Genius Sports is seeing growing benefits from prediction markets, which contributed to a stronger-than-expected second quarter as the sports data provider expands its business with the industry’s leading exchanges.
Prediction markets contributed meaningful revenue in the second quarter as Genius beat expectations and raised its full-year outlook Thursday. Revenue rose 65% to $195.5 million, ahead of its $185 million guidance, while adjusted EBITDA climbed 54% to $52.6 million, topping its $45 million forecast.
Genius now expects 2026 revenue of $1.005 billion to $1.025 billion, up $15 million from its previous range, while adjusted EBITDA guidance increased by the same amount to $285 million to $295 million.
NFL prediction market deals unlikely
The company is generating prediction market revenue through customer acquisition, market makers and direct agreements structured similarly to deals with major sportsbooks. That puts Genius in a position to benefit whether sports wagering activity flows through traditional sportsbooks or prediction markets.
“In the second quarter, we generated meaningful revenue from the category,” CEO Mark Locke told investors during the company’s earnings call Thursday evening. “And after the quarter end, we reached another important milestone by signing direct commercial agreements with both Kalshi and Polymarket across official data and customer acquisition.”
One potentially significant source of prediction market revenue is not included in that outlook. Genius does not expect the NFL to authorize prediction market operators to use its official data in the near term and has included no such revenue in its 2026 guidance.
Locke said an eventual NFL deal would be “very significant,” but cautioned investors against expecting one this season.
Genius sports benefits from betting shift
Genius’ betting revenue increased 28% to $117.4 million during the quarter despite customer-friendly sports results that have weighed on sportsbook operators.
While competitor Sportradar cited slowing online sportsbook handle growth this week amid the rise of prediction markets, Genius has not experienced similar headwinds and does not expect a meaningful impact heading into NFL season, Truist analyst Barry Jonas said.
Macquarie analyst Chad Beynon said Genius is in a “premier position” to benefit from prediction market growth despite broader concerns about sportsbook cannibalization and regulation. He maintained his Outperform rating and raised his price target to $12 from $10, while increasing his 2026 through 2028 EBITDA estimates.
Kalshi, Polymarket resemble sportsbook deals
Genius’ agreements with Kalshi and Polymarket are structured similarly to deals with large online sportsbook operators, including fixed minimum guarantees and variable upside.
Locke said Genius views the leading prediction platforms essentially as additional Tier 1 operators.
“The deals that we’ve seen coming through are more than satisfying that requirement,” Locke said. “The deal structures, again, are very similar. We have fixed minimums. There’s upside as well as part of it.”
Citizens analyst Jordan Bender said those partnerships increase his confidence Genius can add incremental, high-margin revenue beyond what is currently reflected in guidance. He maintained his Market Outperform rating and $10 price target while raising his 2026 and 2027 EBITDA estimates.
