Genius Sports Ltd. Q3 FY2024 earnings call

Sportsbook Renewals: Agreed new commercial terms with major US and non-US sportsbooks, achieving universal pricing uplift across renewals. BetVision distribution expanded to nearly every major US sportsbook, with unique weekly streamers doubling since week one of the NFL season. ### NFL Season Trends: US sports betting industry saw ~30% handle growth and ~40% gross gaming revenue growth in Q3. In-play betting on NFL was up nearly 80% in GGR and ~50% in Handle, with in-play wagering representing 30% of total NFL Handle. ### BetVision Updates: BetVision platform has seen significant growth in viewership and wagering data, with in-play betting on the platform representing 59% of total handle. New features like augmented livestreams, bet tracker, and touch screen capabilities are being rolled out. ### Media and Ecosystem Expansion: Announced agreements with ESPN for real-time stats, player tracking partnership with WNBA for analytical coaching, and partnership with LA Rams for data-driven highlights. Launched FANHub, a fan activation platform to help brands connect with sports audiences.

Genius Sports reported group revenue of $120 million, representing an 18% year-on-year growth. Group adjusted EBITDA was $26 million in the quarter, up 45% year-on-year with a margin of 21%. The gross margin was 33% in the quarter, a nearly 950 basis points expansion year-on-year. Revenue contribution from the betting product was significant, with US sports betting growing 60% compared to Q3 last year, and European revenue achieving 22% year-on-year growth following successful renewals with non-US sportsbooks.

2024 Guidance: Raised 2024 group revenue guidance to $511 million (up 24% y-o-y) and group adjusted EBITDA to $86 million (up 61% y-o-y). ### Q4 Guidance: Reaffirmed Q4 guidance of nearly 40% revenue growth and 900 basis points of adjusted EBITDA margin expansion. ### Long-Term Outlook: Confident in sustaining 20% plus revenue growth through 2025 and beyond, with extension of largest rights deals and improved commercial terms with sportsbooks providing visibility.

Q: On sportsbook renegotiations, how to think about magnitude of change in blended commission rates and timing? Also, on Media segment product announcements and qualitative drivers for 2025.

A: Nick Taylor said they've taken price on every deal, with results seen in numbers like US sports betting up 60% y-o-y in Q3. Mark Locke said Media's self-serve platform provides opportunity, positioning as trade desk for sports with unique data and understanding of sports fans.

Q: Size of impact of negative sports results on 4Q, Europe growth acceleration, and US sports renewals construct.

A: Mark Locke said focused on BetVision, Media, and value increase, with renegotiation periods having more balanced term lengths. Nick Taylor said Q4 has multiple growth levers despite US sportsbook headwinds, and Europe has 22% growth with new products driving upsell.

Q: On 4Q guide drivers, media self-service impact on revenue and margins.

A: Mark Locke said self-service is new revenue, not initially cannibalizing existing managed services. Nick Taylor said Q4 growth from sportsbook deals, GGR/TAM growth, and media growth.

Q: On FANHub pipeline and cost structure for growth initiatives.

A: Mark Locke said FANHub is trade desk for sports, utilizing unique data and understanding of sports fans. Nick Taylor said business has operating leverage with tailwinds flowing through at high margin.

Q: On NFL revenues, betting behavior, in-play NFL hold rate, and EBITDA margin target.

A: Mark Locke said strong relationship with NFL, BetVision driving innovation. Nick Taylor said EBITDA margin target is tangible with visibility, and in-play is growing with BetVision driving interest. Mark Locke added on EBITDA margin, discussing compounding effect from multiple products and conservative view on Brazil legalization impact.