendar sports sportsbooks to QX, customer. to from Sports in shift has consistently a solutions. advertising of to to in higher per betting we've acquire average led showcasing breadth on the our advertising Even favorable deliver casinos,

also advertising in We services gaming name diversified beyond brands such and PepsiCo, few. just as customer quarter, Heineken, new providing the our a to base Mondelez to have

As forecasts before, throughout near-term quarterly demonstrate year. our milestones the our serve to are I've to mentioned meant as progress

guidance with Therefore, reaffirming hitting million first of these XXXX two outperformance forecasts revenue our our million outlook our confidence our initial respectively, despite EBITDA at gives million million of in the of in XXXX again $XX guidance $XXX full-year Our momentum in adjusted confident $XXX headwinds. feel in of and to the target and revenue in exchange strong us of we January. the using in time Similarly, are million adjusted quarters, business $XX million the $XX even $XXX EBITDA. we to and along currency rate

few our strengthen our examples technology the As our to of of how world. quarter. earlier, federations bedrock I the helped mentioned with the partnerships last technology partnerships I'd like Genius is leagues a around give in and

for Firstly, and last on Sports of call, for mentioned by how Emmy our a technology. use RomoVision NFL was the award nominated powered the we CBS Second Spectrum

our CBS that months new and This in years was is work ongoing won, announce our proud testament exciting a are the that in and the broadcasts. excited features to partnership quarter, innovation We're which develop NFL award ahead. to sports to with we to in continue

also this other few a but wins quarter noting. it is worth technology We earned quickly

AI-powered performance division Second video League Club tools. and with tracking, augmentation provide will analysis, Our Spectrum Premier Benfica Football

'Em, free-to-play contests. zone Genius other well games products our game launched of official CFL as CFL, the work exclusive All-Star CFL Diamond and Preseason launched Genius renewed to Futures also CFL the a hub the MLB Streak, part a a As Pick Fantasy, zone, MLS and Derby predictor, new central with Beat is CFL CFL including fans games. as with games all of Game. home for continued and engage

I from World last data to And like we Budweiser. Challenges a other ahead, partnership com fans integrity ecosystem will of free-to-play suite alongside Bracket Lastly, EBITDA League full growth. the Genius where continue [indiscernible], of including accretion tech-driven multiple few more games Genius years landmark profitable the games Hyundai, of minutes with relationships benefits fan-engagement activations FIFA+ to suite builds ahead. and becomes designed Genius from free-to-play business the in at solutions. us developed and the a excites about engage we opportunities revenue provide little because understanding we are for in XXXX the What extra platform, a our and games the in much our by significantly they launched how expand Trivia Genius In revenue looking to multiple have summary, margin critical FIFA's year. want integrating while predict cost. you sit official upon implementing Malaysian weekly announced sponsors ahead accelerated In these words, and model in Football with so new spend Cup which we and discussing profitable is

As that Genius exist far-flung growth that in today, these year you are especially to is opportunities wins. a see, nearly are are the investment require quadrupled business that not further U.S., after drivers multiple ways There realize. These year.

time remain all sportsbooks. a without business characteristic we new means roughly that Let's the to sales dollars, last we our ability our the capture is XX, work every start any our revenue share increase or no York model, Whether switch years in XXX,XXX meaningful unique are costs. partners, any California, Genius costs of earnings, which relative and the New events moment start simple allowing revenue along a meaning with Handle. and to in or When to revenue discussed any operative relatively are of contracts with additional especially other in wages provides to to the months handful We Ohio, fees, and to flipping rights collection up. ahead, fixed our data our no April, the in market January revenue hopefully data receive no share next launched in a placed as or coming when opens arrangements costs as or market on Genius's is of Ontario states in It favor. launches marketing increase supplying Massachusetts

new from launched locally new sports that markets media As a customers betting, online note, acquire this also region. will our side because is to players our business our services utilize advertising in benefits

a revenue. unrelated the contracts betting. next cost X% shift X% structure. high profitability our In-Play profitability. to is to that having revenue to our The Consider on Betting, In-Play three factor gaming as drives profitability This contributes on revenue EBITDA the will X.X% So, completely as an NFL rate mix our the of having other more. earns fixed from share revenue on revenue a does on to times to do average under as example, words, Genius's pre-match anything cost Betting so In-Play generated current media that revenue to change In-Play share higher base near-term too without an take bets, of genius increase Genius In increases our again margin revenue and without incremental X% gaming earns

