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Genius Sports Exceeds Group Revenue and Adj. EBITDA Outlook in 2022 and Reaffirms Expectations for over 150% Adj. EBITDA Growth in 2023

  • Group Revenue of $341m and Group Adj. EBITDA of $16m in the year ended December 31, 2022, exceeding guidance of $340m and $15m, respectively
  • 2022 Group Revenue growth of 41% at constant currency ($361m at guidance exchange rate1 vs. guidance of $340m)
  • 2022 Group Net loss of $182m and Group Adj. EBITDA of $16m ($19m at guidance exchange rate1, exceeding guidance by 29%)
  • U.S. revenue more than doubled year-on-year, driven by continued market liberalization, growth of in-play GGR (60% increase year-on-year), and expanded customer relationships
  • 2023 Group Revenue outlook of $391m and Group Adj. EBITDA outlook of $41m, each in-line with consensus estimates and reflective of today’s foreign exchange rates
  • The Company expects to generate positive free-cash-flow in the second half of 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 fourth quarter and full year ended December 31, 2022.

“Our 2022 results demonstrate our commitment to executing the financial and strategic plan we outlined in our Investor Day at the start of 2022, and we have successfully delivered on our forecast each quarter," said Mark Locke, Genius Sports Co-Founder and CEO. "We remain relentlessly focused on balancing investment in our highest growth initiatives, while still demonstrating the unique operating leverage of our business model. Following our consistent execution in 2022 and the maturation of our technology investments, the stage is now set for 2023 to capture the immense opportunity ahead of us, afforded by the global competitive position we have built to-date."

Nick Taylor, Genius Sports CFO, added, "Our expectation of nearly tripling our Group Adj. EBITDA and generating free-cash-flow in the second half of 2023 is the direct result of a cost base that does not need to grow in-line with revenues moving forward. With $159m of total cash on our balance sheet, zero debt financing, and our legacy warrants now removed, our shareholders are well positioned to capture the benefits of profitability and cash flow acceleration.”

$ in thousands

Q422

Q421

%

Constant currency %

Group Revenue

105,339

84,012

25.4%

36.1%

Betting Technology, Content & Services

65,543

53,929

21.5%

34.6%

Media Technology, Content & Services

25,639

17,051

50.4%

58.1%

Sports Technology & Services

14,157

13,032

8.6%

13.7%

Group Net loss

(127,716)

(53,290)

(139.7%)

(133.2%)

Group Net loss Margin

nm

nm

nm

nm

Group Adjusted EBITDA

2,661

(12,507)

121.3%

120.1%

Group Adjusted EBITDA Margin

2.5%

nm

nm

nm

$ in thousands

FY 2022

FY 2021

%

Constant currency %

Group Revenue

341,029

262,735

29.8%

40.7%

Betting Technology, Content & Services

209,251

177,201

18.1%

29.8%

Media Technology, Content & Services

82,698

48,312

71.2%

80.5%

Sports Technology & Services

49,080

37,222

31.9%

38.8%

Group Net loss

(181,636)

(592,753)

69.4%

69.2%

Group Net loss Margin

nm

nm

nm

nm

Group Adjusted EBITDA

15,788

1,550

918.6%

767.8%

Group Adjusted EBITDA Margin

4.6%

0.6%

4.0%

5.6%

nm = not meaningful

Q4 2022 Financial Highlights

  • Group Revenue: Group revenue increased 25% year-over-year to $105.3 million. On a constant currency basis, revenue increased $28.0 million, or 36% year-over-year.
    • Betting Technology, Content & Services: Revenue increased 22% (35% on a constant currency basis) year-over-year to $65.5 million, driven by new customer acquisitions, increased utilization of available content, and expansion of value-add services.
    • Media Technology, Content & Services: Revenue increased 50% (58% on a constant currency basis) year-over-year to $25.6 million, predominately organic growth driven by increasing uptake of programmatic advertising services alongside new customer wins in the quarter.
    • Sports Technology & Services: Revenue increased 9% (14% growth on a constant currency basis) year-over-year to $14.2 million, primarily driven by increased revenues derived from Second Spectrum.
  • Group Net Loss: Group net loss was $127.7 million in the quarter compared to a net loss of $53.3 million in the fourth quarter ended December 31, 2021. The increase is primarily driven by a loss on foreign currency.
  • Group Adjusted EBITDA: Group Adjusted (non-GAAP) EBITDA was $2.7 million in the quarter, or $4.5 million at the guidance exchange rate1 vs. $3.0 million guidance. This represents a $15.2 million improvement compared to the $12.5 million loss in the fourth quarter ended December 31, 2021.

