- Group Revenue of $87m, exceeding second quarter guidance of
$80m
- Group Net Loss of ($10m) and Group Adj. EBITDA of $16m,
exceeding second quarter guidance of $14m
- Year-to-date Group Adj. EBITDA more than quadrupled
year-on-year to $24m
- Raising 2023 Group Revenue and Adj. EBITDA guidance for the
second consecutive quarter to $410m and $52m, respectively, up from
prior guidance of $400m and $49m
- Genius expects to expand Group Adj. EBITDA Margins from 5% in
2022 to 13% in 2023
Genius Sports Limited (NYSE:GENI) (“Genius Sports” or the
“Group”), the official data, technology and broadcast partner that
powers the global ecosystem connecting sports, betting and media,
today announced financial results for its fiscal second quarter
ended June 30, 2023.
“We enter the second half of 2023 having reached a significant
inflection point in our business,“ said Mark Locke, Genius Sports
Co-Founder and CEO. “Following the financial outperformance in the
first half of the year and the recently renewed partnerships with
FDC and the NFL, we have validated our core strategy,
differentiated our technology stack, and proven our sustainable
business model. The ongoing success through the second quarter
perfectly demonstrates our balanced approach in delivering
near-term results, while accelerating Genius towards our long-term
growth and profit targets.”
$ in thousands
Q223
Q222
%
Group Revenue
86,847
71,117
22.1%
Betting Technology, Content &
Services
56,862
44,831
26.8%
Media Technology, Content &
Services
18,357
14,999
22.4%
Sports Technology & Services
11,628
11,287
3.0%
Group Net loss
(10,298)
(4,755)
(116.6%)
Group Adjusted EBITDA
15,650
8,362
87.2%
Group Adjusted EBITDA Margin
18.0%
11.8%
6.2%
$ in thousands
1H23
1H22
%
Group Revenue
184,076
157,040
17.2%
Betting Technology, Content &
Services
121,602
94,552
28.6%
Media Technology, Content &
Services
40,121
39,128
2.5%
Sports Technology & Services
22,353
23,360
(4.3%)
Group Net loss
(35,466)
(44,953)
21.1%
Group Adjusted EBITDA
23,692
5,469
333.2%
Group Adjusted EBITDA Margin
12.9%
3.5%
9.4%
Q2 2023 Financial Highlights
- Group Revenue: Group revenue increased 22%
year-over-year to $86.8 million. On a constant currency basis,
revenue increased $16.1 million, or 23% year-over-year.
- Betting Technology, Content & Services: Revenue increased
27% (28% on a constant currency basis) year-over-year to $56.9
million, driven by increased customer utilization of available
event content and growth in business with existing customers.
- Media Technology, Content & Services: Revenue increased by
22% (23% on a constant currency basis) year-over-year to $18.4
million, driven by growth in the Americas region, primarily for
programmatic advertising services.
- Sports Technology & Services: Revenue increased 3% (3% on a
constant currency basis) year-over-year to $11.6 million, primarily
due to higher revenues from non-cash consideration contracts.
- Group Net Loss: Loss from operations narrowed from
($39.7 million) in the second quarter ended June 30, 2022, to ($7.8
million) in the second quarter this year, driven by improved
underlying performance. This improvement was offset by a $29
million reduction in gain on foreign currency compared to the prior
year, resulting in Group net loss of ($10.3 million) in the second
quarter ended June 30, 2023.
- Group Adjusted EBITDA: Group Adjusted (non-GAAP) EBITDA
was $15.7 million in the quarter vs. $14.0 million guidance. This
represents an 87% increase compared to the $8.4 million reported in
the second quarter ended June 30, 2022.
