Genius Sports exceeded its revenue and adjusted EBITDA forecasts for the 2022 financial year. This was due in part to its ongoing growth within its content and betting technology divisions.
Although the data, technology, and broadcast business saw significant year-on-year growth in all of its operating segments, it was the betting unit that remained its primary source for revenue in 2022.
Mark Locke, co-founder of Genius and chief executive officer, said that the group’s growth was partially due to maturation in its technology investments. He also stated that this will drive growth across all divisions in 2023.
Locke stated that “Our 2022 results show our commitment to executing our financial and strategic plan, which we laid out in our Investor Day at 2022’s start,” and that we have delivered each quarter on our forecast.”
“We are focused on investing in the highest growth initiatives while still maintaining our unique operating leverage.
“Following our consistent execution and maturation of technology investments in 2022, the stage now is set for 2023 to seize the enormous opportunity afforded us by our global competitive position to-date.
Q4 growth
First, let’s look at the performance of the group in the fourth quarter. Revenue for the three months ended 31 December 2022 was $105.3m/PS87.4m/EUR98.9m, up 25.4% on the $84.0m Q4 2021 financial year.
The revenue from the betting technology and content and services division increased 25.4% year on year to $65.5 million. This was due to new customer acquisitions and increased content utilisation. It also reflects the expansion of value-add and other services.
Media technology, content, and services saw a 50.4% increase to $25.6m. This was primarily due to organic growth. It was driven by a growing uptake in programmatic advertising services as well as new customer wins.
Additionally, revenue from sports technology and services increased 8.6% to $14.2m. This was due to additional revenue from Second Spectrum.
When it comes to expenses, the cost of revenue decreased 6.6% to $102.2m while operational spend dropped 5.7% to $48.0m. This resulted in an operating loss of $44.8m. This is a decrease from the $76.3m loss recorded at the same time in 2021.
Other expenses were $83.0m. This was mainly due to a $77.3m foreign currency loss, which resulted in a pretax loss of $127.8m. This is almost twice the $64.6m loss at Q4 last year.
Genius paid $970,000 income tax in the quarter. Genius also noted a $1.1m equity method investment gain, which left a net loss $127.7m compared to $53.3m 2021. The adjusted EBITDA increased from $12.5m loss to $2.7m.
Full year
Group revenue increased 29.8% to $341.0m from $262.7m 2021 to $341.0m for the entire year.
The 18.1% increase in betting technology, content, and services revenue to $209.3m was due to renegotiations, expansion of value-add service for existing customers, new customer acquisitions, and increased content utilisation.
The acquisition of new customers from the Americas mainly for programmatic advertising, drove the increase in revenue from media technology, content, and services to $82.7 million.
The inclusion of Second Spectrum revenue and expanded services to existing customers of federations and leagues across all levels of sport drove 31.9% of the increase in sports technology and services revenue to $49.1m.
The cost of revenue fell by 30.0% to $338.2m, and operating expenses dropped 48.4% at $185.7m. Operating loss was $182.9m which is a significant improvement on $573.3m in 2021.
Other expenses were reduced from $31.2m down to $408,000. This resulted in a pre-tax loss $183.3m compared to $604.5m the previous year.
Genius paid $1.7m income tax and recorded a $3.4m equity method investment gain, which meant it had a net loss $181.6m for the fiscal year. This is in contrast to its loss of $604.1m in 2021. Additionally, adjusted EBITDA jumped 918.6% to $15.8m.