As Investor January that's guidance of Day. In-Play Betting GDR, in our will of represent our XX%, a XX% approximately assumes we reminder as XXXX discussed NFL

towards assumptions, upside NFL markets, hope have guidance a else exceed trends it that as large communicate In-Play early every present improve the this theoretically all our actual being potential see is we betting these in While change equal. our indications season. EBITDA our data. time, should sure assumes from to In-Play greater shift will our and to that to trends happened to season, ultimately betting. revenue start U.S. we We'll matured to move be second any Over our no last In-Play If expectation

on of as Handle. is winnings. of rates, Next essentially consideration known win This a operators' operative is the its dollar earn as Genius every hold. margin, a the percentage earned operators otherwise revenue

a Last our larger operators expected EBITDA expanding hold win alongside takes So, margin thus revenue experienced operating rates. the as slice growth. pie, of than Genius season's lower more,

time our and this incrementally this be normalizes over bottom helpful indeed As improves line. will to

example, these or is to in betting on increases that consider is time. is important X% the operating regulated and the won This fixed our leverage on our rates. content. In take percentage Genius We this these from cost play And, powered on operators Remember, given business sports other the what generated Genius importance over to is by XXX stats. our increase rates and This earn is gaming data to mean exactly earned base, margins. the renewed operates historically Genius previous around Contracts take world. variable to X% since we in The renewals about plus data constantly we revenue talked my contract frequently revenue NFL benefit able it. a sells directly impact that share is official no the business. are of under-monetized, have which global

confident are we the of today at The possible inflection to here moving ability in With and discuss like call sit in to from turn quarter is the to I'd best forward. invested in this opportunity. place precipice ourselves We and who capitalize now position to the point. results have our Nick the and we profitability on will putting in that, expect U.S. the in this our infrastructure what

Nicholas Taylor

Locke. Thanks,

a also plan ahead included guidance we reminder, XXXX. quarter As forecast of Day, QX which despite in currency Investor basis. targets January a fluctuations. group the for quick disclosed in our we Within on second executed for quarterly profitable our guidance, marks product successive our full-year that we each on

in As our To rather our operational dollar volatile the the last in to a just U.S. itself, business dollars. quarter. currency poses clear, rates be conversion to throughout call, foreign of noted sterling we little remained exchange presentational revenues but fluctuating on rate the the risk U.S. Sterling exchange absolutely

the For constant at revenue volatility guidance our will our you true the we of in of sterling and Day into of also in set the January as our figures a movements, performance. Again, a the a as setting appreciation reference reported to Investor guidance X.XX. will revenue give sterling provided time view currency impacts this Separately, apples-to-apples remove exchange presentational reason, well. apples-to-apples a year-on-year also dollar business given quarter. view of This currency subsequent And reminder, out growth. currency our using have we of the in view an is January. rates will figures, give our of ratio assumed GAAP guidance by always the removing aim exchange the Therefore, second U.S. course, against U.S. actual U.S. we our dollar to our have

further streaming customer quarter million the betting to approximately wins. a driven initial this utilization $XX in million XX% Using basis $XX in group was Performance share revenue available million. our high of in were currency content, our $XX begin, betting assumed of of grew So exchange rate ahead growth target. by in same new our to the from revenues data exceeding constant a strong revenue product guidance on contracts, and our guidance, slightly segment,

dollar nearly was $XX driven segment of was our this much FX generated, media major segment. well grow the year a in in Our in at of year million advertising. ahead QX growth this quarter, impact was the pace, again, $XX on coming U.S. guidance. continues the our by revenue Since negligible million to predominantly Once doubling phenomenal performance-based business in organic programmatic to

Our to betting, spend we the customers, to strong of such note, light led the deliver areas sportsbook average demonstrating our quarter, the have in solutions our during which instance, the to continue casinos for and for higher calendar as quarter. sporting sports beyond a offer. solutions advertising have shifted other given results to Of spend customers range

to a million, rate $XX and or by as generating which summary, league revenue rollout group provided Lastly, in million $XX group existing $XX tracking quarter of this initial million as pace million this ongoing Spectrum the technology the guidance ahead Second million Like constant well line at expanded $XX versus past half Using in revenue also our having $XX exchange federation guidance our the with is sports guidance, quarter. through EBITDA services primarily we our quarters, sports the first year exchange of rate at was was well in driven the customers. the translated reported we same our expectations. as of our as adjusted product in are revenue grew expected. our to This guidance. our In currency, XX%

