- Group Revenue of $102m, exceeding third quarter guidance of
$100m and representing 29% year-on-year growth
- Group Net Loss of ($12m) and Group Adj. EBITDA of $18m,
exceeding third quarter guidance of $17m and representing 131%
year-on-year growth
- Third quarter Group Adj. EBITDA margins improved by 770 basis
points year-on-year
- Raising 2023 Group Revenue and Adj. EBITDA guidance for the
third consecutive quarter to $412m and $53m, respectively
- Reaffirming expectation for 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 third quarter
ended September 30, 2023.
“Our consistent outperformance reflects the execution of our
core strategy as we continue to develop and distribute innovative
technology across the sports ecosystem, enabling success for our
partners, and further solidifying our long-term strategic
position,” said Mark Locke, Genius Sports Co-Founder and CEO. Nick
Taylor, Genius Sports CFO, added, “We have reached a critical
turning point in our business as we have realized consistent margin
expansion in each quarter this year and now have much higher
visibility into our long-term model following the renewals and
extensions of key rights partnerships.”
$ in thousands
Q323
Q322
%
Group Revenue
101,729
78,650
29.3%
Betting Technology, Content &
Services
65,927
49,156
34.1%
Media Technology, Content &
Services
22,938
17,931
27.9%
Sports Technology & Services
12,864
11,563
11.3%
Group Net loss
(11,616)
(8,967)
(29.5%)
Group Adjusted EBITDA
17,695
7,658
131.1%
Group Adjusted EBITDA Margin
17.4%
9.7%
7.7%
$ in thousands
YTD23
YTD22
%
Group Revenue
285,805
235,690
21.3%
Betting Technology, Content &
Services
187,529
143,708
30.5%
Media Technology, Content &
Services
63,059
57,059
10.5%
Sports Technology & Services
35,217
34,923
0.8%
Group Net loss
(47,082)
(53,920)
12.7%
Group Adjusted EBITDA
41,387
13,127
215.3%
Group Adjusted EBITDA Margin
14.5%
5.6%
8.9%
Q3 2023 Financial Highlights
- Group Revenue: Group revenue increased 29%
year-over-year to $101.7 million.
- Betting Technology, Content & Services: Revenue increased
34% year-over-year to $65.9 million, driven by new customer
acquisitions, increased customer utilization of available content,
and growth in business with existing customers due to price
increases on contract renewals and renegotiations alongside the
expansion of value-add services, and new service offerings.
- Media Technology, Content & Services: Revenue increased by
28% year-over-year to $22.9 million, driven by growth in the
Americas region, primarily for programmatic advertising
services.
- Sports Technology & Services: Revenue increased 11%
year-over-year to $12.9 million.
- Group Net Loss: Loss from operations narrowed from
($33.4 million) in the third quarter ended September 30, 2022, to
($8.9 million) in the third quarter of this year, driven by
improved underlying performance. This improvement was offset by a
$29.8 million reduction in gain on foreign currency compared to the
prior year, resulting in Group net loss of ($11.6 million) in the
third quarter ended September 30, 2023.
- Group Adjusted EBITDA: Group Adjusted (non-GAAP) EBITDA
was $17.7 million in the quarter vs. $17.0 million guidance. This
represents a 131% increase compared to the $7.7 million reported in
the third quarter ended September 30, 2022.
Q3 2023 Business Highlights
- After the reporting period:
- Expanded partnership with the NFL to power NFL+ with
data-driven on-screen graphic overlays and visualizations
- Signed new partnership with Premier League Productions to
deliver an enhanced live broadcast with rich tracking data insights
and data-driven augmentations
- Launched BetVision, an immersive sports betting experience
including NFL live game video
- Announced new partnership with Snap to power immersive AR
experiences with NFL data on Verizon’s 5G network
- Developed the first official Rugby World Cup Fantasy game in
partnership with World Rugby
- Awarded a provisional gaming license by the Nebraska Racing and
Gaming Commission.
- Extended official data & integrity partnership with
Brazil’s National Basketball League
- Partnered with Ryder Cup to launch the Ryder Cup Game Zone, an
interactive gamification hub for fans
- Appointed former MediaMath CTO, Manny Puentes as GM,
Advertising
Financial Outlook
Genius expects to generate Group Revenue of approximately $412
million and Group Adjusted EBITDA of approximately $53 million in
2023. The Company is also reaffirming its expectation to generate
positive free-cash-flow in the second half of 2023.
