Earnings call transcript Q4 2022

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Operator

Good day. And welcome to the Genius Sports Fourth Quarter 2022 Earnings Results Conference 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. [Operator Instructions] Thank you. the to turn Sports. now will call Genius over I

conference. You your may begin

Brandon Bukstel

you Good morning for us. and thank joining

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

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

Mark With the over Locke. CEO, that, turn our now I’ll to call

Mark Locke

year for been CEO best and as and for the during company. XXXX Sports you an joining Genius thank the time morning exciting strategically, today. of my Good ever financially technologically us opposition has it is and is

outlined beginning XXXX. revisit the like into day at year the first get of to Before investor the we objectives that our I’d in we ahead,

financial recall, the and throughout strategic to to the as all may and [Indiscernible] year. targets disclosed of different provide counterboot we particular, operational you shareholders to our targets outlined benchmarks clear success financial XX we for As plan. In part several our

has constant on time I’m goals. highlights targets delivered our pleased deliver year same of long-term to to to growth or $XX exceeded strategy EBITDA the macroheadwinds challenges share the performing All delivered $XXX behind our XX team this executing the we post significant million our that [Ph] million revenue strong the all despite the throughout [Indiscernible] us, and Among our guidance. in With [Ph] at short aheads while of including XX% and cessation in the in business [Ph] adjusted Russia. currency

supporting in zone. We with execute globe hundreds continue sports across time to our leagues every on partners plan in the of

of U.S. Our profitable both of highly in profitable outside the and We still scale and which continued ahead. growth margin in XX% business times to of the cash plenty blind size see now generative [Indiscernible] high range. is

and U.S. second the leading full year outpacing the in growth advantage we’ve global U.S. mind is high ourselves of growth with established the revenue market our in competitive far the player market market our dominant within the business. In relatively broader new XXX% of the as growth Keep still industry.

approach expect Genius continue to profitability narrow year-over-year in driver as particularly this will be long-term we region U.S. our a losses growth and of We XXXX. to the in continue significant

position broadcasters and to just sports leagues, ESPN name and including profile the of the CBS, deploying consolidate Amazon at across few. technology size by We a had continued ecosystem our books the NFL, technology heart to

revenues and Destination have more. with getting American diversifying partnerships long-term Our Canada, to enter our our not Express, started. in also outperformed of base achieved objective is we global brands client and media but this of has business much really growing Audible, And XX%, business including just excess also major only Pepsi, in

XXXX. and is flow and model, inflection we our a leverage free operating HX underlying core group proven we’ve strong cash generating meaningful expect in finally, of of flow, And the improving business business beyond cash argument starting our in

positive revenue our in cost in triple flow the year. XXXX and and we $XX to half our $XX generate of the from growth cash million fixed million XXXX to base, growth expect predominantly free EBITDA nearly in Given second

these we with results have the and to importantly, More that assets partnerships today. expect we deliver

In positive our on new in XXXX the for HX, any end, well we markets, forecast no geographical changing and Genius of any the move words, sheet $XXX comfortable without other financing need balance as with million positioned. M&A are debt And year factor. opening is deals, cash of the flow or exceptional the other of to any extremely rights cash therefore, our

continue key long-term excess a marks path adjusted our along group In EBITDA of XXXX point. towards turning margins ahead, to objective our expect in XX%. we years the of

improving and reiterating to since gives heart the business, second in What core our our us which long-term strong feel none the the in has objectives. the is of at strengthened confidence position going we underlying ecosystem, Given only public. margins confident

of for technology We partner and leagues, bookmakers, choice are the sponsors, brands broadcasters.

sticky a deliver second generation provided pioneered to sports inventory and computer services bookmakers data have sports leagues the the AI to and We and technology technology spectrums, data critical digital long-term that broadcasts. develop most of pro effective vision official implemented mission and focused makes to technology partner next us advertising rights to

a essence, and to way. In partner is Genius seeking for audience the technology engage cost and a trusted in monetize personalized sports anyone effective

through detail later walk you provide our on. the Nick financials more on guidance Taylor, But CFO first, Our headlines. I’ll and will

recap EBITDA $XXX adjusted and of our XX% XXXX. constant revenue at currency for EBITDA. revenue a represents improvement constant $XX starting million, exceeding and This adjusted year year. group revenue and $X represents million million the This and currency adjusted page, in full and revenue a top gross the significant uplift in from growth full we reported XXXX. delivered in our $XXX million compared EBITDA QX year in EBITDA growth $X XX% the guidance $XX the respectively in of to million adjusted To in of QX brings and Again, this million the to

in outperformance XXXX The was multifaceted.

with year, throughout total of a XXXX. in customers new the won First, XX business we

services, renewals in increase and contract Play sports and we’ve U.S. in volume these competed Each having XXXX. in value large we factors betting renegotiations with customers, existing betting. within strong of global margins among operating doubling specifically, than expand resulted total with the in third books. Second, improvement in And continue successfully to growth sports seen revenue our add U.S. more an

are our the Additionally relationships were our More strengthened year on shortly. of this leagues quarter. throughout display past tech full integration this on

revenue, XXXX our adjusted million ahead, execution and in tailwind Year EBITDA $XX million New in gives in and confidence XXXX. in Looking of our entering the strong guidance in $XXX us

important presentation, growth among on our is showing Turning to that our the table I’d slide like right X net metric hand measures point customers. the side, retention, to which an the of you to revenue

have keeping increase execute we land last of our that contract renegotiations the customers consistently that see net maintaining all retention years. over evidenced and on customers, of products altogether. typically done low You’ll the a gradual tiers sports across and customer all continued by experience while our renewals We’ve and this zero. growth additional successfully near revenue dropping Any out churn of in betting to revenue by-product few our services, betting alongside the through expand by churn strategy we do is sports

