- Group Revenue of $97.2m, exceeding first quarter guidance of
$92.0m
- Group Net Loss of ($25.2m) and Group Adj. EBITDA of $8.0m,
exceeding first quarter guidance of $3.0m
- 2023 Group Revenue and Adj. EBITDA outlook increased to $400m
and $49m, respectively, up from prior outlook of $391m and
$41m
- Genius expects to expand Group Adj. EBITDA Margins from 5% in
2022 to 12% in 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 first quarter
ended March 31, 2023.
“Following a strong year of execution in 2022, we are pleased to
continue our momentum to start the new year, with the first quarter
of 2023 marking another period of outperformance relative to our
guidance,” said Mark Locke, Genius Sports Co-Founder and CEO. "2023
is the year in which Genius expects to significantly accelerate
Group Adj. EBITDA profitability and rapidly expand margins. Our
first quarter results demonstrate the operating leverage of our
business model, built to benefit from positive industry trends and
support sustainable, profitable growth. As a result, I have a
greater sense of confidence in our ability to achieve full-year
financial targets beyond our initial expectations, leading us to
raise our 2023 outlook."
$ in thousands
Q123
Q122
%
Constant currency %
Group Revenue
97,229
85,923
13.2%
19.1%
Betting Technology, Content &
Services
64,740
49,721
30.2%
38.6%
Media Technology, Content &
Services
21,764
24,129
(9.8%)
(6.7%)
Sports Technology & Services
10,725
12,073
(11.2%)
(7.3%)
Group Net loss
(25,168)
(40,198)
37.4%
37.3%
Group Adjusted EBITDA
8,042
(2,893)
378.0%
292.9%
Group Adjusted EBITDA Margin
8.3%
nm
nm
nm
nm = not meaningful
Q1 2023 Financial Highlights
- Group Revenue: Group revenue increased 13%
year-over-year to $97.2 million. On a constant currency basis,
revenue increased $15.6 million, or 19% year-over-year.
- Betting Technology, Content & Services: Revenue increased
30% (39% on a constant currency basis) year-over-year to $64.7
million, driven by new customer acquisitions and growth among
existing customers as a result of price increases on contract
renewals and renegotiations.
- Media Technology, Content & Services: Revenue decreased
(10%) (7% decrease on a constant currency basis) year-over-year to
$21.8 million, due to lower advertising spend relative to the first
quarter of 2022.
- Sports Technology & Services: Revenue decreased (11%) (7%
decrease on a constant currency basis) year-over-year to $10.7
million, due to lower revenues from non-cash consideration
contracts.
- Group Net Loss: Group net loss was $25.2 million in the
quarter compared to a net loss of $40.2 million in the first
quarter ended March 31, 2022.
- Group Adjusted EBITDA: Group Adjusted (non-GAAP) EBITDA
was $8.0 million in the quarter vs. $3.0 million guidance. This
represents a $10.9 million improvement compared to the $2.9 million
loss in the first quarter ended March 31, 2022.
Q1 2023 Business Highlights
- Expanded NBA partnership to deepen NBA League Pass innovations
and develop a new next generation platform built on Second Spectrum
technology
- Supplied TSN’s new TSN+ direct-to-consumer streaming product
with real-time data-driven broadcast overlays for the NFL Playoffs
and Super Bowl LVII
- Launched suite of NFL free-to-play interactive games to grow
its international fan base
- Clinched a new partnership with the Portland Trail Blazers to
power immersive broadcasts through Second Spectrum optical tracking
technology
- Introduced Genius Marketing Suite, an all-in-one fan engagement
engine specifically developed to transform how a range of partners
identify, engage, and retain sports fans
- Launched augmented broadcasts of English Premier League matches
with NBC, Optus, and Premier League Productions
- Launched a Brazilian Integrity Association to protect the
future of sports amidst regulation of online sports betting
Financial Outlook
Genius expects to generate Group Revenue of approximately $400
million and Group Adjusted EBITDA of approximately $49 million in
2023. The Company is also maintaining its expectation to generate
positive free-cash-flow in the second half of 2023.
