Genius Sports: NFL Betting Deals ‘Validated Official Data Strategy’

Written By

Updated on

Genius Sports

Investors were not sure how to react on Wednesday as Genius Sports posted its Q2 earnings.

The data provider grew revenues 84% in constant currency to $55.8 million, while group adjusted EBITDA more than doubled to $5.2 million.

However, the share price fell 4% at open before bouncing to close up around 4%.

What is behind Genius Sports stock movement?

Genius also posted a net loss of $464 million for the quarter, as it booked some of the cost of the warrants given to the NFL as part of its official data deal

Those warrants had a total value of around $450 million, while the cash portion of the deal is thought to be worth around $60 million a year.

Despite those costs, Genius said the deal would be cash break-even for 2021, i.e. excluding the warrants consideration. The partnership is expected to be cash-positive in 2022 and profitable over its six-year span.

An important caveat on revenue

It is worth noting that Genius said it was difficult to specify the exact amount of its revenues attributable to the NFL. For instance, the company recently signed an agreement with DraftKings that covered other products like data feeds from the EPL and Liga MX.

Genius could reasonably argue all those new revenues are attributable to the NFL, even if they come from another sport.

“We’re enormously proud of our continued execution in the second quarter and our ability to implement our end-to-end solutions on behalf of our industry partners,” said Mark Locke, Genius CEO.

How do data rivals stack up?

The new figures come after rival data firm Sportradar reported its own H1 figures yesterday.

Genius ($GENI)Sportradar ($RADR)
H1 revenue$109.6 million$322 million
H1 EBITDA$5.2 million$71 million
H1 revenue growth84%42%
Market cap$4.1 billion
$8.1 billion (estimated)

NFL data deals a work in progress for Genius Sports

It has been a busy week for Genius. The company announced three new partners for its NFL betting feed:

The company previously named DraftKings as a partner and is trying to come to terms with the NFL’s other three sportsbook partners:

Locke said those final negotiations were “trending favorably.” He added that the deals done so far “validated Genius’ official data strategy.”

Elsewhere, the company tightened its fiscal-year revenue guidance to $255-260 million and EBITDA guidance to $10-$20 million.