1 Guidance exchange rate assumes comparable GBP:USD exchange rate of 1.35 at time of initial forecast in January 2022

Full Year 2022 Financial Highlights

  • Group Revenue: Group revenue increased 30% year-over-year to $341.0 million. On a constant currency basis, revenue increased $98.7 million, or 41% year-over-year.
    • Betting Technology, Content & Services: Revenue increased 18% (30% on a constant currency basis) year-over-year to $209.3 million, driven by renegotiations and expansion of value-add services for existing customers, new customer acquisitions, and increased utilization of available content.
    • Media Technology, Content & Services: Revenue increased 71% (81% on a constant currency basis) year-over-year to $82.7 million, driven by the acquisition of new customers in the Americas primarily for programmatic advertising services.
    • Sports Technology & Services: Revenue increased 32% (39% growth on a constant currency basis) year-over-year to $49.1 million, driven by the inclusion of revenues derived from Second Spectrum. In addition, there was also growth driven by expanded services provided to existing sports league and federation customers across all tiers of sport.
  • Group Net Loss: Group net loss was $181.6 million in the fiscal year ended December 31, 2022, compared to a net loss of $592.8 million in the fiscal year ended December 31, 2021. This represents a 69% year-over-year improvement, driven primarily by a reduction in stock-based compensation, disciplined management of operating expenses, and significant revenue growth compared to the fiscal year ended December 31, 2021.
  • Group Adjusted EBITDA: Group Adjusted (non-GAAP) EBITDA was $15.8 million in the quarter, or $19.3 million at the guidance exchange rate1 vs. $15.0 million guidance. This represents a significant increase from the $1.6 million generated in the fiscal year ended December 31, 2021. This was driven by meaningful revenue growth, overall revenue mix as well as disciplined cost control.
  • Strong Cash Position: Closing cash balance was $159 million as of December 31, 2022, above the previously guided range of $140 to $150 million. The Company expects to begin generating positive free-cash-flow in the second half of 2023. This closing cash balance includes approximately $36 million of restricted cash related to a guarantee for rights. As noted last quarter, this amount of restricted cash will reduce over time with a corresponding increase in cash and cash equivalents on the balance sheet.

1 Guidance exchange rate assumes comparable GBP:USD exchange rate of 1.35 at time of initial forecast in January 2022

Q4 2022 Business Highlights

  • Launched NFL ‘Watch & Bet’ video streams in the U.S. and Canada:
    • Expanded Partnership with the NFL to provide ‘Watch & Bet’ video streams to U.S. sportsbooks for the first time, starting with Caesars Entertainment
    • Struck ‘Watch & Bet’ partnerships for NFL video streams in Canada with three approved sportsbooks
  • Extended partnership with bet365 with exploratory launch of next generation betting products powered by Second Spectrum tracking technology
  • Developed ‘In-Play MultiBet’, a new product enabling bettors to place same-game parlays during live play or game intervals
  • Expanded official data partnership with Football DataCo to include sub-second, skeletal tracking for the English Premier League
  • Launched 3-point shot tracker for the NBA on ESPN using Second Spectrum technology
  • Second Spectrum live optical tracking system successfully validated by the FIFA Quality Programme for Electronic Performance and Tracking Systems (“EPTS”)
  • Awarded Ohio Sports Gaming Supplier License
  • Reached a settlement to successfully resolve a legal dispute with BetConstruct, shortly after resolving a separate litigation with Sportradar