$ in millions
Q1 2023A
Q2 2023E
Q3 2023E
Q4 2023E
FY 2023E
Group Revenue
$97
$80
$99
$124
$400
Betting Technology, Content &
Services
$65
$53
$61
$77
$256
Media Technology, Content &
Services
$22
$16
$26
$32
$96
Sports Technology & Services
$11
$11
$12
$15
$49
Group Adjusted EBITDA
$8
$14
$16
$11
$49
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
March 31,
2023
2022
Revenue
$
97,229
$
85,923
Cost of revenue
87,697
101,375
Gross profit (loss)
9,532
(15,452
)
Operating expenses:
Sales and marketing
7,391
9,232
Research and development
6,269
7,391
General and administrative
18,074
32,804
Transaction expenses
828
128
Total operating expense
32,562
49,555
Loss from operations
(23,030
)
(65,007
)
Interest income (expense), net
418
(391
)
Loss on disposal of assets
(11
)
(6
)
(Loss) gain on fair value remeasurement of
contingent consideration
(2,433
)
4,408
Change in fair value of derivative warrant
liabilities
(534
)
8,742
Gain on foreign currency
801
12,632
Total other (expense) income
(1,759
)
25,385
Loss before income taxes
(24,789
)
(39,622
)
Income tax expense
(648
)
(576
)
Gain from equity method investment
269
-
Net loss
$
(25,168
)
$
(40,198
)
Loss per share attributable to common
stockholders:
Basic and diluted
$
(0.12
)
$
(0.21
)
Weighted average common stock
outstanding:
Basic and diluted
206,207,413
195,760,284
Genius Sports Limited
Condensed Consolidated Balance
Sheets
(Amounts in thousands, except
share and per share data)
(Unaudited)
March 31
December 31
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
94,443
$
122,715
Restricted cash, current
12,343
12,102
Accounts receivable, net
39,694
33,378
Contract assets
42,386
38,447
Prepaid expenses
28,914
28,207
Other current assets
625
1,668
Total current assets
218,405
236,517
Property and equipment, net
12,469
12,881
Intangible assets, net
145,970
149,248
Operating lease right of use assets
6,795
6,459
Goodwill
316,074
309,894
Investments
23,008
23,682
Restricted cash, non-current
24,686
24,203
Other assets
10,450
10,453
Total assets
$
757,857
$
773,337
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
21,359
$
33,121
Accrued expenses
60,225
56,956
Deferred revenue
35,443
41,273
Current debt
7,179
7,405
Derivative warrant liabilities
-
6,922
Operating lease liabilities, current
3,337
3,462
Other current liabilities
17,219
22,001
Total current liabilities
144,762
171,140
Long-term debt – less current portion
35
7,088
Deferred tax liability
15,539
15,009
Operating lease liabilities,
non-current
3,622
3,284
Total liabilities
163,958
196,521
Shareholders' equity
Common stock, $0.01 par value, unlimited
shares authorized, 212,153,012 shares issued and 208,047,064 shares
outstanding at March 31, 2023; unlimited shares authorized,
201,853,695 shares issued and outstanding at December 31, 2022
2,122
2,019
B Shares, $0.0001 par value, 22,500,000
shares authorized, 18,500,000 shares issued and outstanding at
March 31, 2023 and December 31, 2022
2
2
Additional paid-in capital
1,619,750
1,568,917
Treasury stock, at cost, 4,105,948 shares
at March 31, 2023; nil shares at December 31, 2022
(17,653
)
-
Accumulated deficit
(964,121
)
(938,953
)
Accumulated other comprehensive loss
(46,201
)
(55,169
)
Total shareholders' equity
593,899
576,816
Total liabilities and shareholders'
equity
$
757,857
$
773,337
Genius Sports Limited
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
Three Months Ended
March 31
March 31
2023
2022
Cash Flows from operating
activities:
Net loss
$
(25,168
)
$
(40,198