EBITDA adjusted discipline the quarter. is This cost continued slightly quarter, function which in guidance of of This level guidance is business. million revenue million million $X $X a at the $X rate or exchange reported for we in outperformance Group ahead and the a

remain results the the demonstrate the Investor group-adjusted in full-year and currency as to the plan first-half $XXX our despite earlier. we relative execution our we XXXX outlined we of guidance I ahead confident Day guidance remainder and in revenue we million in in The to our reaffirming fluctuations our year. our Therefore, million look mentioned progress approximately are of $XX EBITDA along

noted As U.S. focused. quarter, the predominantly and U.S. media our business dollar last therefore is

this can the provided in revenue group our on X.XX. see page. approximately exchange dollar this So, sterling guide strong presented that believe our you ratio in the currency-related the first is fixed presentational most us would U.S. XXXX by enable betting set as the using exchange January, in out EBITDA. year which rate raise in and results of Again, in the We million risk on a guidance guidance of Investor to of the segmental half in revenue Day, adjusted our to $XXX million $XX assumed

reaffirming volatility the rates, current of outlook. our however, Given we are continued exchange

our January same XXXX We are outlook, the and also remain as current guidance confident maintaining the at using our our of XXXX exchange rate Day. our time initial in guidance Investor

accordingly. update of As we the the this year, exchange more may calendar outlook we approach direction rates this of on end clarity have and

this clear our to We the of the on that next operating in achieve are margin path believe the sports Star. position commitment media What that growing by of still means expansion ecosystem. EBITDA term, with powering our medium a triple margin to it's in betting strong massively goals digits and leverage long-term business our profitable year a North us sets excess committed growth and continued of well our driven this XX% and remains and to is company-wide beyond

particularly line cost will business laser-focused made Our to a of revenues. now the reap not earlier. we to to win as the on multiple described investments grow And has structure with U.S., date, benefits in ways that the Mark disciplined in the position remain

matures. on on we the out provide set our U.S., Investor the the between expansion. our the under split the to I'd also underlying outside in geographic as on, these are similar the investment expected, moving track under Day, due view. it and highly in of out in and remains viewing expect U.S. this results and course a as outside U.S. Investor When to an update performing the path versus revisit through profitable be today, actual of follow our full-year we that Day. a while clear, view are the is provide a achieve underlying geographical profitability To be we target set sure detailed full-year business lens, forecast this our also our business to on U.S. view to performance to to Before core brief we the area market We'll the business like

expected our Lastly, quarter, with be flow liquidity last noted I'd position. to that to an cash like broadly two. update in we on breakeven conclude quarter net I

with Just balance. the line in as QX million we closing finished $XXX restricted we cash in our and quarter with cash protected,

In in technical to effect a rates. like disclosure before of QX, to million $XX I'd this well the exchange as note, flow in fact, On flag in we relation cash. generated cash quickly accounting

bringing the equivalents is certain the the QX, liquidity our year-end. Again, closing the to between us also cash quarter million revenue collection QX, timing funding $XXX expected any cash accounting restricted as our as of recognized of we payments balance cash includes capital total which turn million position expect some to total worth over equivalents, and rights positive prediction. our of in It flat I cash, be restricted year-end look will outflow comfortable is share half under split are that cash and forward at This questions. with strong continue the rights $XXX given to restricted it this can uses ample have agreements, under the generate adjusted the cash mentioned and the we you cash in majority contracts, million and answering cash line and of we in the exists U.S., a to relates on also of sheet. concludes for of flow then cash we business a year balance cash we remainder including this particularly our in and confident Our cash in noting of remain that today, we to the cash the that and the remarks, expect as EBITDA particularly prepared on our and to I to reduce will roughly balance be see and roughly for growth the by of last cash expect second to to by we plan purposes. cash XXXX. positive occur That guarantee $XX $XXX million time, flow sheet,

Operator

our McTernan And Bernie comes Instructions] from go [Operator line first ahead. of question the Needham. from Please

Bernie McTernan

Great, for taking you thank questions. the

guys potential a segment? the How number especially revenue signed in we initial with You last of operators. to those U.S. Media should contracts year expand Technology upon about services' think betting contracts, the

Jack Davison

Bernie, Chief Commercial Hi, it's Jack Officer. Davison,

we I relationships is U.S. expand operator no and about think in large all how think our is It strategy. the a partners different.

U.S. Sports. our So, the Genius a which with we In NFL so, kind the out were postings, of fruits know, as of with an pretty and entail NFL wasn't don't everything when conversations, business. we're we were firm we of successful but seeing all-encompassing doing pretty centered and selling we that some we were were all the relationship do in that the that started as that now, around about you only

that of content, operators. the is Officer like make by also -- the content to sure we've that, content the of talked the increasingly all in we're streaming get sort terms Mark business on So, is the we benefit of presentation my in way now additional expand we data, really in selling that sell which things some Chief it's more the market job of way do U.S. we that growing, the and the size their is to we touched them continue our as about land sell and of to those Commercial but that, growing,

with them drive So, or about the in of beyond pushing things very you're and part and sector, just but from that to we where marketing, like will on like on very media how right obviously not it's on that happy betting that's different sports relationships, we not engagement and a one their keep that's the trying evolve betting ahead do going effort specific the to that's continuous going, every but stuff, so things acquisition, of to all journey us, not betting well. those We're media the a thing simple for that of that like equity, to touch growth and operator help that's it's but of really retention sports they're company in achieve. operator day these sports terms sort our

got a wide set So, of the there. across as know, opportunity piece we've you product and pretty lots

