Sportradar’s revenues surged in the first quarter of 2022 amid continued growth in its U.S. segment, driven by an increase in the company’s sales of its North American betting services.
During the three-month period ended March 31, Sportradar generated U.S. segment revenue of $28.5 million, an increase of 124% from the same quarter in 2021. Over the quarter, Sportradar also experienced growth from a spike in U.S. media sales as well a strong impact from its 2021 acquisition of basketball analytics firm Synergy Sports.
In total, Sportradar generated revenue of $186.4 million for the quarter, an increase of 31% from the year-ago period. The Swiss-headquartered sports betting data provider topped analysts’ revenue estimates by approximately $19.7 million.
$SRAD Sportradar’s Sales of Sports Betting Data Are Soaring: https://t.co/VEPXYbVJee
— Ryan C Fuhrmann, CFA (@RationalAnalyst) May 18, 2022
As big data continues to transform the ways that major corporations conduct business, Sportradar will continue to leverage their data capabilities to accelerate growth, CEO Carsten Koerl indicated. Sportradar maintains partnerships with nearly all of the top sportsbooks in the industry, including BetMGM, Caesars Sportsbook, DraftKings, and FanDuel.
“It’s crystal clear that one who has the most data delivered by powerful networks in sports, media, and betting has the most potential to generate alpha,” Koerl said on an earnings conference call. “Everything we are doing at Sportradar is aimed at maximizing this.”
Sportradar also reported adjusted EBITDA of $29.6 million, a decrease of 5% from the previous year’s quarter. The company attributed the decline to higher costs it incurred as a public company, as well as certain cost reversals related to the COVID-19 pandemic.
In-game betting trends
Over the last year, Sportradar has continually discussed the upward trajectory of in-game betting in the U.S. market. While the live betting represents upward of 70% of the total handle in Europe, about 20-30% of all wagers in the newer U.S. market are estimated to come from such wagers. For instance, Genius Sports, Sportradar’s main rival, noted in January that in-play wagering represented approximately 25% of the overall handle during the 2021 NFL regular season.
“It’s so much more exciting and intense to bet on your favorite team or player while the match is in progress,” Koerl said.
During the quarter, Sportradar increased revenue 16% in its live odds/live data category, a trend the company attributes to higher sales of additional content to existing clients. While Koerl believes that in-game betting will eventually become the primary form of wagering in the U.S., questions exist on how quickly such a transformation will occur. Koerl would like to add more audiovisual streaming options in the U.S. market, which could accelerate the shift.
Soccer is a sport he said ranks among the most exciting for viewers from a live-betting perspective. Wagering on the sport continues to pick up in the U.S., Koerl added.
Update on the Ukraine conflict
As Fortune 500 companies continue to wind down operations in Russia, a bevy of sports betting data operators have garnered controversy for servicing the region despite the conflict in Ukraine. In March, Sports Handle published a comprehensive feature that detailed Koerl’s 23% stake in Russian sportsbook Liga Stavok, a stake Sportradar claims that Koerl cannot unload due to sanctions in the region.
While Koerl later disclosed that Sportradar would halt all new investments in the nation, the company stopped short of pulling out of Russia entirely. There are now indications that the top four data providers in the global sports betting market have continued to service the Russian market.
Though @Sportradar vowed not to sign new Russian sportsbook clients, the company didn't indicate if it will sever ties with current clients. @MattRybaltowski reviews after $SRAD earnings call on Wednesday. https://t.co/48ePSblOxj
— Sports Handle (@sports_handle) March 30, 2022
When addressing the conflict in March, Koerl noted that the company could report 2022 adjusted EBITDA of €110 million on the year under a worst-case scenario stemming from the events in Ukraine. The forecast projected a negative impact of about €13 million from the conflict. Since then, some books in the region have halted orders of managed trading services, according to Koerl, while a few have experienced payment issues.
Although Sportradar has seen a larger impact from the conflict in the second quarter, the company projects that the adverse effects of the Ukraine crisis will wane over the final six months of 2022, as it aggressively pursues mitigation strategies. Sportradar reiterated its full-year EBITDA outlook of €123.0 million to €133.0 million.
“We view this as a positive proof point for the durability and diversified nature of the business,” Craig Hallum analyst Ryan Sigdahl wrote in a research note.
6 Analysts Have This to Say About Sportradar Gr https://t.co/MWXdGOkW4b $SRAD
— Billionaireclubcollc.com (@LlcBillionaire) May 19, 2022
Sportradar traded on Friday around $9.50 a share, down fractionally on the session. While Sigdahl maintained a buy rating on the company, he lowered his price target to $25, on lower industry multiples and higher discount rates.
Sportradar is down more than 60% from its 52-week high of $28.22 a share.