U.S. keep revenue in still U.K. weighted net Now, in is heavily our revenue mind the from of over XX% outside Therefore, the customers generated last it’s towards and like these that few retention our customers. Europe the more to mature markets years important

we is as This will relatively these be the contract steady negotiations. instance. very therefore and Brazil, pace and and given contract exciting continued expansion is customer regions, content geographies selling for more cross also of as new an pioneered, renewals well concept growth of data, such This mature a to services, betting driven officialised in still is into sports region. by by it’s supported be revenue new bookmakers. new as undervalued other in will our Although important net Therefore, which still retention

Now association we preserve introducing sport. is legislation and sports integrity as of with to Brazilian leaders particularly launched positioned, legalize have the well to industry an just Genius extremely betting

Turning developments betting, to topic relative three more year. to shift U.S. I’ll the the NFL stay slide fourth last months X, the In of but which we’ve sports quarter, seen full to specifically. focus catches many encouraging of betting, on

QX, to new is a launches we state U.S. successfully XX% First, year-on-year. betting approximately see a expansion increased as continue in sports XXXX. handle whole. the of function This online a sports in In rapid market betting

mature Maryland, addition in growth Louisiana, and York, to more New states. from Like

and Looking expect growth we to Ohio continue XXXX, Massachusetts. to in with exciting state launches new

reminder, revenue our revenue new every us share a contracts for uplift additional sports cost. As immediate little books mean in with launch with results Genius state

to Growth up from come. We’ve play. continue to in profitability betting in an years in also seen NFL improvement volume overall betting will drive

growth of better of handle The year-on-year. win nearly handle to volume in insight increased over of play has translated margins or XX% bets dollar XX% GGR and increased year-on-year. Our combination by total

improved year-on-year margins match handle also XX% saw NFL in in pretty We growth GGR. pre and win much resulting nearly

and pre earning aware, are you both win to business. since game pretty X.X% betting we strong gaming margins on like this clear currently As on be this parlays what take match Genius be parlays much And often absolutely same our asked means for may from benefits to positive We trend are operators products revenue. X% NFL

the Genius market, business. benefits remain U.S. this have on for fantastic come. bet NFL popularity from in for growth growth And In year pretty No markets. much official including same long mature products we to a parlays parlays As rely meantime, of our start. growth a in of Much operators. it we to think seen game data. years driven product, lasting grow we XX% will like which tailwind areas season, our in expect the and has this this all play matter recent success betting for year-on-year has in the these is the the

as in share positioned are we to winning So upside this continue area. operators the in

the market to to which growth in reach XXXX. XXXX, growth profitability enable XXX% in us Each U.S. revenue have of drivers the in these in will now translated

our now achieved XX As a And proportionally largest from XXXX. revenues massive of X/X overall representing in in growth demonstrating U.S. percentage the sports for significant, net we’ve XXX% while isolating revenue our XXXX, customers, customers. nearly more of U.S. top becoming of our retention revenue,

before to strategy to of successful but brands. sports technology become our The books, sports partner to touch broadcasters, the I’ll piece on of leagues last not is and a turning only choice Nick long-term digital sponsors for execution and also

personalized broadcasters, best-in-class sport for that we want ways. turn to happen and unique computer the fans Amazon rights, to significantly unlocks we not demonstrate technology to overnight. Nickelodeon, as because we engage attract data generation business and with develop the reality, partners But the Genius, few. TSN, who an never such we have powered technology vision fundamental began check entirely how with leagues is across name existed and brings why help This XXXX, Our before to write consume entire AI to next This ecosystem. the goal because leagues continued and by but want ESPN is digital just work that into largest new winning bring to in fan and of with experience sports real Video, new CBS, won’t Prime value a to in this vision

execution we up Every unique across deepening and our screen, in on innovating towns is are that technology position continue our to technology, to The sports relationship. and second position new harnessing result sponsorship, right of open organization you experiences. and value that successful online our as this should and Developing experiences, we innovative much because to partnerships time invest sees providing have and proof deliver here betting, significantly you we area see outside both personalized today the beyond our in why of and this this screen broadcast and massive in accelerates cost lead more. understand strengthening

I’ll closing But call come the financials. hand I’ll Nick back remarks. for my to this to point to in cover our now,

Nick Taylor

Mark. you Thank

year heard, consistent the you’ve XXXX of execution. already As was

the Looking where But ahead, be with quickly year XXXX EBITDA strong we let’s consider of results up our cash the in free first, flow XXXX. execution discuss to of inflection, expect ramp to growth we generation.