Mark Locke

that and our our when it's But and things times -- base. that. from lot just I'm been their going we that a targets quite in on, expand additional own to have media performance leverage yes, of really this really the Mark, really lot selling It's you. it's costs we are ask sportsbook it's one of of said deals, worth a that outlined, kind doing have a we a like few hearing acquisition to that sportsbooks has sales, of sort I and when for of operators but is do important lot customers that. to we a the as business, of land about in also on going we've us -- where products, things for reinforcing we're the is leverage, we Jack way the the we we think relationships are strategy this with space think stuff And and when a setting think is these focus executing

where of sure sportsbooks So, leverage the and generating value we're all sort that in using that real the forward. to have the those always relationships at offering. the we But we're and from a we're returns position actually using doing way we're getting yes, real we're pushing are that it services making times,

sort our strategy. it's about when about you worth of that think just So, thinking overall

Bernie McTernan

to margin Can your you maybe on Mark, Parlays And a for like just Genius? listen follow-up, FanDuel a to wanted seem as and deck Parlays EBITDA focus Understood. how on tech the in increasing you takes just puts just how Parlays DraftKings the or focus prepared or an roadmap. the win there remarks but about Parlays lever on mentioned slide accretion, rate specifically the talk in as you whether impact

Jack Davison

Yes. a thing of margin Parlays, is is it and a Jack Parlays going operators. really for this Bernie, again. in driver Hi, interesting gain Look, big

not that U.S., We it the world bank are over in demand wanting of by lot and have expand it's -- a driven a actually, flexibility, all well will as just this you're seeing to as the is whether initially on, that's product of guess the focus customer I this well, pushes it something that sort to two-fold we the have on. other How, [indiscernible] way. we really customer continue

have the over U.S. and world. the in all We some relationships

for that not into so a Parlay, successful that We've pregame pushing talked development. just some We've forward in-game but the thing about And is about us. Parlay. got moving

products see products so a So, with Genius that, customers, line. take down that encourage. benefit get these a are their and rate margin, on driving on share of high we for of then something facts top share sort we all of coming the On that know, high products - operators example is of the the those our because even you we get if spying we that's as NFL,

that successful organizations. performance of trying happening valuable of decisions own that, decides products, get we're the customer market. that's to be by not use things we the benefit industry still customers on and these from the and in which drive to So, can top the evolution we build that think their on our their support But product sort make because both will where own providing are

we So, of get we as the benefit and are excited we supportive and go. that

Bernie McTernan

Great, thank you both.

Operator

Sigdahl is ahead. of Please Craig-Hallum Group. Ryan from go The line the next Capital question from

Ryan Sigdahl

operating Good afternoon. with leverage. guys, to morning, Want start

on infrastructure comfortable and support fixed place, you but between headcount able in places have G&A over OpEx So, can the more have I the technology down the those, have you the the do add you but is investment, of you to that need or guess years cost are of current mentioned kind marketing, you where break business? the side growth all with to you lines of of next couple more you infrastructure the see sales

Nicholas Taylor

mean, that hi, Yes, that I to much quick answer place. Nick. in It's is Ryan. pretty the will

the at on was we our that's those expenses position If you before million million. a in $XX cash if look basis, were the which you quarter look XX% operating from actually I quarter, in $XX.X at think down QX,

we're to not needing cost any seeing the business. service additional to put on So, you're that now it right

So, we've increases those areas, business from the the list as or do SG&A revenues we perspective because points whether sales of you to the in all so don't R&D, various we're know, marketing invested but that service a with to for need either in and becoming U.S. in that anticipating.

Ryan Sigdahl

Good. just moving over to college sports. Then

second, some is but like given these these and of try with the you And But it that. them just here or recent a potentially deal approaching are sports win with seems to all through more us NCA of on a the negotiations have So, help Mac. make conferences to broadly? priority think you or It then relationship going decisions past leagues other betting majority your are relatively certain soon. first, how