)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization
17,308
17,495
Loss on disposal of assets
11
6
(Gain) loss on fair value remeasurement of
contingent consideration
2,433
(4,408
)
Stock-based compensation
10,561
37,180
Change in fair value of derivative warrant
liabilities
534
(8,742
)
Non-cash interest expense, net
72
172
Non-cash lease expense
964
1,849
Amortization of contract cost
226
229
Deferred income taxes (benefit)
227
11
Provision for doubtful accounts
58
1,020
Gain from equity method investment
(269
)
-
Gain on foreign currency remeasurement
(795
)
(9,967
)
Changes in operating assets and
liabilities
Accounts receivable
(5,657
)
(5,310
)
Contract asset
(3,143
)
(12,274
)
Prepaid expenses
(143
)
(5,947
)
Other current assets
1,066
1,832
Other assets
(576
)
(3,274
)
Accounts payable
(12,306
)
1,360
Accrued expenses
2,113
(3,051
)
Deferred revenue
(6,592
)
6,964
Other current liabilities
925
1,980
Operating lease liabilities
(1,019
)
(1,844
)
Other liabilities
327
(278
)
Net cash used in operating
activities
(18,843
)
(25,195
)
Cash flows from investing
activities:
Purchases of property and equipment
(310
)
(1,159
)
Capitalization of internally developed
software costs
(9,979
)
(10,419
)
Distributions from (contribution to)
equity method investments
1,398
(7,871
)
Equity investments without readily
determinable fair values
-
(150
)
Acquisition of business, net of cash
acquired
-
(20
)
Proceeds from disposal of assets
-
121
Net cash used in investing
activities
(8,891
)
(19,498
)
Cash flows from financing
activities:
Repayment of loans and mortgage
(5
)
-
Proceeds from exercise of Public
Warrants
6,812
-
Repayment of promissory notes
(7,387
)
-
Net cash used in financing
activities
(580
)
-
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
766
(3,512
)
Net decrease in cash, cash equivalents
and restricted cash
(27,548
)
(48,205
)
Cash, cash equivalents and restricted cash
at beginning of period
159,020
222,378
Cash, cash equivalents and restricted cash
at end of period
$
131,472
$
174,173
Supplemental disclosure of cash
activities:
Cash received (paid) during the period for
interest
$
490
$
(219
)
Cash paid during the period for income
taxes
$
(179
)
$
(13
)
Supplemental disclosure of noncash
investing and financing activities:
Shares issued to subsidiary for cashless
Public Warrant exercise
$
17,653
$
-
Promissory notes arising from equity
method investments
$
-
$
14,688
Issuance of common stock in connection
with business combinations
$
8,440
$
17,452
Genius Sports Limited
Reconciliation of U.S. GAAP
Net loss to Adjusted EBITDA
(Unaudited)
(Amounts in thousands)
Three Months Ended March
31,
2023
2022
(dollars, in thousands)
Consolidated net loss
$
(25,168
)
$
(40,198
)
Adjusted for:
Net, interest (income) expense
(418
)
391
Income tax expense
648
576
Amortization of acquired intangibles
(1)
9,733
10,721
Other depreciation and amortization
(2)
7,801
7,003
Stock-based compensation (3)
10,705
37,180
Transaction expenses
828
128
Litigation and related costs (4)
784
4,917
Change in fair value of derivative warrant
liabilities
534
(8,742
)
Loss (gain) on fair value remeasurement of
contingent consideration
2,433
(4,408
)
Gain on foreign currency
(801
)
(12,632
)
Other (5)
963
2,171
Adjusted EBITDA
$
8,042
$
(2,893
)
(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 first 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/20230509005473/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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