Sportradar reports Q1 loss despite revenue and EBITDA growth
Sportradar posted Q1 revenues of €265.9m, up 28.1% on the €207.6m generated in the same quarter last year. Meanwhile, adjusted EBITDA reached €47.2m, a 28.6% increase on the €36.7m accumulated in Q1 2023. Sportradar attributed the adjusted EBITDA increase to revenue growth and enhanced operating efficiency, both of which offset increasing sports rights’ costs.
Sportradar pointed to “broad-based strength” across its product portfolio as the reasons for its revenue growth. Revenues from its betting technology and solutions sector shot up by 34.6% to €218.8m, accounting for 82.3% of Sportradar’s total revenue. Its sports content, technology and solutions segment accounted for the other 17.7%, also seeing its revenue increase 4.7% to €47.1m.
The company’s total liquidity of €494.6m was also 7.6% higher than the €459.6m it had at the end of Q1 2023.
However, Sportradar still posted a Q1 loss, significantly down on the €6.8m in profit generated in the same quarter last year. Sportradar says its loss as a percentage of revenue for Q1 was negligible.
Sportradar chief executive Carsten Koerl remains upbeat over the company’s performance, with adjusted EBITDA margin remaining stable at 18%.
“Fiscal 2024 is off to a great start, building on the strong momentum and progress we made last year,” Koerl said. “This quarter, we saw broad-based strength across our product portfolio including strong client adoption of our ATP and NBA product offerings.”
Increasing costs lead to Sportradar net loss
Sportradar’s loss in the face of revenue and EBITDA growth was largely down to significant increases in costs.
Purchases of services and licences amounted to €65.2m, 34.7% up on the €48.4m total from Q1 2023. Finance costs more than tripled to €18.8m, while foreign currency losses increased 291.9% to €14.5m.
While personnel expenses remained largely flat at €79.6m from €77.5m in Q1 2023, depreciation and amortisation costs totalled €76.9m, a 61.6% increase from €47.6m in the same quarter last year.
Sports right costs were up by €39.8m or 78% year-on-year, reaching €90.9m. Sportradar put this down to its partnership deals with the Association of Tennis Professionals (ATP) and the National Basketball Association (NBA). The company stated its increased sports right costs were in line with 2024 expectations.
Revenue increases
Despite the Q1 loss, Sportradar posted encouraging revenue increases across its sectors thanks to its sports partnerships.
For instance, Sportradar pointed to its data and streaming rights deal with Tennis Data Innovations, a joint venture between the ATP and ATP Media, as reasons for growth in its betting technology and solutions sector. Sportradar also noted its close relationship with the NBA. The company agreed a partnership with BetMGM in October to allow the operator to access NBA tracking data.
Sportradar attributed 46% year-on-year growth in streaming and betting engagement to strong demand for its ATP content. Meanwhile, live data and odds were up 29% in Q1 because of premium pricing for the NBA, as well as new ATP product offerings.
For its sports content, technology and solutions sector, meanwhile, Sportradar highlighted a 6% revenue rise in its marketing and media services, helping to offset flat growth in sports performance.
Increasing US strength boosting Sportradar growth
In terms of markets, a key highlight in Sportradar’s Q1 was increasing strength in its US performance.
Revenue in the US reached €60.5m. This was up 65% from the €39.7m generated in the same quarter of last year. Meanwhile, revenue in its rest of world markets reached €200.4m, a year-on-year 19.4%.
US revenue growth means the market now accounts for 25% of Sportradar’s total revenue, up from 19% in Q1 2023.
Sportradar raising 2024 outlook despite net loss
Although it posted a Q1 net loss, Sportradar is increasing its 2024 annual financial outlook.
Sportradar’s previous guidance set a target of €1.05bn in 2024 revenue although, off the back of its revenue increases in Q1, it has raised its objective to €1.06bn. This will equate to 21% year-on-year growth.
Additionally, Sportradar is now eyeing a 2024 adjusted EBITDA of €202m, up from its previous €200m target. This would again be a 21% year-on-year rise. The company has opted not to raise its adjusted EBITDA margin target, maintaining its approximate 19% objective.
In March, Sportradar’s board of directors approved a share repurchase programme worth €200m. Koerl says the company is in the process of beginning that process.
“In light of our strong business fundamentals, we are raising our full-year outlook and are commencing purchases under our share repurchase programme,” Koerl explained.