Q2 2023 Business Highlights
- After the reporting period, Genius extended its strategic
partnership with the NFL
- Long-term partnership now continues through the end of the
2027-28 season
- Genius remains the exclusive distributor of official live game
data and Next Gen Stats to the global media and betting
markets
- Extended agreement also includes exclusive right to distribute
digital advertising inventory and marks and logos to global
sportsbooks;
- Low latency Watch & Bet video feeds to international
sportsbooks, now including U.S. sportsbooks;
- Integrity monitoring services for all NFL games
- Extended official data partnership with Football DataCo, the
data rights holder of UK football, covering over 4,000 events per
season across EPL, EFL and SPFL
- Secured AI-powered tracking technology expansion with the
English Premier League and English Football League through
best-in-class Second Spectrum technology
- After the reporting period, Genius launched innovative digital
features for the FIFA Women’s World Cup Australia & New Zealand
2023™, leveraging Second Spectrum technology to enrich the
game-viewing experience
- Expanded integrity program with The German Football
Association, utilizing a leading intelligence system to combat
threats of match-fixing and betting-related corruption
- Awarded ‘Best Technology for College Sports’ at the Sports
Technology Awards 2023 and the ‘Sports Betting Supplier’ prize at
the EGR North America Awards 2023
Financial Outlook
Genius expects to generate Group Revenue of approximately $410
million and Group Adjusted EBITDA of approximately $52 million in
2023. The Company also expects to reach an important inflection
point as it begins generating sustainable free-cash-flow in the
second half of 2023 and beyond.
$ in millions
Q1 2023A
Q2 2023A
Q3 2023E
Q4 2023E
FY 2023E
Group Revenue
$97
$87
$100
$126
$410
Betting Technology, Content &
Services
$65
$57
$64
$80
$266
Media Technology, Content &
Services
$22
$18
$24
$31
$95
Sports Technology & Services
$11
$12
$12
$15
$50
Group Adjusted EBITDA
$8
$16
$17
$11
$52
Note: values may not add up due to rounding
Financial Statements & Reconciliation Tables
Genius Sports Limited
Condensed Consolidated
Statements of Operations
(Unaudited)
(Amounts in thousands, except
share and per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Revenue
$ 86,847
$ 71,117
$ 184,076
$ 157,040
Cost of revenue
62,173
61,817
149,870
163,192
Gross profit (loss)
24,674
9,300
34,206
(6,152)
Operating expenses:
Sales and marketing
6,589
8,973
13,980
18,205
Research and development
5,812
7,734
12,081
15,125
General and administrative
19,618
32,282
37,692
65,086
Transaction expenses
496
-
1,324
128
Total operating expense
32,515
48,989
65,077
98,544
Loss from operations
(7,841)
(39,689)
(30,871)
(104,696)
Interest (expense) income, net
(202)
(375)
216
(766)
Loss on disposal of assets
(11)
(1)
(22)
(7)
(Loss) gain on fair value remeasurement of
contingent consideration
(376)
-
(2,809)
4,408
Change in fair value of derivative warrant
liabilities
-
4,678
(534)
13,420
Gain on foreign currency
1,496
30,122
2,297
42,754
Total other income (expense)
907
34,424
(852)
59,809
Loss before income taxes
(6,934)
(5,265)
(31,723)
(44,887)
Income tax (expense) benefit
(3,952)
61
(4,600)
(515)
Gain from equity method investment
588
449
857
449
Net loss
$ (10,298)
$ (4,755)
$ (35,466)
$ (44,953)
Loss per share attributable to common
stockholders:
Basic and diluted
$ (0.05)
$ (0.02)
$ (0.17)
$ (0.23)
Weighted average common stock
outstanding:
Basic and diluted
208,505,216
198,347,397
207,362,662
197,060,987
Genius Sports Limited
Condensed Consolidated Balance
Sheets
(Amounts in thousands, except
share and per share data)
(Unaudited)
June 30
December 31
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$ 89,812
$ 122,715
Restricted cash, current
-
12,102
Accounts receivable, net
61,839
33,378
Contract assets
37,069