Mark Locke

the relationship opportunities. before you're for as stuff them and to we're a betting they beginning there In we things these there's about right. and can them opportunities mean, And become touched of of of competency those some of excited the some discussions we're I think that were of lots in been question. we've lots every on move Good are this I of going area today, and that sports data excited holistic from And were about not few said Genius. rights perspective, excited just because we've some times on. about

things about when those relationships were things. they're think of like there I not deal, we NFL all these organizations significant these on about sports our and are obviously just touched betting through we've Some that silly came and and organizations the about other

in as succeed we got business. a However, what here, for us to need we've we've enough, order us to got for succeed

short-term right and so, And on be we'll these based horizons the long-term business. good will very way to and of a needs we suit of part forward, the make although clearly conversations of this time going we'll investments that sort disciplined in do

going about will win think no. pretty you're and And the to revolve. So, these you is to all we your feel to don't on there are all and way need I the there and right, of specific question, good market those. them going things not That's discussions successful. be answer to

two we relationship great got or with at pillars we're helpful, but some in one the with and and right or so. always we've our happy very would that. structure before, As the be large right really said two portfolio One more price more

Jack Davison

position acquisitions technology also with rights an these to seeing Second of a Yes. way And now the sports of just of it an the wider each each money are it's real rights strong we especially, with as holders point all and was an lot some evolution play bigger do the that much of made had actually those the stack from are think increasingly becomes that value I We're And and conversations sophisticated incredibly But in of like. seeing well, I Genius's technology rights that. put in we've holders. we're interesting, and as the end in to that these that historically, we see in holders with quite and that happening rights around extent the to add and rights the recently feel the organizations. Spectrum, view conversations to

become environment become part And holders a have of deals are deals I that rights guess of important value evolves in really that because way historic or We an over available log these more traditional been rights unique a struck. we're those and above that think rights way ways have have to technology, some going college approach, the and together that's to to the I other of increasingly done. the a able we unique - adds package some

Ryan Sigdahl

Thanks, luck, Mark, Good and I it. appreciate Nick, Jack. guys.

Operator

is of The from next B. question go Bain David the Riley. Please from line ahead.

David Bain

you. thank Great,

to it First, think as get of this, but on. Nick, can confirm mix, And kind second real-time 'XX. I comes of remainder to flow the from levels as of the reset holds of then but the compression, of again, the result FX you but we half on know but depending margin looking the differential hit us occur, you XQ there? jump through assumes in just remind guide million $X to about you revenue, not for also betting or X.XX year for the to I then second the obviously a at guidance you may NFL on may which guide just XQ clarify, in EBITDA, January, know half

So just a quick guide cleanup --

Nicholas Taylor

Yes. as at currency basis, to you Hi, to we Day guiding our XXX million January, were be will rate, million revenue lifting in the and set $XX which XXXX let's $XXX that in know, we're you're confident in $XX the a an and David. on real is revenue Yes, clear, basis, on the Investor EBITDA, currency the be we still a guide if EBITDA. position million basis, at but actual right, guidance,

that's currently business, not are you as XXXX, XXXX basis fundamentally of rate at that set $XX So, that's million and basis. million our EBITDA million revenue in And in at we're $XXX to exchanged million say at we and our January, range in we the confident very 'XX. guidance to $XX $XXX

David Bain

great. I obviously flagship response us bit that actually particular, on then change Ryan's up a on wanted to that get you're I'm maybe contracts of don't this rationale question was the see question sort had, in your second on Okay, when I you used you're to to could little depth hoping with, evolve. because beginning And follow more know now a to percentage kind of what price with be, help negotiating and to

anything if XX% being lower that, at of or could end go the gone more does to think that as to XX% maybe be you trying you sort to rights spectrum, your long-term I'm it XX%, it forward. of is on costs the begin that make to we and understand, So, XX% be price positive like from makes

Nicholas Taylor

new, a It's holders terms that And the of they see we sort evolution there's lives more now quantify it's role and what deals play and they a how see of we're question could the at the the are sort I Yes. great of of their lot going these guess, I I themselves starting, role are I wish of forward. in and in engagement -- journey sort about fan struck, cutting in ways edge. terms that rights seeing really, outlined beginning of mean a of holders moment, is brand technology rights the it. At you as but

sort a we for that the in can technology value make rights though sort without our So, any these is us doing are where to have of and we starting value of rights really holders deals. really what therefore lot seeing our learn they're difference. we're they how What we educating them with is technology and the real and really help more doubt a a educating about

in we're some mentioned some conference, value exchange that we in is got the real you Mac the -- becoming a we're a tech mean. in newer it's technology of put we differentiator frankly the for see there, And us -- ability that those and So, of important because for that I there huge in certainly provide them. seeing our unique if to that I a conversations more much

can't making But the start we XX% that months, forward. of quantify think XX, to or exactly and value attributed to that I to able much you next, be difference can the XX the will what So would moment, the it's tell tell going well, I be I going is at to I XX%. is how you over whether really is, think

David Bain

encouraging. very Thank That's you.