$ in millions
Q1 2023A
Q2 2023A
Q3 2023A
Q4 2023E
FY 2023E
Group Revenue
97
87
102
126
412
Betting Technology, Content &
Services
65
57
66
80
268
Media Technology, Content &
Services
22
18
23
31
94
Sports Technology & Services
11
12
13
15
50
Group Adjusted EBITDA
8
16
18
11
53
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
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Revenue
$ 101,729
$ 78,650
$ 285,805
$ 235,690
Cost of revenue
77,446
72,821
227,316
236,013
Gross profit (loss)
24,283
5,829
58,489
(323)
Operating expenses:
Sales and marketing
5,827
6,207
19,807
24,412
Research and development
6,115
8,105
18,196
23,230
General and administrative
20,399
24,878
58,091
89,964
Transaction expenses
832
-
2,156
128
Total operating expense
33,173
39,190
98,250
137,734
Loss from operations
(8,890)
(33,361)
(39,761)
(138,057)
Interest income (expense), net
1,157
(367)
1,373
(1,133)
Loss on disposal of assets
(10)
(164)
(32)
(171)
(Loss) gain on fair value remeasurement of
contingent consideration
-
-
(2,809)
4,408
Change in fair value of derivative warrant
liabilities
-
(2,224)
(534)
11,196
(Loss) gain on foreign currency
(4,210)
25,548
(1,913)
68,302
Total other (expense) income
(3,063)
22,793
(3,915)
82,602
Loss before income taxes
(11,953)
(10,568)
(43,676)
(55,455)
Income tax expense
(1,163)
(229)
(5,763)
(744)
Gain from equity method investment
1,500
1,830
2,357
2,279
Net loss
$ (11,616)
$ (8,967)
$ (47,082)
$ (53,920)
Loss per share attributable to common
stockholders:
Basic and diluted
$ (0.06)
$ (0.04)
$ (0.23)
$ (0.27)
Weighted average common stock
outstanding:
Basic and diluted
208,757,564
200,142,706
207,832,739
198,099,515
Genius Sports Limited
Condensed Consolidated Balance
Sheets
(Amounts in thousands, except
share and per share data)
(Unaudited)
September 30
December 31
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$ 91,992
$ 122,715
Restricted cash, current
-
12,102
Accounts receivable, net
61,663
33,378
Contract assets
43,220
38,447
Prepaid expenses
50,055
28,207
Other current assets
1,131
1,668
Total current assets
248,061
236,517
Property and equipment, net
11,437
12,881
Intangible assets, net
134,760
149,248
Operating lease right of use assets
8,077
6,459
Goodwill
312,396
309,894
Investments
24,677
23,682
Restricted cash, non-current
24,399
24,203
Other assets
8,392
10,453
Total assets
$ 772,199
$ 773,337
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$ 43,703
$ 33,121
Accrued expenses
66,005
56,956
Deferred revenue
41,344
41,273
Current debt
7,301
7,405
Derivative warrant liabilities
-
6,922
Operating lease liabilities, current
3,400
3,462
Other current liabilities
12,980
22,001
Total current liabilities
174,733
171,140
Long-term debt – less current portion
23
7,088
Deferred tax liability
15,826
15,009
Operating lease liabilities,
non-current
4,177
3,284
Total liabilities
194,759
196,521
Commitments and contingencies (Note
16)
Shareholders' equity
Common stock, $0.01 par value, unlimited
shares authorized, 213,027,402 shares issued and 208,921,454 shares
outstanding at September 30, 2023; unlimited shares authorized,
201,853,695 shares issued and outstanding at December 31, 2022
2,130
2,019
B Shares, $0.0001 par value, 22,500,000
shares authorized, 18,500,000 shares issued and outstanding at
September 30, 2023 and December 31, 2022
2
2
Additional paid-in capital
1,630,132
1,568,917
Treasury stock, at cost, 4,105,948 shares
at September 30, 2023; nil shares at December 31, 2022
(17,653)
-
Accumulated deficit
(986,035)
(938,953)
Accumulated other comprehensive loss
(51,136)
(55,169)
Total shareholders' equity
577,440
576,816
Total liabilities and shareholders'
equity
$ 772,199
$ 773,337
Genius Sports Limited
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
Nine Months Ended
September 30
September 30
2023
2022
Cash Flows from operating
activities:
Net loss
$ (47,082)
$ (53,920)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization
53,025
51,422
Loss on disposal of assets
32