the finished currency This our We’ve presentational quarter group revenue, headwinds. this EBITDA, year $XXX adjusted $XX We respectively. the each in in is $XX guidance and in year. communicated with million despite exceeding million, million of group and million $XXX

to fourth guidance out of this is rate throughout exchange we GBP January quarter. exchange seen X.XX. set provided and Therefore, growth XXXX This U.S. assuming much for a a rate X.XX X.X constant of in our have volatility. view currency year, and As a initially reminder, the presentational currency we dollar of prior remove haven’t the fluctuated

setting apples time, we to financial results give exchange our final also the comparison our our at to referenced the an time And of of using rate to have performance. guidance the apples

out close As to which an in you the performance revenue slide will $X if our margin, nature. FX would see our EBITDA and entirely $XX on have and XX, not adjusted million headwind, greater million guidance even outperformed is presentational by for

XX% XX, revenue, you’ll of currency On which hand group $XXX breakdown year-on-year of million. QX constant side right to grew see the the slide in

products or As we three courses all pry expectations. line in in performed XXXX, ahead of

betting and expanded million currency constant This revenue services First, to negotiations, by and $XX value products. XX% new growth. with add representing contract and wins, customer was offering grew driven renewals, of

revenue This primarily highest continued growing was to customers strong constant advertising spend quarter. $XX in programmatic through major the its North new XX% million and in Our pace, America, driven by services. currency

Ports revenue spectrum. year-on-year increased nearly to also driven mostly second million XX% $XX by

our improvement not in in adjusted to line this from need Given EBITDA cost is of nearly up of quarter relatively with $X resulted million QX XXXX does in year-on-year. grow fixed which $XX base, marking significant the million revenues, group

track we’ve the highlight to year. want established we XX, the slide to on consistent throughout Moving record

our start, revenue highly quarterly issued targets, individual the targets each XX This investor at January adjusted we for on groups. performance year. XX our quarterly EBITDA sums this mentioned Mark revenue us and and to to of detailed our day, financial product forecasts including measure financial As targets group for

we or hit those all we exceeded as of to targets. reflect say on we Now, are that XXXX, delighted XX

performance to wanted group, underlying to our provide touch dynamics on quickly position. our also by to I as to geography our the performance addition of In you product a to by helpful

expand. start, $XX generative our and outside in we today, from profitability in XXXX continue continue U.S., about and have is to to high million $XX range, as narrowed the at already the XX% in the margins cash our million in mentioned highly they Mark towards the with march losses As approximately U.S. trading XXXX profitable XXXX. In to

position U.S. growth the this We the to significant better investments have made in over to capture the ourselves in few last market. years

grow me is to Meaning business, guidance. At point XXXX time, core this behind slide more in like going us. in XX forward. do we where that revenues expenses heavy to our EBITDA line our detail on not operating in brings with nearly much now and of our provide investment need revenue This

XX ago, When months some was U.S. the X.XX. we initially issued Sterling guidance XXXX ratio exchange dollar

sit as exchange XXXX, this we rate now here Now, X.X. today, is March

revenue accordingly. are we So our adjusting outlook

we’re the difference our outlook our rates. guidance U.S. time XXXX as adjusting chosen our not that clear, last reported year. our are numbers business currency. in the of from Given we the has changed dollars revenue presentational view To underlying gave be exchange And simply initially reflect in

We’re in line $XXX million XXXX consensus. to current in now in generate expecting with revenue

our is the hedged flagging paid by It lesser impacted outlook group that are degree. many expenses EBITDA and is worth of XXXX also most and dollar U.S. our in is naturally currencies of than our therefore profitability adjusted other

also We $XX expect line EBITDA in with in group generate in XXXX adjusted current consensus. million to

guided product by another breakdown well find we forecast and detailed will how EBITDA as XXXX. course, to in of as quarter of you group forecast revenue our the of by Additionally, revenue just adjusted like group,

feel in so to We this in that are year. we guidance confident on that and again XXXX pleased with fact delivered detailed the ability our

execution. year that year was XXXX the at mentioned start the XXXX the And inflection. of of that is profitability I

that the margin. You This incremental million the leverage that expect over should group we EBITDA is adjusted increase at same XX% revenue adjusted to fixed growth relatively business, at on group cost can nearly proof us XXXX expected XXX% by contributes meaning the our grow to not of see drive enables $XX EBITDA in which the a base revenue a of in operating pace. to

Slides this illustrates point. XX

increase order in for predictable. investor adjusted a and our of in year. clear, don’t to And cash we it XXXX much our cost To our we day. base on expenses is XXXX. operating you the like detailed revenue to Here, expect materially EBITDA highly will achieve see expected expectations our in Again, breakdown provided be

approximately costs, are For example, growing take million only and Rights to which $XXX year, $XXX were XXXX, in this million XX%.

