Home > Finance > Quarterly results > Genius at “critical” turning point after raising guidance amid Q3 growth

Genius at “critical” turning point after raising guidance amid Q3 growth

| By Robert Fletcher
Genius Sports has increased its full-year revenue and adjusted EBITDA guidance after posting a 29.3% increase in revenue to $101.7m (£83.0m/€95.3m) in Q3.
Rivalry Q1 Token

The data, technology and broadcast business reported growth across all segments in Q3 but remained at a net loss. However, such was this growth that, coupled with success earlier in 2023, this was enough for Genius to raise guidance.  

Genius saw the most growth within its betting technology, content and services division in the quarter. A 34.1% rise in revenue here was complemented by double-digit percentage growth across both its media and sports businesses.

Co-founder CEO Mark Locke, along with CFO Nick Taylor, both praised Q3 growth and the impact of Genius’ ongoing expansion plans. Taylor went as far as saying the business has reached a “critical” turning point.

“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,” Locke said.

Taylor added, “We have reached a critical turning point in our business. We have realised 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.”

Betting remains the core focus for Genius

Breaking down segmental performance in Q3, the betting technology, content and services arm drew $65.9m. This was 34.1% ahead of the three months to 30 September last year. 

Genius says this was driven by new customer acquisitions, increased customer utilisation of available content and growth in business with existing customers. The latter, it adds, was put down to price increases on contract renewals and renegotiations, expansion of value-add services and new service offerings.

Elsewhere, media technology, content and services revenue climbed 27.9% to $17.9m. This was helped by growth in the Americas region, primarily for programmatic advertising services.

The remaining $12.9m in revenue came from technology and services, up 11.3%. 

2022 foreign currency gain skews year-on-year comparison

Turning to spending, cost of revenue increased 6.3% to $77.4m but operating expenses fell 15.3% to $33.2m. Genius noted an additional $1.2m in interest income but this was more than offset by a $4.2m loss on foreign currency. In contrast Genius last year reported a $25.5m gain on foreign currency, with this skewing the year-on-year comparison.

As such, pre-tax loss hit $12.0m, wider than last year’s $10.6m loss. Genius paid $1.2m in tax but gained $1.5m from equity investment method. This left a net loss of $11.6m, compared to $9.0m last year.

However, group adjusted EBITDA in Q3 rocketed 131.1% to $17.7m.

Year-to-date growth clear to see at Genius

As to how Q3 impacted Genius and its year-to-date performance, revenue was 21.3% higher at $285.8m in the nine months to 30 September.

Betting-related revenue was 30.5% higher at $187.5m, while media revenue climbed 10.5% to $63.1m and sports revenue 0.8% to $35.2m.

Cost of revenue hit $227.3m and operating expenses $98.3m, both lower year-on-year. The business also noted $3.9m in net other costs, whereas last year this was reported at $82.6m in income due to a $68.3m gain on foreign currency.

This left a pre-tax loss of $43.7m, still an improvement on $55.5m last year despite the gain on foreign currency impact. Genius paid $5.8m in income tax and gained $2.4m from equity investment method.

As such, it ended the period with a net loss of $47.1m, shorter than $53.9m last year. In addition, group adjusted EBITDA hiked 215.3% to $41.4m.

Looking ahead to full-year growth

Based on these figures, Genius has increased full-year guidance for both revenue and group adjusted EBITDA.

Group revenue should now hit approximately $412.0m and group adjusted EBITDA $53.0m.  

This revenue is forecast to include $268.0m from the betting business, $94.0m media and $50.0m sports.

Subscribe to the iGaming newsletter