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Betting growth helps Genius exceed revenue and earnings targets in 2022

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Genius Sports surpassed its revenue and adjusted EBITDA expectations for its 2022 financial year, helped in part by ongoing growth within its betting technology, content and services division.

The data, technology and broadcast business posted significant year-on-year growth across all its operating segments, though it was the betting arm that remained its primary source of revenue in 2022.

Genius co-founder and chief executive Mark Locke said group-wide growth was partly down to the maturation of its technology investments, adding that this will help drive further growth across all divisions in 2023.

“Our 2022 results demonstrate our commitment to executing the financial and strategic plan we outlined in our Investor Day at the start of 2022, and we have successfully delivered on our forecast each quarter,” Locke said.

“We remain relentlessly focused on balancing investment in our highest growth initiatives, while still demonstrating the unique operating leverage of our business model. 

“Following our consistent execution in 2022 and the maturation of our technology investments, the stage is now set for 2023 to capture the immense opportunity ahead of us, afforded by the global competitive position we have built to-date.”

Q4 growth

First looking at the group’s performance in the fourth quarter, revenue for the three months to 31 December 2022 was $105.3m (£87.4m/€98,.9m), up 25.4% from $84.0m in Q4 of the 2021 financial year.

Revenue from the betting technology, content and services division jumped 25.4% year-on-year to $65.5m, driven by new customer acquisitions, increased utilisation of available content and the expansion of value-add services.

Media technology, content and services also increased 50.4% to $25.6m predominately due to organic growth that was driven by an increasing uptake of programmatic advertising services alongside new customer wins.

In addition, sports technology and services revenue edged up 8.6% to $14.2m, helped by additional revenue from the Second Spectrum business.

Turning to expenses, cost of revenue was reduced by 6.6% to $102.2m and operational spend fell 5.7% to $48.0m. This left an operating loss of $44.8m, an improvement on the $76.3m loss posted at the same point in 2021.

However, other expenses amounted to $83.0m, primarily due to a $77.3m loss on foreign currency, resulting in a pre-tax loss of $127.8m, almost double the $64.6m loss at the end of Q4 in the previous year.

Genius paid $970,000 in income tax during the quarter and noted a $1.1m gain from equity method investment, leaving a net loss of $127.7m, compared to $53.3m in 2021. However, adjusted EBITDA improved from a loss of $12.5m to a positive of $2.7m.

Full year

As for the full year, group revenue climbed 29.8% from $262.7m in 2021 to $341.0m.

Betting technology, content and services revenue was 18.1% higher at $209.3m, driven by renegotiations and expansion of value-add services for existing customers, in addition to new customer acquisitions and the increased utilisation of available content.

Revenue from media technology, content and services jumped 71.2% to $82.7m, again due to the acquisition of new customers in the Americas, primarily for programmatic advertising services.

Sports technology and services revenue increased 31.9% to $49.1m, driven by the inclusion of revenue from Second Spectrum, as well as expanded services provided to existing sports league and federation customers across all tiers of sport.

In terms of spending, cost of revenue was 30.0% lower at $338.2m and operating expenses were also reduced by 48.4% to $185.7m. As a result, operating loss amounted to $182.9m, a significant improvement from $573.3m in 2021.

Other expenses were cut from $31.2m to just $408,000, leaving a pre-tax loss of $183.3m, compared to $604.5m in the previous year.

Genius paid $1.7m in income tax and noted a $3.4m gain from equity method investment, meaning it posted a net loss of $181.6m for the year, in contrast to the $604.1m loss in 2021. In addition, adjusted EBITDA rocketed by 918.6% to $15.8m.

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