our and sales and million other expenses, in and in that marketing, were XXXX, remain XXXX. Additionally, number $XX will operating G&A R&D

well, as non-cash reduce our to also beginning stock-based We’re compensation. expenses including

on as For as December $XX be basis, in $XX nominal and will in million a a approximately XXXX, XXXX of from that expect remain we and percentage level revenue. decrease awards this granted of approximately down should XXXX, as million

we As equally we’re control growth, much cost generation. and cash focused revenue flow as on had on profitability, focused

with generating total million of to to cash $XXX $XXX million flow in XXXX million. expect above finished We $XXX range of growth positive And we guided cash our half second continued in begin with the thereafter. XXXX

shortly. Much development unlocks allocated Our technology Second was us cash a which flow to internally competitive of forecasts costs, capitalized this include we’ll and million in products, was XXXX. the future about advantage hear has which $XX software of Spectrum monetization investment developed opportunities, which given

be In before reducing will it XXXX, expect we XXXX. XXXX, XXXX starts and this with in outflow line cash in

our QX, rates In QX cash $XXX point to payments of sometime come flow the and investment. before the to specifically, we expect to outflow an to due closing exchange of million XXXX We balance principally annual cash expect turning working positive seasonal in XXXX our capital CFL approximately remainder current related year. on our QX in for cash be

Lastly, associated as common tax all remove was this of certain warrants shareholders and noticed eliminate shares for simplify have recently with a you overhand stock. matter a future our accounting our and exchanged may outstanding those that diluted legal warrants. to public capital of purpose we structure, of for considerations transaction of housekeeping, and The costs common ordinary

of flexibility, going As a structure have result, forward. can capital be and should certain company investors greater our financial

reduction diluted presentation, build will appendix can earnings share which illustrate count. As always, of the you count the fully in in share find an our updated our

the note, back now Mark remarks. closing turn that will on to I for And call

Mark Locke

Nick. you, Thank

it our and all thought been Before by few by suddenly with In leave I’d didn’t lines like now away Q&A, the and aspect life. understand me they If human to ChatGPT. is of final realize demonstrated before, capabilities blown excites Genius’s the machine anyone to past we’ve soon AI ChatGPT. powered about change every Spectrum learning sports equivalent will the most Second that the technology opening AI you business. a of months, technologies like

enables a commentator. pundit or understand beyond level Our best to at sports technology far autonomously even the machines

other Spectrum’s opportunity learning level. our by vision this unique every machine so of personalized data and the now AI, capability Second on at able have advantage not understanding I’ll distant you corpus way will person and and computer fully in a unique training already how We built a a of and over game to any today. apply preferences. this development. unparalleled Leveraging is to better, coach, every decade through a give to of sports revolutionize In generative the of be exact vision tailored future, player, example we’re watch fan, one their small needs doing technology.

Up until if last produced could watched by you’re who year, same the exact broadcast. an all geek This interest. Spectrum to your people [Indiscernible] a tailored watched million XXX data fantasy year, Second the last player, month or Super you alternate watch Bowl

of has automatically. produced even season broadcasts fans, and and the games personalizing technology EPL the casual kinds experience these heads, and automatically Our through kids for playoffs games analysts, all betters, regular for personalized data NBA NFL

solutions of another with the example, we NBA recent finding have leagues, bringing and game those on technology Sports challenges. focused As partnership announced forward yesterday Genius by Like future. our the technology to Second other their we their address have Spectrum challenges expanded the NBA. to the is that

solutions by next richer fans engage generation enabled experiences. personalized We’re its better help tech more of the creating to NBA implementing our and

first see all real on opportunity NBA augmenting pass, where hand insights in to this next League the time. You with live and broadcast we’ll data will be gen have

engage are from helping These start is has data leap data on paradigm has that market. this represents where new our mesh in new Dragon. of head next a have the two NBA and with And extending are application today, generation a and This how that the just just is for that us the Additionally, their synthesizes critical of audiences. examples quantum we is leagues we of technology This technology points. further a partnered which billions sports system the on-court beginning. platform track will the in better many our technology

fits for all. can as you you, sports able one interact Just is beginning will the experiences tailored give for with tailored of provide and you to This personalization of and specifically you. the for size we be soon ChatGPT all, specifically answers the personalized end

brand create Genius is leverage will fans. this products across range that ultimately broadcasters, positioned and and bookmakers, a moment uniquely of value to benefit sponsors, wide

stage, While only for center technology just Spectrum strategy developed taken has AI has over its and a Second decade.

pleased version to While been during on and complete partially the recently. we executed that we in have begin are confidential competitively to unveil potential and sensitive have that and time, more invested we

and visual on bringing showcase of products upload but our fact, of the so to We years demonstration ahead. months and growth early Sports are believe wide week. Investor AI. In through plan is you to a sports lot range is concepts our will to with share the we driver to excited already this revolutionizing in this we fan a There more Relations a the too experience we’re major how and business, industry website of next life. come is Betting these it

our On thank for as note, build the leadership the for technology to support that, I’d we open we our like their with Sports in line will position And market. to now that Q&A. Digital continue investors

Operator

Group. the Your Craig-Hallum line first comes Ryan Capital [Operator Sigdahl from question Instructions] from

is Your line open.