Operator

Kelly the from of question Oppenheimer. ahead. next Please from is line Jed The go

Jed Kelly

thanks guys, my for Hi taking questions.

segment. going back Just the to media

are couple that to that up seems and things that clients not picked to more what dive a thing hear operators. that encouraging one Just it gaining into, you're share, that was sportsbook of you

much see into in So, your from the than there XQ was just would like potential kind going on seasonality XQ about media think more your -- actually more is you that guidance contribution we you does business? of could how extra give where be I your -- upside XQ you clients? give revenue non-sportsbook higher that actually know but should where encouragement XQ

Jack Davison

Hi, Jed. Jack. It's

Mark Locke

Hi, Jed.

Sorry to jump.

Before I'll you hand you. over jump in to it

it the, Is year. our the the locked in the last what of rest the we conversations thing deals sports is lot operators. was part is immediate is in, betting at that looking signed recognize for of that focus, you're think initial had the them. with for stuff longer-term not the Yeah, revenue because to with we when that moment, outturn of the the -- Just we're a seeing I the on

are lot locked But we of to of you're if spend, market. right, you ability like sort So, already. that betting is also on move and of business sports our that a about outside excited in touched the of the

you there. will hand to So, color you if pick of I up it Jack, bit want just now on a to over

Jack Davison

of not to I to add is, mean Yes, time it significantly larger grows business QX, line thing there with no only they the tend I new the for think impact these of would advertising QX where to this over in verticals we're more that Jed. sort but other and have in the ecosystem sure. but seasonality we'll change this Hi, expecting year, year. spend will other this and segment naturally with I more

Jed Kelly

environment GGR you of we promotional dissipate like you just get And that I to follow-ups, it. seemed the then Got basis. doing is there and And can the kind other then on media, have two just an any your how you its on sees competitors do sportsbooks? net update New just York, and more on know it's segment sense paid media compared on your

-- a how about have talk York the on pulled benefit seen you from New seen can of back Thanks. revenue sort have of operators you you lot So, a promotions? as

Jack Davison

Sure.

first one, Genius vendor technology. provide main I of our but if in quantum, that programmatic cases we partners you things, the one the not market of vendors, know exclusive side exact in of in the an to conversations terms the mean of is share. give the On preferred terms I the some vendor, have on and that I with the can't

you the of compare course, bucket certainly that large other a marketing vendors, to So, channel. in bookmaker through that's chunk Genius. that one has lion's taking we're programmatic into of instances, us the those overall share flows but of budget, But when

Nicholas Taylor

I'll it the that, you that York to tell second the New Yes. of up pick Thanks, it's on bit with stuff part honest a behavior. early so, from on

operators is discount they Actually, that the thing as the point we revenue can marketing rightly less out way. we spending theory remember you of think to money spend cap I the even in though that along to amount the through in should New will flow receive. York be

So, season to that it's bit a make I'm not through a to upcoming and we the tell, early expecting driver where big end huge up actually, terms beyond. of in big, but NFL

Jed Kelly

you housekeeping for NFL Got similar And one your in just holds question. expecting last third year? more Are it. guidance Q

Nicholas Taylor

Mark touched his all clearly in -- I mean, we are, Yes, it what remarks. exactly And on that's yes, I early we think that's as we

Mark Locke

the actually same put in as it's our Investor Day. assuming we We're

the Day. hoping forward, So, we we're moment in assuming any we're being we're not are at conservative Investor growth put hope assuming numbers obviously we on the and what

Jed Kelly

comping the So, nine in revenue. implied is last if year or in favorite occurred the that the weeks weeks first eight dynamic you're guidance, that

Jack Davison

look in -- Investor rates a yes, what proportions. Day, At quite of hold think I view we'll have detailed implied back and

our still so changed view season, the haven't yet relevant. We that's XXXX, XXXX as on

Jed Kelly

Thank you.

Operator

is Please question ahead. go Credit from Chaiken The of Ben the line from Suisse. next

Ben Chaiken

states I prepared in in of a Hi, a potentially going you you going? expenses, is should percentage I And know guys be us no at As can flow-through help of gross bracket, few you Massachusetts the think mentioned But others. or the margin, revenue? the handful there talked alluded EBITDA be the us deck remarks how's it can may 'XX you and to, help it. is terms you live state beginning the on phrased profit operating bracket way gross maybe what in material you dropped new maybe down about

Jack Davison

I'll with if okay that's take guys. you that

drops in those I Mark XXX% at little through just So, think to mean close but I what it reiterate, is touched dropped through examples. I bit it specific a on let's mean

cost stadiums, of on number people of at example, base, cost cost individuals of for about think those. rights you based the or collecting trading the having the If that in all major on doesn't change or the data, data, people our betting it those

is the betting afternoon, start Massachusetts there on an XXX% exactly at dropping but of cost of get same increase of zero you revenue much Mark we we to zero the implant people that's And that. said good Saturday absolutely through change example gave as pre-play revenues cost on get know, the when example, that In-Play back from a an uptick as pool and Mark for close almost basis. earlier, as times with three the and in So, on for immediate

