Genius Sports Revenues Climb 30% But Real Test Yet To Come

Posted on April 29, 2021
Genius Sports
Posted By on April 29, 2021

Genius Sports posted this week its first financial report since becoming a public company.

The figures paint a positive picture, with a 30% rise in FY20 revenue to $150 million. Growth accelerated throughout the year, with a third of FY20 revenue generated in Q4.

Elsewhere, group EBITDA flipped positive, from -$6.2 million in 2019 to $17.5 million in 2020. The Genius SPAC transaction officially closed last week, with the company now trading on the NYSE under ticker $GENI.

Analyst firm Regulus Partners noted the underlying business was essentially cash flow-neutral, thanks to capital expenditures of $1.5 million and capitalized development of $15.9 million.

Great momentum for Genius Sports

Group CEO Mark Locke hailed a landmark year for the business despite the coronavirus pandemic:

“We have entered 2021 with great momentum, bolstered by our recently-completed merger with dMY II and NYSE listing, as well as our exclusive partnership with the NFL,” said Locke.

“I am more confident than ever about the opportunities ahead as we continue to leverage our unique technology and scale to grow alongside the rapidly expanding global sports, betting and media ecosystem.”

2021 a huge year for Genius

The Genius financials are going to look dramatically different in 2021 thanks to the company’s official NFL data deal.

Genius is thought to be paying around $120 million a year for those data rights over six years. Half of that will be paid in equity.

Those costs will need to be covered by increased fees from operator partners. In turn, those fees could make NFL betting a loss leader at some US sportsbooks if they take the official feed.

“The extent to which US-facing operators are able to make room for this additional cost and whether they will be tempted to take ‘open source’ data … is a significant value question for Genius,” Regulus said in a note.

“One way or another, the sports data landscape will be changing beyond recognition in the near future.”

That battle over official league data versus open-source data could even spill over to the courts, as it has in the UK.

Following the results announcement, Genius share price climbed 0.7% to $21. That equates to a market cap of around $3 billion, or 20x trailing 12-month revenues.

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Brad Allen

Brad has been covering the online gambling industry in Europe and the US for more than four years, most recently as the news editor at EGR Global.

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