Genius Sports Stock Jumps On Strong Q1, Upgraded Guidance

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Genius Sports stock

Genius Sports shares jumped nearly 10% on Thursday as the company posted strong Q1 results and upgraded its revenue guidance for 2021.

The data company reported Q1 revenue growth of 52% year-over-year to $53.7 million

Adjusted EBITDA rose 414% to $9.3 million, up from a net loss of $5.3 million last year.

“We delivered superb results in the first quarter of 2022,” said Genius CEO Mark Locke

Upgraded outlook for Genius Sports

The company raised its FY2021 revenue guidance from $190 million to $250-$260 million.

“Our strategy of powering the global sports data ecosystem has supported our growth in the quarter,” said Locke. 

“We are confident in our ability to continuously improve our end-to-end solution and deliver on our increased guidance for the year.” 

EBITDA guidance for the core business was also raised from $35 million to $35-45 million.

More details on NFL data deal

The company also held its first earnings call since becoming a public company on Thursday. 

Analyst questions centered around the company’s NFL data deal, worth an estimated $120 million a year over six years. Half of that will be paid in equity.

However, Genius said the deal would be cash breakeven for 2021, i.e. excluding the equity consideration.

The company said it would then be cash positive in 2022 and profitable over the lifetime of the deal.

CEO Mark Locke referenced a similar deal for official UK soccer data. He said that agreement allowed Genius to package up other services and ultimately secure a higher share of operators’ B2B spend.

Official vs unofficial data

Of course, it means operators are going to have to pay up, and $120 million is a lot to take out of the NFL betting market each year. In fact, US operators made only made $278 million in NFL betting revenues in 2020, according to state-by-state data.

Genius, however, dismissed concerns that US sportsbooks might not pay up for the official data feed.

The official product is more than just data, and includes advertising and engagement tools to find and keep players, Genius said.

Focus now on execution for Genius Sports

Analyst firm Regulus Partners said the key question now was whether Genius could add enough value from those areas to justify “premium pricing.”

Regulus added: “Genius will sink or swim on commercial drivers, technical competence and operational execution – not daydreaming about what the size of the US market might be in five years’ time.”