Sportradar Posts Record Annual Growth, Rise in US Betting After Q3 Cuts

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Sportradar stock surged Wednesday after the data and analytics company posted record growth in fiscal year 2023 on the back of robust US sales.

The company also announced a stock buy-back plan.

Sportradar reported FY2023 revenue rose 20% to $953.1 million (€877.6 million.) That is at the upper end of the company’s $945 million to $955 million (€870 million to €880 million) outlook range, driven by a 30% rise in US sports betting and a 20% rise in rest of world (ROW) betting.

Meanwhile, adjusted EBITDA increased 30% year-over-year to $181.1 million (€166.8 million). SRAD stock was up more than 12% as of 12pm Eastern Wednesday. Volume was already more than four times its daily average of 251,461.

Sportradar notes US live betting momentum

Every percentage point of wagers the company converts from pre-game to in-play adds a $1.2 million flow through to revenues without cost, CEO Carsten Koerl said.

“We expect to outperform the market growth in the US. The shift toward in-play betting is boosting the outlook for the business too,” Koerl said during the Q4 earnings call.

Revenue from its NBA and ATP Tour deals also fueled the rise in US growth. The ROW betting increase was attributed to growth in the company’s audio-digital segment and recent deals with the NBA and Conmebol.

CEO talks live streaming products

Earlier this week, Sportradar announced a deal with the NBA to integrate its emBET product into League Pass broadcasts, which embeds links to bet through DraftKings and FanDuel as fans watch.

“We are very excited how this has already proven itself in the marketplace, generating an approximately 10% higher margin for sportsbooks on their betting ticket,” Koerl said of emBET.

Koerl hinted at more enhanced streaming products to come. He added that further integrating game data insights into live streams can provide pathways to better monetization beyond sports betting, including ticketing, sponsorship and merchandising. He said the NBA is currently exploring it.

Finishing the year strong

Revenue increased 22% year over year in Q4 to $274.4 million (€252.6 million,) which management attributed as the primary driver of adjusted EBITDA growth of 13% to $43 million (€39.5 million.)

That marks improvement from the previous year, when the company lost $0.13 per share in Q4.

It came after the company made cuts to staff and revenue guidance in Q3, aimed at lowering FY2023 labor costs by roughly 10%

Sportradar implements $200 million buyback program

Over “the coming quarters,” Sportradar intends to buy back $200 million worth of stock, roughly 6% of its trading levels as of Wednesday, the company announced on the call.

Sportradar would be one of the few tech-based gambling companies to implement a repurchase program, Citizens JMP Securities’ Jordan Bender pointed out in a financial note.

For FY2024, Sportradar is advising $1.1 billion (€1.050 billion) of revenue and $217 million (€200 million) of adjusted EBITDA, which would each reflect 20% growth year-over-year. The guidance assumes a 1.07 Euro to USD exchange rate.