Ryan Sigdahl

all progress day, the to start business an guidance. Nick, Good with congrats and on I Mark, updates. want

guess of estimate? kind a you FX when range, of two, curious, provide why last your why can than consensus give One, the is And pick underlying So three, not assumptions. little Nick, I if higher point reported. a more you as

guess So you’re a with underlying reaffirming curious, outperforming the why I ago. the year assumptions from business

Nick Taylor

is guess I first Ryan. thing Hey, changed. the underlying is, the assumptions haven’t Well,

Ryan now it. assumptions still approximately months there’s So out same set we XX in wasn’t ago the that

as today until using if guiding science, today, which Ryan. and XXX, in U.S. range. changed. as not dead rate And XXXX. the exact hasn’t be business almost our X.X, remarks, still percentage the on X.XX, given to the But right, we’d dollar exchange we’re prepared to is the underlying an XXX think Sterling, is I at So It’s said, you was movement,

other X.X that We in hit currencies. will of and in euros, What lots in Sterling, dollars out. we is we’re very set that revenues are that we’ve we confident have the metrics

terms of a giving we year. not didn’t In a range give range, last

very in the hit forecasting. confident very we we metrics to XX our prepared in XXXX. hit that we’re X.X pleased at XX precise all set will said that the we We’re that and to set remarks, again, of And out out

Ryan Sigdahl

I guess place maybe Nick. just It XX is the a feels in up, bigger, like it outperforming follow months a better, ago. than business was

reiterate So those underlying business assumptions when quarters? same I four guess last the why has outperformed each the of

Nick Taylor

look, Hey XXXX Ryan. Well we’re with very performance. our pleased

hit revenue it’s pleased exceed, hit obviously and both XX from at EBITDA far very well, ago. foreign it less, to relation we also And We’re we’ve just to exceed EBITDA I and or XX the and that we And range that them. XXXX. we’ll as as you’re months out to to those think less repeat to adjusted that that in we confident to is from EBITDA, an an we said, will exchange. actually looking got hit myself, same I XX position exceed, far be XXXX metrics basis, gave, Remember XX, actually issue or within out our set hit the exceed in set we’re which I’ll still in and

Ryan Sigdahl

think to the me, that about for Spectrum, follow have But entry? on contract. going the I’ll just opportunity me. to others. there Fair forward that congrats rates? similar you data looking NBA logical after leagues on enough. versus fairly One And provide up does official provide for do the more That you already seems Second over for you barrier the don’t with services leagues But is, question rights? partner those to any to hearing how turn where

Mark Locke

question. Second throughout Yes, of per hi technology that stack it’s we once it’s the it’s other us to it’s leagues democratize It’s great is Spectrum on for the that a enormous. all basis, – effectively the the have built, if through mean, a Mark. I sport ability

the in remind sort college basketball mean, relationship expect to machines is and technology material. within roughly all the U.S. that, of of a that the over basis. is a something to come were many Basketball do the It one Also which can’t just human sort ability better collect and ability replicated. by events more have global over ability come collect our efficient out a firstly, to So data to the collect a on can a that’s higher much basketball that can’t and much interesting, obviously get It anyone our of the that data. the roll richer much can I that built data than to us things manner. entry you, for game gives be relationships computers of And accessed in very we XX,XXX in richer us with data. It’s barrier NBA FIBA are and because pretty far to data league’s data is our of much, all the be we else. or understand off couple stack globally, And we

final type can only bookmakers it of and again, and that which shift really And of sort accessed data, lead data in And, interesting, through is required collected technology. and by by the broadcasters. of begins type the a point, this think binary required is I collected be that’s that’s

enormous Federation’s will it has to sport, and the opportunity give an Second that. will in will a mesh that technology next is operating Spectrum day is the do the barrier the pretty Leagues, expand a an back the us, and week, of But of sort collected it be in punchline which they’re for expanding investor to out, ability by us can going the unique it technology more be you costs note. we’ll this, that much sell clarity the data, of give ultimately, sets much stack to only it business, it to reduce our will we’re to have huge that greater entry rolling only us we’re on to

Ryan Sigdahl

looking guys. next And forward to Good Mark, week. Thanks, Nick. luck,

Operator

Your next Jed line Kelly a from question of Oppenheimer. comes from

Your is line open.

Jed Kelly

implies Hey, the media at of guys, kind just half. year, great. re-accelerating And a guidance decent maybe one just Thanks. good my of for digit Thanks the then a in in year, single question. segment, XQ in the this on second looking growth XQ, deceleration for taking couple it

you back more So of the going being that books about sports of advertising? some Is what’s driven kind can pulling digital the by talk some we’re on in pressures seeing of there? economic

SEC give of the an can college Big of And that data the for conferences? are we we Mark, where Thanks. and in where then, Big pardons to terms on ones for on at us some you are Sec, Ten rights mind large bigger Ten the come college update conferences just the up the are other

Jack Davison

us hear Jed? you can Hi,

Jed Kelly

you hear me? Yes. Can

Jack Davison

is sorry. Hi, Yes, Yes. Jack. Jed, this

media revenues on HX, question. in just quarter, closely year in to expecting I media forecast. more That’s last high. we to question. more and Just said, down being last our spend unusually you with media your be on media our line really we’re Like

seeing really, our come we’re expectations. back down to So it

terms it’s media of performance, customer new how the happy tech the course We’ve at you a when look we’re of In of going. broader wins with really last over got, year, ad number market.