38,447
Prepaid expenses
32,690
28,207
Other current assets
815
1,668
Total current assets
222,225
236,517
Property and equipment, net
11,759
12,881
Intangible assets, net
144,913
149,248
Operating lease right of use assets
5,895
6,459
Goodwill
324,549
309,894
Investments
24,045
23,682
Restricted cash, non-current
25,348
24,203
Other assets
10,065
10,453
Total assets
$ 768,799
$ 773,337
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$ 23,599
$ 33,121
Accrued expenses
59,686
56,956
Deferred revenue
41,589
41,273
Current debt
7,400
7,405
Derivative warrant liabilities
-
6,922
Operating lease liabilities, current
3,083
3,462
Other current liabilities
13,443
22,001
Total current liabilities
148,800
171,140
Long-term debt – less current portion
29
7,088
Deferred tax liability
15,767
15,009
Operating lease liabilities,
non-current
2,940
3,284
Total liabilities
167,536
196,521
Shareholders' equity
Common stock, $0.01 par value, unlimited
shares authorized, 212,726,102 shares issued and 208,620,154 shares
outstanding at June 30, 2023; unlimited shares authorized,
201,853,695 shares issued and outstanding at December 31, 2022
2,127
2,019
B Shares, $0.0001 par value, 22,500,000
shares authorized, 18,500,000 shares issued and outstanding at June
30, 2023 and December 31, 2022
2
2
Additional paid-in capital
1,625,076
1,568,917
Treasury stock, at cost, 4,105,948 shares
at June 30, 2023; nil shares at December 31, 2022
(17,653)
-
Accumulated deficit
(974,419)
(938,953)
Accumulated other comprehensive loss
(33,870)
(55,169)
Total shareholders' equity
601,263
576,816
Total liabilities and shareholders'
equity
$ 768,799
$ 773,337
Genius Sports Limited
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
Six Months Ended
June 30
June 30
2023
2022
Cash Flows from operating
activities:
Net loss
$ (35,466)
$ (44,953)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization
35,032
34,752
Loss on disposal of assets
22
7
Loss (gain) on fair value remeasurement of
contingent consideration
2,809
(4,408)
Stock-based compensation
14,185
60,677
Change in fair value of derivative warrant
liabilities
534
(13,420)
Non-cash interest expense, net
170
350
Non-cash lease expense
1,955
3,426
Amortization of contract cost
473
445
Deferred income taxes
47
8
Provision for doubtful accounts
250
362
Gain from equity method investment
(857)
(449)
Gain on foreign currency remeasurement
(2,228)
(33,816)
Changes in operating assets and
liabilities
Accounts receivable
(24,746)
16,276
Contract asset
3,125
(7,213)
Prepaid expenses
(3,070)
(3,975)
Other current assets
911
2,546
Other assets
488
(3,664)
Accounts payable
(10,843)
(5,929)
Accrued expenses
35
(9,657)
Deferred revenue
(1,600)
7,377
Other current liabilities
(1,887)
12,306
Operating lease liabilities
(2,049)
(3,421)
Other liabilities
-
(9,813)
Net cash used in operating
activities
(22,710)
(2,186)
Cash flows from investing
activities:
Purchases of property and equipment
(1,002)
(2,232)
Capitalization of internally developed
software costs
(21,232)
(21,741)
Distributions from (contribution to)
equity method investments
1,555
(7,871)
Equity investments without readily
determinable fair values
-
(150)
Purchases of intangible assets
(238)
-
Acquisition of business, net of cash
acquired
-
(20)
Proceeds from disposal of assets
30
121
Net cash used in investing
activities
(20,887)
(31,893)
Cash flows from financing
activities:
Repayment of loans and mortgage
(10)
-
Proceeds from exercise of Public
Warrants
6,812
-
Repayment of promissory notes
(7,387)
-
Net cash used in financing
activities
(585)
-
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
322
(13,318)
Net decrease in cash, cash equivalents
and restricted cash
(43,860)
(47,397)
Cash, cash equivalents and restricted cash
at beginning of period
159,020
222,378
Cash, cash equivalents and restricted cash
at end of period
$ 115,160
$ 174,981
Supplemental disclosure of cash
activities:
