Genius Sports Limited (NYSE:GENI, Financial) (“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 | ||||