171
Loss (gain) on fair value remeasurement of
contingent consideration
2,809
(4,408)
Stock-based compensation
19,248
78,647
Change in fair value of derivative warrant
liabilities
534
(11,196)
Non-cash interest expense, net
187
526
Non-cash lease expense
2,941
4,896
Loss on lease abandonment
-
281
Amortization of contract cost
743
652
Deferred income taxes
710
(60)
Provision for doubtful accounts
1,441
696
Gain from equity method investment
(2,357)
(2,279)
Loss (gain) on foreign currency
remeasurement
1,224
(55,638)
Changes in operating assets and
liabilities
Accounts receivable
(32,285)
5,360
Contract asset
(4,555)
(15,434)
Prepaid expenses
(22,056)
(22,074)
Other current assets
562
2,824
Other assets
1,547
(4,669)
Accounts payable
10,529
13,350
Accrued expenses
8,767
(7,912)
Deferred revenue
(268)
17,938
Other current liabilities
(1,865)
10,979
Operating lease liabilities
(2,982)
(5,177)
Other liabilities
-
(10,109)
Net cash used in operating
activities
(9,151)
(5,134)
Cash flows from investing
activities:
Purchases of property and equipment
(2,480)
(3,913)
Capitalization of internally developed
software costs
(33,004)
(31,304)
Distributions from (contribution to)
equity method investments
1,555
(7,871)
Equity investments without readily
determinable fair values
-
(150)
Purchases of intangible assets
(240)
-
Acquisition of business, net of cash
acquired
-
(20)
Proceeds from disposal of assets
53
131
Net cash used in investing
activities
(34,116)
(43,127)
Cash flows from financing
activities:
Repayment of loans and mortgage
(16)
-
Proceeds from exercise of Public
Warrants
6,812
-
Repayment of promissory notes
(7,387)
-
Net cash used in financing
activities
(591)
-
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
1,229
(23,722)
Net decrease in cash, cash equivalents
and restricted cash
(42,629)
(71,983)
Cash, cash equivalents and restricted cash
at beginning of period
159,020
222,378
Cash, cash equivalents and restricted cash
at end of period
$ 116,391
$ 150,395
Supplemental disclosure of cash
activities:
Cash paid during the period for
interest
$ 3
$ 607
Cash paid during the period for income
taxes
$ 4,132
$ 1,626
Supplemental disclosure of noncash
investing and financing activities:
Acquisition of common shares by subsidiary
in connection with warrant redemptions
$ 17,653
$ -
Promissory notes arising from equity
method investments
$ -
$ 14,688
Issuance of common stock in connection
with business combinations
$ 10,157
$ 17,452
Genius Sports Limited
Reconciliation of U.S. GAAP
Net loss to Adjusted EBITDA
(Unaudited)
(Amounts in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
(dollars, in thousands)
(dollars, in thousands)
Consolidated net loss
$ (11,616)
$ (8,967)
$ (47,082)
$ (53,920)
Adjusted for:
Net, interest (income) expense
(1,157)
367
(1,373)
1,133
Income tax expense
1,163
229
5,763
744
Amortization of acquired intangibles
(1)
10,321
9,604
30,171
30,521
Other depreciation and amortization
(2)
7,942
7,273
23,597
21,553
Stock-based compensation (3)
5,063
17,970
19,392
78,747
Transaction expenses
832
-
2,156
128
Litigation and related costs (4)
21
2,355
1,413
11,600
Change in fair value of derivative warrant
liabilities
-
2,224
534
(11,196)
Loss (gain) on fair value remeasurement of
contingent consideration
-
-
2,809
(4,408)
Loss (gain) on foreign currency
4,210
(25,548)
1,913
(68,302)
Other (5)
916
2,151
2,094
6,527
Adjusted EBITDA
$ 17,695
$ 7,658
$ 41,387
$ 13,127
(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 and severance 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 third quarter
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 filed with
the SEC on March 30, 2023.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231113555512/en/
Media Chris Dougan, Chief Communications Officer +1 (202)
766-4430 chris.dougan@geniussports.com
Investors Brandon Bukstel, Investor Relations Manager +1
(954)-554-7932 brandon.bukstel@geniussports.com
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