We’re on non-betting side things. starting the of

starting growth. in terms low good we’re of from there a success And very base. We’re seeing

we’re very So it. about positive feeling

Mark Locke

moment, its lot there’s, there’s on on Jed, Mark. your in on your going And the And up at conference a the pick just conference the, space. in to Yes, questions.

before just the conference need for to to thing new first is year, this the any hit is, that exceed points deals. of or the don’t hit us I think win I sort numbers we

bringing bring do, and them us. And for if rights there’s, sense in only no new in. be for any they if we’ll to, us profitable, requirement make they’re deals So Jed we there’s

there’s changes conferences, coming of a place. fantastic there And making SEC and an Big operational obviously lot through leverage level. the on, of progressing. look, But So terms moves, we Ten in we’re The sort in have the also of that’s that as specifics some Commissioner the are going in business. there’s incredible

of our sense very much got point make I the Madness. from placed very well on importantly, deals everybody is. the March But think, Madness those NCAA. more soon. relationship with we’re view, sure is up as we’re March incredibly with else I’m us, focused We’ve they as for coming

the bookmakers direct that position of works revenues enormous to the generate us as, both an the with technology, data strong very provides works, well and deploy That for have a our with in there. us as from league’s relationships opportunity relationships

pretty our position feeling college. we’re about in good So

that as in year point months pretty The really, in the is technology the over college made is XX complete of year last other now. sort rollout well we’ve a

of So most technology areas. the schools, have we we’re in our in majority of the

very, second the basketball be Ryan, college very we’re that back to data point call, is coming to able to other last I Spectrum we’re to through a out of technology deployment us is the is sports to position. to and through Second going And the going going strong made leave that collecting again, none. So in the do in the

Jed Kelly

you. Thank

Operator

Your next line Mike from Benchmark. comes of question from Hickey the

Your line open. is

Mike Hickey

sort first Brandon here Charles, from the huge EBITDA just the see. think nice congrats of you sort Nick, guess the XX% obviously, your the margin. operating leverage see Mark, on just to little us think elevated looking revenue Hey give spoke Yes, we that me. and levers nature I that thinking I about growth. quarter that one contributing this sustainability medium you I bit trend of of questions two your of And that should the how is guide, over to Can more guys. expenses? that about sort And of the XXXX term a you that guess, color at sticks incremental

Nick Taylor

nature Yes, I that the line Hey, point. fixed what you’re is heard base, Mike, others of need me for Mike, years number our seeing And it and cost right inflection XXXX our that that you a and can see to of in doesn’t look, have that mean, guidance. talk we’re yes, revenue. And grow with you about release in Mike.

to fixed that’s due nature revenues of incremental to base. XX%. to And the the around expecting cost drop about We’re

cost you marketing costs, doe aspects If inflationary that R&D expect the the is a therefore, flat G&A, the forecasting that any on at collective we’re operating those to subsumes in individual on all numbers of actually year-on-year, lines within base, the sort flat look basis. be and

driving going of to that terms dynamics forward, the In change. are going aren’t that

with the at base. into revenues above rate So those a heightened through dynamics, growing beyond continue Mike XXXX we’re indeed, XXXX. the cost expecting to And

Mike Hickey

obviously we’re Spectrum. innovation of Alright, that NBA product week. innovation, The highlighted incredible are on that’s with your doing we’ve in looks going coming question you to guys seen tech see have you Nick. lot And a like of Second and a same that for it thanks obviously, lot the next still what me Pretty by deal.

the being provide operator, -- driving granular think is great you examples, great or if mean, monetization M&A your that about you And in I your a deals. retention, of if about, necessity your, and there. offering you of driving, the you’ve partner’s? or it’s you’ve of a and with Spectrum obviously guys. of, kind how you your sort how or from expand you done in retention, in or opportunities you’re the can curious perhaps piece effective terms growth maybe is partners. And some sort And of here. you partnerships of you’ve that’s How any or writes got investing your could better continue tech to that there’s player then more, had Here, of stack for think sort do these big of engagement, of incremental, also your sort how future the think your sheet, tech balance Thanks, tech products Second tech

Mark Locke

out coming our rights done. with our very we NFL, we’ve lot Look deals. that and this improvements investment of year, we our And tech to Yes, in clearly to going deals you’ll also and through essence, in to the start we’re that CBS. now fact, our in said partnership for our do do that for Amazon with deliver that. thanks partnership business are rolled that value seeing stack deals a relationship years the seen the deals, But ability example, is with ESPN, have ability that the the rights is in in the and to in TSN, and and in rights renew in something I’ve the and we

We’re position. very, strong in very a

of at we’ve want money We any technology even, As tech, we we a what amount investments all right. make if head a as of have the in we start. because that the opposite this And And may flat make is that moment. we in increase assess we’re on lot in our And direction we that that optional. that investments to anything, moment, don’t balance fundamentally, with the even head that that the time way. have sure We frankly, level result comfortable we goes choose investment, of made of we an spending our invest. very that feel need. to we the job It’s and investment, really needing sort massive the the at and to see of may of we start are level the the that that on, we’re getting awful

So that’s there. focus our

it. -- what’s market always that got terms understanding said, then In need. of the and be we never we AdSense, I M&A. I If say screaming you should never like, things and think excellent everything and, Look, yes should as we’ve do available. well, very moment, assessing of place. the very, we’re job investment But a an positioning, an moment we at obviously we’ll and position; happy job really good in with feeling the we’re we’ve of done at the excellent so

Mike Hickey

luck Good Mark. guys. Thanks

Operator

Jason comes Bazinet question from of Your from line next a Citi.

