Sportradar: Strong revenue growth in Q1 2022 offset by expenses

Sportradar Group, the Swiss sports data, technology and content company, has released its first quarter 2022 financial results showing declining profits despite strong revenue growth.

Revenue across segments

For the three months ended March 31, 2022, Sportradar recorded revenue of €167.9 million ($176.3 million), up 31% from €128.5 million ($134.9 million). The leading provider of business-to-business solutions for the global sports betting industry recognized in the first quarter of 2021. Sportradar said all segments of the business generated growth in the quarter.

U.S. operations jumped 124% to €25.7 million ($27 million), driven by higher betting service sales, mainly due to the growing number of states legalizing betting sportsmen. The business also saw an increase in sales to media companies and a positive impact from the acquisition of Synergy Sports.

Sportradar generated €86.7 million ($91 million) in revenue and €45.9 million ($48.2 million) from Rest of the World (RoW) operations in betting and audiovisual, respectively, representing year-over-year increases of 25% and 17%. .

RoW Betting’s growth was driven by a 51% increase in managed betting service sales to €26.4 million ($27.7 million) and a 16% increase in live/odds data at €46.8 million ($49.1 million), while RoW Audiovisual’s growth was attributed to increased Tennis Australia and NHL content and content from upsell of the acquisition of Synergy Sports.

Costs and expenses

On the expense side, Sportradar’s first quarter ended with significant cost and expense increases across the board, ranging from 32% to 35%, which impacted Adjusted EBITDA and led to a decrease of 5% to 26.7 million euros, compared to 28.2 million euros in the respective quarter of the previous year.

Personnel expenses increased by 35% to €52.3 million ($54.9 million), mainly due to additional hiring within the company. At the end of the first quarter of 2022, there were 620 more people than in the first quarter of 2021 for a total of 3,075 full-time employees.

Other operating expenses increased nearly 35% to €19.5 million ($20.5 million) due to “increasing costs associated with being a public company and the ‘cancellation of temporary cost savings related to COVID-19’ compared to the previous year, Sportradar explained. .

Total sports rights cost increased to €54 million ($56.7 million) in the reported quarter to post a 32% increase from €40.9 million ($42.9 million). dollars) reported in the first quarter of 2021. Sportradar justified this increase with the new rights for ICC, UEFA and ATP and the “standardized schedule of the NBA, NHL and MLB due to the easing of restrictions.

Adjusted EBITDA margin, the profit to revenue ratio, fell from 22% in the first quarter of 2021 to 16% in the current quarter.

Cash and cash equivalents at the end of the first quarter of 2022 were €715.5 million ($751.3 million), increasing to €825.5 million ($866.8 million ) adding undrawn credit facilities. Sportradar reiterated its revenue and adjusted EBITDA guidance for 2022, with revenue expected to be between €665 million ($698.2 million) and €700 million ($735 million). million), representing growth of between 18% and 25%, while adjusted EBITDA is expected to be between 123 million euros (129.2 million dollars) and 133 million euros (139.6 million), representing growth of 21% to 30%.