After the fourth quarter reporting period

  • Expanded NBA partnership to deepen NBA League Pass innovations and develop a new next generation platform built on Second Spectrum technology
  • Supplied TSN’s new TSN+ direct-to-consumer streaming product with real-time data-driven broadcast overlays for the NFL Playoffs and Super Bowl LVII
  • Launched suite of NFL free-to-play interactive games to grow its international fan base
  • Clinched a new partnership with the Portland Trail Blazers to power immersive broadcasts through Second Spectrum optical tracking technology
  • Introduced Genius Marketing Suite, an all-in-one fan engagement engine specifically developed to transform how a range of partners identify, engage, and retain sports fans
  • Awarded initial temporary sports betting vendor license in the state of Massachusetts
  • Successfully eliminated all outstanding public warrants, providing greater certainty of Genius’ capital structure and offering greater financial flexibility moving forward

Financial Outlook

Genius expects to generate Group Revenue of approximately $391 million and Group Adjusted EBITDA of approximately $41 million in 2023, each in-line with current consensus estimates and reflecting today’s foreign exchange rates. The Company also expects to generate positive free-cash-flow in the second half of 2023. Below is a quarterly summary of our 2023 financial outlook:

$ in millions

Q1 2023

Q2 2023

Q3 2023

Q4 2023

FY 2023

Group Revenue

$92

$78

$97

$124

$391

Betting Technology, Content & Services

$61

$51

$61

$77

$250

Media Technology, Content & Services

$20

$16

$24

$32

$92

Sports Technology & Services

$11

$11

$12

$15

$49

Group Adjusted EBITDA

$3

$12

$15

$11

$41

Financial Statements & Reconciliation Tables

Genius Sports Limited

 

Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except share and per share data)

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2022

 

2021

 

2022

 

2021

Revenue

$ 105,339

 

$ 84,012

 

$ 341,029

 

$ 262,735

Cost of revenue

102,153

 

109,422

 

338,166

 

476,168

Gross profit (loss)

3,186

 

(25,410)

 

2,863

 

(213,433)

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

6,932

 

10,349

 

31,344

 

27,292

Research and development

6,664

 

6,585

 

29,894

 

26,513

General and administrative

32,865

 

30,726

 

122,829

 

293,168

Transaction expenses

1,540

 

3,240

 

1,668

 

12,886

Total operating expense

48,001

 

50,900

 

185,735

 

359,859

Loss from operations

(44,815)

 

(76,310)

 

(182,872)

 

(573,292)

Interest expense, net

(354)

 

(146)

 

(1,487)

 

(3,331)

Loss on disposal of assets

(121)

 

(45)

 

(292)

 

(46)

(Loss) gain on fair value remeasurement of contingent consideration

(4,190)

 

(19,405)

 

218

 

(19,405)

Change in fair value of derivative warrant liabilities

(1,064)

 

37,907

 

10,132

 

(11,412)

(Loss) gain on foreign currency

(77,281)

 

(6,613)

 

(8,979)

 

3,032

Total other (expense) income

(83,010)

 

11,698

 

(408)

 

(31,162)

Loss before income taxes

(127,825)

 

(64,612)

 

(183,280)

 

(604,454)

Income tax (expense) benefit

(970)

 

11,322

 

(1,714)

 

11,701

Gain from equity method investment

1,079

 

-

 

3,358

 

-

Net loss

$ (127,716)

 

$ (53,290)

 

$ (181,636)

 

$ (592,753)

Preferred share accretion

-

 

-

 

-

 

(11,327)

Net loss attributable to common stockholders

$ (127,716)

 

$ (53,290)

 

$ (181,636)

 

$ (604,080)

Loss per share attributable to common stockholders:

 

 

 

 

 

 

 

Basic and diluted

$ (0.63)

 

$ (0.28)

 

$ (0.91)

 

$ (4.00)

Weighted average common stock outstanding:

 

 

 

 

 

 

 

Basic and diluted

201,430,394

 

192,129,058

 

198,939,079

 