Your open. line is

Jason Bazinet

you had towards the question in shape XXXX. sort as EBITDA just of that good glide U.S. Hi, and profitability morning. a I losses on of curve

ago, widening, were year losses. misheard I I maybe sounds you, to were U.S. XXXX. And losses talking actually about it they relative you to think narrowed XXXX, I EBITDA about $XX in a about you of like think million

the expect your pause was to think. there before profits baked you just little of wondering, a gist bit the in you XXXX? I into that know do more the you U.S. Or So a in is You get XXXX? of in get sort just bit question, conservatism retrenchment just baked of of of I in guidance was XXXX, investments I

Nick Taylor

expected about position. it is, And business look segments. said guess the we all was SECs. a detailed at operate when you we that last narrow you in at said, at and round million give EBITDA don’t when about a, -- $XX expecting it’s Jason. a I But think the in the such spoke heard XXXX. of sort then don’t around And our as of that our the we that, I XXXX. I U.S. the in terms was style therefore, you’ve profitability $XX remarks, little loss I to a In global And narrowing running say U.S. think Thanks, XXXX. And always I right. review. Great. anticipation first about we’re bit SEC to having of thing prepared we’ve in We broad look hit million I’d seen year,

Jason Bazinet

you. thank Okay,

Mark Locke

of issue the really to what of reiterating XX is that, cash so flow group well. see going a as positive Yes, HX I’m on level

that. reiterate to just So

Operator

Credit next Suisse. your from of And Chaiken from line comes a question Ben

line Your is open.

Ben Chaiken

morning. of XXXX wanted guidance XXXX. versus going? on your how’s XX% follow Hey, in through it I Good for to dig

the that higher think the we Or you where back forward. As do step of moving just right right is through XX% and be this kind longer-term, from. flow than coming expect for the where I’m here’s or business? lower to And

you mentioned year, you’d some incremental FX, impacts, in And then especially operating which presumably, cost. launch you rights think had on, some EBITDA I get than that your this leverage revenue. states less

on how we moving get I’m then calling out forward. and and of tail cost there’s just sense and want puts there. what’s if but a takes of into So through any a provided the in not sure of moving some the little parts, flow the about dig Thanks. that’s side, think to

Nick Taylor

detail, a Hey mean, of I Yes. line on we’ve lot Ben. the to base line guess on certainly by I XXXX, cost quite given a basis.

$XX can we’re an see, of that media. got, you think you’ve increase to revenues in kind got of So up we’ve that million. be I Year-on-year eight forecasting is

areas, which rate. in year-on-year. cost cost on talk drop through of XXX%. of at the then operating XX, quite bedding know, higher million sort The to there a as you on XX about base, and $X million. and you Indeed, get look through as So million that’s When the XX rightly to on say, $XX the a flat a million writes to to some $X at that around you close drops you And how revenue base, rest basis. XX, the hence year-on-year, it then up EBITDA million are actually your costs $XX much

XXXX. at through then XXXX to to continue in guidance however for we exist XXXX expect We’ve not those given play specific, dynamics

about you’re in growth When job that’s say, XX%. teen’s XX%, growth. It’s through on at you this XXXX similar revenue when currency constant and get a XXXX, certainly be sort revenue they levels at to XXXX. the you kind XX%, expected your a you those And continue. level. dropping two basis, strong should of that got it were as looking look broadly And dynamics those search You’ve numbers, around of high for when beyond

Mark Locke

to it’s also, macro probably of just And to sort out level. take it adding worth a

in revenues, -- We through is, board. comes mentioned on on just our of state generate board -- which to comes them beneficial. That drop as But a new marketing, on us new terms is through a from new us, the which cost actual a new that’s switch for that’s cost us You obviously may states the else. clients state it is doesn’t near coming anything that XXX%. new states

So, it’s for us. new very a very, a good board when thing very, states it’s come do on

Nick Taylor

nature go dropped you that two fixed base. got global you areas our beyond our out obviously that, of Ben, do know costs topic. Brazil, again, just much doesn’t XXXX, incremental impact Certainly given our it’s remarks, think on business really we in when also XXXX, again, mentioned if two of on because it’s those we our get prepared it have it’s got And worth when you I a what don’t reiterating. sets, XXXX, you you’ve hot in is other really you’ve cost Currently, particularly, as like but

Ben Chaiken

at Right, simplistically what for getting FX was through. I tailwind follow guess is I on a is you

doing than a XX% in than forward, XX%. if good trying if less for normalize level we FX, just to moving should you’re really, -- can. out So expect we figure less If how you or this we I’m is

Mark Locke

numbers of And the revenue I’ve you defend X.X. we and the at you the X.X, If but expect at I attacks. look all obviously, it, base. quoted to No cost regardless at

flow it basis. that to X.X, whether on that X.X, through still So whatever, that’s at or we’re expecting

Ben Chaiken

rates. guys remarks called at multiyear think I your the then this just some NFL At outlook? you context win day, for you and more in mentioned you rates. in investor win game, your day, industry have And maybe to others XXXX that your the add outlook Okay. win investor provided prepared Have embedded in out in the of and proven context

those just I’m changed at all? have curious, So

Mark Locke

Yes Ben. hi

So Jack on. go

Jack Davidson

Ben. Hi, Yes.