Cash paid during the period for
interest
$ (329)
$ (416)
Cash paid during the period for income
taxes
$ (2,781)
$ (1,204)
Supplemental disclosure of noncash
investing and financing activities:
Shares acquired by subsidiary from
cashless Public Warrant exercise
$ 17,653
$ -
Promissory notes arising from equity
method investments
$ -
$ 14,688
Issuance of common stock in connection
with business combinations
$ 10,157
$ 17,452
Genius Sports Limited
Reconciliation of U.S. GAAP
Net loss to Adjusted EBITDA
(Unaudited)
(Amounts in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(dollars, in thousands)
(dollars, in thousands)
Consolidated net loss
$ (10,298)
$ (4,755)
$ (35,466)
$ (44,953)
Adjusted for:
Net, interest expense (income)
202
375
(216)
766
Income tax expense (benefit)
3,952
(61)
4,600
515
Amortization of acquired intangibles
(1)
10,117
10,196
19,850
20,917
Other depreciation and amortization
(2)
7,854
7,277
15,655
14,280
Stock-based compensation (3)
3,624
23,597
14,329
60,777
Transaction expenses
496
-
1,324
128
Litigation and related costs (4)
608
4,328
1,392
9,245
Change in fair value of derivative warrant
liabilities
-
(4,678)
534
(13,420)
Loss (gain) on fair value remeasurement of
contingent consideration
376
-
2,809
(4,408)
Gain on foreign currency
(1,496)
(30,122)
(2,297)
(42,754)
Other (5)
215
2,205
1,178
4,376
Adjusted EBITDA
$ 15,650
$ 8,362
$ 23,692
$ 5,469
- Includes amortization of intangible assets generated through
business acquisitions, inclusive of amortization for data rights,
marketing products, and acquired technology.
- Includes depreciation of Genius’ property and equipment,
amortization of contract cost, and amortization of internally
developed software and other intangible assets. Excludes
amortization of intangible assets generated through business
acquisitions.
- Includes restricted shares, stock options, equity-settled
restricted share units, cash-settled restricted share units and
equity-settled performance-based restricted share units granted to
employees and directors (including related employer payroll taxes)
and equity-classified non-employee awards issued to suppliers.
- Includes mainly legal and related costs in connection with
non-routine litigation matters including Sportradar litigation and
BetConstruct litigation.
- Includes expenses incurred related to earn-out payments on
historical acquisitions, gain/losses on disposal of assets and
severance costs.
Webcast and Conference Call Details
Genius Sports management will host a conference call and webcast
today at 8:00AM ET to discuss the Company’s second quarter
results.
The conference call may be accessed by dialing (646)
307-1963.
A live audio webcast may be accessed on the Company’s investor
relations website at investors.geniussports.com along with Genius’
earnings press release and related materials. A replay of the
webcast will be available on the website within 24 hours after the
call.
About Genius Sports
Genius Sports is the official data, technology and broadcast
partner that powers the global ecosystem connecting sports, betting
and media. Our technology is used in over 150 countries worldwide,
creating highly immersive products that enrich fan experiences for
the entire sports industry.
We are the trusted partner to over 400 sports organizations,
including many of the world’s largest leagues and federations such
as the NFL, EPL, FIBA, NCAA, NASCAR, AFA and Liga MX.
Genius Sports is uniquely positioned through cutting-edge
technology, scale and global reach to support our partners. Our
innovative use of big data, computer vision, machine learning, and
augmented reality, connects the entire sports ecosystem from the
rights holder all the way through to the fan.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures not
presented in accordance with U.S. GAAP. A reconciliation of the
most comparable GAAP measure to its non-GAAP measure is included
above.
