Sportradar Q2 revenue up 29% despite rights costs impacting bottom line
Sportradar Q2 earnings also noted an adjusted EBITDA of €48.8m, indicating a 22% increase on the previous year.
It added 46 new betting clients to its core trading product in Q2. That resulted in €9bn of turnover being processed via its platform between April and June.
Its betting technology and solutions division revenue grew 30% to €229.1m during the period. Revenue for its sport content, technology and services arm also increased 22% and came in at €49.3m. The betting technology arm accounted for 82% of total company revenues.
Managed Betting Services grew €9m driven by higher trading margins and increased betting activity from new and existing customers.
Net cash reserves were €15.26m by the end of Q2.
Speaking to analysts, CEO Carsten Koerl said the provider’s increasing use of generative AI is a primary focus for future product development. Koerl noted its intention to develop new experiences for players, particularly around answering questions on ongoing and historic games.
Koerl said generative AI would power new multi-model experiences for sports consumption that will be hyper-personalised to fans.
“We see this as the next phase in the future of sports consumption,” he said.
Sportrader hired ex-Google VP of engineering Behshad Behzadi as its CTO and chief AI officer in May to further develop its AI capabilities.
Sports rights costs increase
Sportradar said losses for Q2 hit €1.5m compared to last year when it broke even.
CFO Craig Felenstein said losses were the result of sports rights costs increasing 83% to €95.9m. He pointed, in part, to Sportradar’s data and streaming deal with the Association of Tennis Professionals (ATP) signed in December 2023.
Felenstein said sports rights costs would not increase again in the next couple of years.
“We have the main pillars of our portfolio and ATP was a major step up for us. We don’t see anything material in the next couple of years on this,” he said.
In July, Sportradar extended its existing exclusive betting data rights agreement with European football governing body UEFA to cover tournaments to 2028.
Sports rights costs basically being set, any increase in revenue from here would push them into greater profit than what they had previously. So if they are able to maintain their growth, those rights will probably be paying off for them from 2025 onwards.
The provider has increased its fiscal 2024 revenue outlook lightly from €1.06m to €1.07m. It also raised its adjusted EBITDA forecast to €204m for the full year, with an expected EBITDA margin of 19%.