Mark Locke

worth the new touching sportsbooks as think and side business, before, the those that side, because a this worth said well. states breakdown those upon states for presents media into I the new spending moving opportunity one of us emphasizing And to the revenue is provider start then else of us. something new on in online with states media stream start business. also operators money, when a just come they But those It's it's services Nick obviously, a obviously massive given becomes on I've -- the as but that

have the come dynamics go sportsbooks new to sportsbooks, into and to be they market. that to those states because it online occur have where sportsbooks states difficult for when spend So, for those could quite money

flows through dynamic, don't to then just us well. For our that marketing increases the flows and partly where EBITDA have not we have money and dynamic we into our a revenues us as

a of states as on new see sides very driver and strong business. So, growth exciting we very very, of the both

Ben Chaiken

flow-through were to question, it. -- guess haven't the Day, operating originally for period? sportsbooks the the for anything at But environment a all helpful. I when embedded you're changed view. you behavior you of as multi-year super those environment, than back or players you're going different for assumptions previous can in made assumptions for 'XX. looking margins. appreciate there's know one of I the it know I thinking healing And of the energetic your was I NFL more industry versus the But that's because you in sense. of -- you. in-game an a was in-game was again, color And about question take could the you just back could That into you offline. Investor said win that's that 'XX -- make that talking variable the of on context about we Yeah, we're didn't Got the Genius-specific then can I kind I kind what implied that. rates, not seeing

Jack Davison

Yes.

Mark Locke

you Sorry, go? to want Jack,

Jack Davison

for it. Go

Mark Locke

they're I in a do early they're out that if releases we to that this as profitability, hasn't for their focused approach us promotions, and calls driving the say handle, sportsbooks. but mean focusing or areas going there's that doing which the profitability. the share you always for around they will we sales started, we definitely guys is, putting is towards you to season Well, mean, focusing the different I on to say increased really of earnings approach in-game very that season are new means a much Those obviously take are on listen, of.

of terms that And that guess of to obviously in bit can are I seeing, in their an they're the said in temper to be I how a we but directly think sportsbooks both So, want unknown. it's attitude operating how change NFL operating or is they their remarks still a DraftKings swing ways.

to think hope. way flow it's I Did in some we that I that we welcome to say seen and want going of that's change to the towards whether of be Jack. something? attitude through but still guess you that

Ben Chaiken

it. I Understood. appreciate

Operator

is question Please the go ahead. from from Farley of Robin UBS. next line The

Robin Farley

And thanks. the rights Great, $XX a guess get wanted clarification, cash with that line for to sum in that of about $XX Nick, newly contract did large signed million? some why this million Thanks. mentioned million certain I new $XX new a I restricted you quarter agreements. just item for rights that kind that and or a is of kind come quarter this was

Nicholas Taylor

product. a Yes, not hi, Robin. It's new

place the to letter a of have soccer. what U.K. secure So, we had, we previously credit in

in cost business amount business. after So, cash credit with and that the FTC with not letter -- insignificant of interest of the and

still letter of that Given cash, is which balance May with sheet cash credit equivalents sitting over then next secured cash out reduce our the we've the that swap cash sheet, able on our strength and the cash, of of XXXX. guarantee in two just against this which is will course means to return secured balance been and those still to FTC our that of and years our line

Robin Farley

letter of think? of way that on sort the down to drawing the of essentially kind is credit So

Nicholas Taylor

year documents in a filing has $X the in better was away. much the our by of I us be payments actually the cash credit place actual that FTC a saves details money, and cash previously over all Yes, are -- our previously returns the place, that it size in way, and to for still three of May a costing cash in That our last gone XX for for a in or interest million XXXX think deal letter will petition it's there in that is zero the about years now four line. months, deals course was of next in that north was us and this towards doing reduces cash equivalents to it deal cash that of

Robin Farley

adjusted Thank been they million line, getting follow-up, figure. There usually EBITDA. sort -- And back back explain then millions, just this you. There's EBITDA the could quarter that added to other numbers great. always is been what another been adjusted and it you to are $XX one another on the of add EBITDA. it's single-digit it Okay, like always was adjusted

of that Just quarter? this wondering add-back if -- what was driving big Thanks. kind

Nicholas Taylor

relation in there consideration our to of is That the foreign a foreign it quick but in income in is reducing that's it deferred is is, amount answer exchange not exchange back, statement, XX% I to gain in mean, related. to actually Yes, of but small the the hit acquisition the of foreign relation it foreign that EBITDA Spirable of exchange, the it's movement. course, a relation XX% in exchange is -

Robin Farley

right, all thank you. Okay,

Operator

ahead. of line the Bazinet from Please from is question go next Jason The Citi.