Adjusted EBITDA
We present Group adjusted EBITDA and Group adjusted EBITDA
margin, non-GAAP performance measures, to supplement our results
presented in accordance with U.S. GAAP. Group adjusted EBITDA is
defined as earnings before interest, income tax, depreciation and
amortization and other items that are unusual or not related to our
revenue-generating operations, including stock-based compensation
expense (including related employer payroll taxes), change in fair
value of derivative warrant liabilities and remeasurement of
contingent consideration. Group adjusted EBITDA margin is
calculated as Group adjusted EBITDA divided by Group revenue.
Group adjusted EBITDA and Group adjusted EBITDA margin are used
by management to evaluate our core operating performance on a
comparable basis and to make strategic decisions. We believe Group
adjusted EBITDA and Group adjusted EBITDA margin are useful to
investors for the same reasons as well as in evaluating our
operating performance against competitors, which commonly disclose
similar performance measures. However, our calculation of Group
adjusted EBITDA and Group adjusted EBITDA margin may not be
comparable to other similarly titled performance measures of other
companies. Group adjusted EBITDA and Group adjusted EBITDA margin
are not intended to be a substitute for any U.S. GAAP financial
measure.
We do not provide a reconciliation of Group adjusted EBITDA to
consolidated net income/(loss) on a forward-looking basis because
we are unable to forecast certain items required to develop
meaningful comparable GAAP financial measures without unreasonable
efforts. These items are difficult to predict and estimate and are
primarily dependent on future events. The impact of these items
could be significant to our projections.
Constant Currency
Certain income statement items in this press release are
discussed on a constant currency basis. Our results between periods
may not be comparable due to foreign currency translation effects.
We present certain income statement items on a constant currency
basis, as if GBP:USD exchange rate had remained constant
period-over-period, to enhance the comparability of our results. We
calculate income statement constant currency amounts by taking the
relevant average GBP:USD exchange rate used in the preparation of
our income statement for the more recent comparative period and
apply it to the actual GBP amount used in the preparation of our
income statement for the prior comparative period.
Constant currency amounts only adjust for the impact related to
the translation of our consolidated financial statements from GBP
to USD. Constant currency amounts do not adjust for any other
translation effects, such as the translation of results of
subsidiaries whose functional currency is other than GBP or
USD.
Forward-Looking Statements
This press release contains forward-looking statements as
defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
that involve significant risks and uncertainties. All statements
other than statements of historical facts are forward-looking
statements. These forward-looking statements include information
about our possible or assumed future results of operations or our
performance. Words such as “expects,” “intends,” “plans,”
“believes,” “anticipates,” “estimates,” and variations of such
words and similar expressions are intended to identify such forward
looking statements. Although we believe that the forward-looking
statements contained in this press release are based on reasonable
assumptions, you should be aware that many factors could affect our
actual financial results or results of operations and could cause
actual results to differ materially from those in such
forward-looking statements, including but not limited to: the
effect of COVID-19 on our business, risks related to our reliance
on relationships with sports organizations and the potential loss
of such relationships or failure to renew or expand existing
relationships; fraud, corruption or negligence related to sports
events, or by our employees or contracted statisticians; risks
related to changes in domestic and foreign laws and regulations or
their interpretation; compliance with applicable data protection
and privacy laws; pending litigation and investigations; the
failure to protect or enforce our proprietary and intellectual
property rights; claims for intellectual property infringement; our
reliance on information technology; risks related to our ability to
achieve the anticipated benefits from the business combination with
dMY Technology Group, Inc. II; and other factors included under the
heading “Risk Factors” in our Annual Report on Form 20-F filed with
the SEC on March 30, 2023.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. We undertake no obligation to publicly update or
revise any forward-looking statements contained herein, to reflect
any change in our expectations with respect to such statements or
any change in events, conditions or circumstances upon which any
statement is based.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230807061581/en/
Media Chris Dougan, Chief Communications Officer +1 (202)
766-4430 chris.dougan@geniussports.com Investors Brandon Bukstel,
Investor Relations Manager +1 (954)-554-7932
brandon.bukstel@geniussports.com
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