150,912,333

 

 

Genius Sports Limited

Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

December 31

 

December 31

 

2022

 

2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$ 122,715

 

$ 222,378

Restricted cash, current

12,102

 

-

Accounts receivable, net

33,378

 

48,819

Contract assets

38,447

 

21,753

Prepaid expenses

28,207

 

24,436

Other current assets

1,668

 

7,297

Total current assets

236,517

 

324,683

Property and equipment, net

12,881

 

14,445

Intangible assets, net

149,248

 

191,219

Operating lease right of use assets

6,459

 

-

Goodwill

309,894

 

346,418

Investments

23,682

 

-

Restricted cash, non-current

24,203

 

-

Other assets

10,453

 

10,319

Total assets

$ 773,337

 

$ 887,084

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$ 33,121

 

$ 19,881

Accrued expenses

56,956

 

55,889

Deferred revenue

41,273

 

29,871

Current debt

7,405

 

23

Derivative warrant liabilities

6,922

 

16,794

Operating lease liabilities, current

3,462

 

-

Other current liabilities

22,001

 

30,354

Total current liabilities

171,140

 

152,812

Long-term debt – less current portion

7,088

 

65

Deferred tax liability

15,009

 

16,902

Operating lease liabilities, non-current

3,284

 

-

Other liabilities

-

 

11,127

Total liabilities

196,521

 

180,906

Commitments and contingencies

 

 

 

Shareholders' equity

 

 

 

Common stock, $0.01 par value, unlimited shares authorized, 201,853,695 shares issued and outstanding at December 31, 2022;

unlimited shares authorized, 193,585,625 shares issued and outstanding at December 31, 2021

2,019

 

1,936

B Shares, $0.0001 par value, 22,500,000 shares authorized, 18,500,000 shares issued and outstanding at December 31, 2022 and 2021

2

 

2

Additional paid-in capital

1,568,917

 

1,461,730

Accumulated deficit

(938,953)

 

(757,317)

Accumulated other comprehensive loss

(55,169)

 

(173)

Total shareholders' equity

576,816

 

706,178

Total liabilities and shareholders' equity

$ 773,337

 

$ 887,084

 

 

Genius Sports Limited

 

Reconciliation of U.S. GAAP Net loss to Adjusted EBITDA

(Unaudited)

(Amounts in thousands)

 

Three Months Ended

December 31,

Year Ended

December 31,

 

2022

2021

2022

2021

Consolidated net loss

$ (127,716)

$ (53,290)

$ (181,636)

$ (592,753)

Adjusted for:

 

 

 

 

Interest expense, net

354

146

1,487

3,331

Income tax expense (benefit)

970

(11,322)

1,714

(11,701)

Amortization of acquired intangibles (1)

9,568

11,351

40,089

37,617

Other depreciation and amortization (2)

7,749

6,281

29,302

22,542

Stock-based compensation (3)

11,196

37,531

89,943

489,474

Transaction expenses

1,540

3,240

1,668

12,886

Litigation and related costs (4)

13,024

867

24,624

4,395

Change in fair value of derivative warrant liabilities

1,064

(37,907)

(10,132)

11,412

Loss (gain) on fair value remeasurement of contingent consideration

4,190

19,405

(218)

19,405

Loss (gain) on foreign currency

77,281

6,613

8,979

(3,032)

Other (5)

3,441

4,578

9,968

7,974

Adjusted EBITDA

$ 2,661

$ (12,507)

$ 15,788

$ 1,550

 
  1. Includes amortization of intangible assets generated through business acquisitions, inclusive of amortization for data rights, marketing products, and acquired technology.
  2. 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.
  3. 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.
  4. Includes mainly legal and related costs in connection with non-routine litigation matters including Sportradar litigation and BetConstruct litigation.
  5. Includes expenses incurred related to earn-out payments on historical acquisitions, gain/losses on disposal of assets, severance costs, loss on termination and impairment of property leases, and employee share scheme set up 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 fourth quarter and full year 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/A filed with the SEC on November 10, 2022.

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.

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