Jason Bazinet

next. revenue and guidance your mind or would this embedded sure is that your assumptions But go next? what guidance I'm year you for legalization in just of what cadence dozens this state on for assumptions there's into and elaborating year for

Nicholas Taylor

Yes, Jason. hi,

we the took timings, Investor was I'll first review like to and of have view go, and we over years own TAM in around our that. of What Day the me what Let state-by-state course in all average of we fuel the looks into did jump this then the out almost stations we including the the set coming forecasts out with XX an was market than guys what five fine probably, next let took rather up we that. the did, of

asked be or to not. any want the is, didn't you suspect I why reasons the particular hold state precisely we legalizing on For

forecast I we've got we our U.S. to is and $X.X it's XXXX is GGR $X.X the think, where for billion. So, in billion, XXXX for

everybody on think current in the think the they else I reasons think, you're of I market So relatively based there are for are precisely average but alluding that I prudent to. an positions,

Jason Bazinet

Thank helpful. super you. Understood,

Operator

last the Company. Benchmark The the And question of Mike go is line Hickey from Please ahead. from

Mike Hickey

Jack. questions. and guys. you're afternoon, me Good Two at. squeezing for in. Good Nick, Mark, morning, Hi, wherever Thanks

impacting obviously your just First, players, are obviously, just saying, some say are economic what the macro, guess most players, that of they hearing, terms their your sportsbooks. global on different no inflation hearing business I serve you seeing all we're the [indiscernible] seeing in you're what curious you're of in impact, others sportsbooks, condition

related incrementality Just conditions curious, players out macro P&L. on where you broadly add and speaking the there impacting

Nicholas Taylor

Nick. it's Mike, Hi

basis. a me go bit that. talk Let probably macro in little a but let anything more specific I'll related, Mark it or Jack a on have first I'll answer of Genius about

know and been the last guess about I have sure as we've the -- closely very relatively how over that most traditionally I'm earnings through have in been relatively immune the from and what you of customer downturn and of sportsbooks latest was Mike, holding we've way well. weeks, six the optimistic been cycle that's gaming the certainly their think up has strength an guys as listing economic I you sector been

course doesn't we most next is space. six have an are the that obviously the impact Specifically as and of the on significant know cost, for a pressures and costs fixed particularly years, you that that material really not to in the inflationary have ones something most Genius, to, will are rights that exposed long-term really inflation outside of short-term -- over five

prices Genius is we're you from to therefore helps not we're know know and something that if debt As interest free relatively don't us. exposed and I energy also are rates to the immaterial that

Mike Hickey

thanks. Nick, enough, Good

latency lot, question that's betting broadcast challenge market, it board the think in How powered a being platforms at also best be to in you I by the you. the you think payable seems and called has U.S. assumption. like conservative to. betting relates adoption the and in upstreaming rights as streaming you disadvantage I'm about how a last my tracking. on don't just sounds bigger to it impactful U.S. specifically [indiscernible] could piece potentially a progression the case thought U.S. been versus out. the Second curious it latency Thank sports mainly live

Jack Davison

Jack, two again, I it's sort hi, that. think you of Yes, parts of

industry of goals seeing bit You're interest What is seeing betting what's and from that engagement we're we're some right. perspective the live the operator of a increasing and now. happening space, in an from

So you're across that stuff.

that, last that's year, about but where NFL we we playing a We and somewhat - excited taking view, cautious, we the more thing are from that's saying for us stay to on cautious around -- until we and don't why the obviously where particularly do. we're and prudent because base know

to in-game there live perspective, I the you're season also we market. selling that happen how we and from I doing over into an going that, industry to ways of helps these mean engagements how some streaming drive time. is seeing through think think or mentioned not to product it and on what marketing, evolve us, beginning solves with are operators that's of perspective for just is upcoming are about Things for the starting Ontario last lots challenges our of is there think call, to I in industry

in our on Ontario, if the watch having are of streaming you're live are Ontario, in So, sportsbooks the to possibility you customers one you site.

in those about of problems. time, the period solve things. in-game trying the of those sort market will But where two and that's So My news to more market more that exist on and but some sort bit starting you for technology a that due begin to evolution some the of of of that to view be and time will over actually, harmony you're challenges are course. think out is will latency the between those a

our a perspective. going positive I'm on mostly lot but So, quite from

Mike Hickey

you. Thank

Operator

gentlemen session. concludes and Ladies that today's

now for have day. you disconnect may You a joining pleasant Thank and telephone. Goodbye. your

Genius Sports Limited (GENI) 16 Aug 222022 Q2 Earnings call transcript