Davidson, Chief Jack Officer. So Commercial

I this good So it’s really to think stuff. at look quite

thing have look a rates. the assumptions assumptions going the win interesting, to from really which good we, that seen we really started stuff, But been And the that good. at either when we back this when You’re underlying really, in things that’s look year look you at out when The interesting absolute we’ve things. of we pretty set And earlier the less kind GGR. terms, investor or are what on handle we’re in but seen. percentage started to These that consistent day is more are really going the we those important we’ve starting see, with play focus to versus that of, in pre match metrics, what’s on.

NFL, same to at kind massive And massively versus because parlays, you compared of success one margins those the GGR think we fundamentally product a match it’s is skewed pre in in show GGR So skew it way. the slightly the of started game moment. pregame they, the of play of where which when

they’ve terms. up our closely that’s year-on-year, about at of gone in GGR what plays, So the more we to something up what gone start like the market. terms absolute look in outstripping is and revenues has clearly XX% seen much we’ve from and absolute from quarter, And that

for that out. direction are starting the as those seen, are trends the have set we we successful the And so And the at. to be trends business we we’re to heading look need

Ben Chaiken

industry. you outlook? so the guys, the improvement that rate Have in Okay, you to have confirm win into embedded just Florida

Mark Locke

Yes.

Ben Chaiken

Thanks.

Operator

Needham question comes McTernan of a from from Company. and Bernie next Your line

Your open. is line

Bernie McTernan

seems questions. sports parlay you up taking focus impact the certainly to know rates. how the just they Maybe now like to books wants a for exchange and thank a follow that it’s for Great, right

I doing you’re for saving DraftKings. think at parlay point one

X.X% the the betting? should pay to how about parlay So think pre we great versus match for X%

Jack Davidson

general more match was same at parlay just fall game, -- pre will a On match game again. exist pre it a just a that Jack a bet. bet. the Same into moment, of On sorry, parlays sort level,

product less U.S. and a pregame for do what ones two customers we a a take pregame rate in different. than we’re this a the big So on number there many the that should on And bet. you on that is writing our When we take world on across obviously,

game As you stuff that same though And DraftKings, evolution shift pretty outsourcing stuff a a to know, of is bit including this positive operators, and to we’ll sort insourcing and terms of which those an rates consistent. always are game on view. a of and our of shift think parlay our from what in I obviously position of in point a take is see

house that out to are of part be house. in doing products, it a those always power because data whether operators need of way will they’re the which in or We

So that’s the position.

Bernie McTernan

flow was Nick, of cash especially Thank to the Understood. second year. getting positive of flow, with free conversion this you. And hatchery half thing for you cash in to guys EBITDA free the the

Mark Locke

hey, think a Yes, couple the got I bit Yes of you things positive. are working half half just flow, Ben. of cash cash the year second so capital the is of be in opening the out, be just to forecasting we called going against of we A flow us. it year, was to

our at the it of CFL XXXX in to seen payments you’ll terms have make But happen as well. also investment. the increasing in year start We of

on and in an then a so cash Second revenues so half positive that flow second you’ll and growth see year, as the obviously, EBITDA XXXX flow, with and cash in in HX year, year, and free forth. generating obviously beyond half a start

Bernie McTernan

guys. Got it. Thanks,

Operator

comes line from of a Robin UBS. question next your And from Farley

Your line is open.

Robin Farley

thanks. Great,

Spectrum and contributing that contracts. the much Can sports your growth you technology the revenue? the in with about new year-over-year net technology [Ph] talked of to You’ve about is how talk Second Thanks.

Nick Taylor

it, Nick. deal long that, you it’s That our and than our the the really position, particularly something in we talked and obviously of revenue sort why excited an more sports it really like Hey, data about we’re know and XXXX. in up is it’s given Robin, about mid-XXXX is really beyond. about growth that’s of story very our in deal that much announced have a of beyond. just normal really a NBA, said, the and opens course, the I, NBA. Robin, And XXXX it’s the extension as beyond yesterday forecast. standing We’ve so opportunities base XXXX partners included camp betting way And it’s opportunities

Robin Farley

So with revenue other include Second XXXX announced haven’t just guidance any Spectrum sports for psychology contracts that you the yet?

Nick Taylor

we don’t need. No,

it sports well. just right the don’t any rights. earlier. the win said more to any areas significant contracts. don’t more tech, across We other I need -- We all We to actually. Mark not But as numbers think need

we’ve out what numbers We XXXX that have do. to on we to set the need just execute

Robin Farley

Okay. XXXX year-over-year that’s Is there Second sport this is anything else in versus growing technology revenue changing at XXXX. Spectrum and

number guidance? flat and to get to Just that, that

Nick Taylor

there’s the There’s nothing the No, one way ups obviously and other. downs. occasional significant or

I on around sporting XXXX, events versus the nothing rolling. You’ve And the called think we significant but out some XXXX. in in prepared then major remarks but XXXX got seasonality of again

Robin Farley

Okay, thanks.

Operator

This your this there And questions concludes time. further for at conference participation. today’s you are no Thank call.

now may You disconnect.

Genius Sports Limited (GENI) 10 Mar 232022 Q4 Earnings call transcript