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Sportradar nears upper end of FY23 revenue guidance with US growth

| By Kyle Goldsmith
Sportradar generated €877.6m (£749.6m/$951.5m) in revenue over its 2023 financial year, nearing the upper end of its guidance range thanks to growth in the US.
Sportradar revenue

Revenue was up by 20.2% year-on-year to €877.6m, with Sportradar’s annual outlook for 2023 initially setting a revenue target of €870m to €880m. Revenue growth was powered by increases of 30.0% in the US and 20.0% in Sportradar’s rest of world category.

Significant revenue growth led Sportradar to a total profit from continuing operations of €34.6m, up 229.5% from 2022’s total profit of €10.5m. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 32.6% year-on-year to €166.8m, close to exceeding Sportradar’s outlook range of €162m-€167m.

Adjusted EBITDA margin jumped 177 basis points from 2022 to 19.0%, with Sportradar attributing this to strong operating leverage from sports rights and personnel costs.

As of 31 December 2023, Sportradar had €497.2m in available liquidity, including undrawn credit facilities. Cash and cash equivalents also stood at €277.2m.

Sportradar’s positive outlook has led them to authorise a share buyback programme worth €200m.

Carsten Koerl, Sportradar’s chief executive lauded the company’s performance last year.

“2023 was another dynamic and successful year for the company delivering our third consecutive year of more than 20% revenue growth, improved profitability and margin expansion,” he said. “We are pleased with our growth momentum, fuelled by our best-in-class content portfolio, innovative product roadmap and technology capabilities.”

Despite the rise in FY2023 revenue, Sportradar couldn’t quite match its FY2022 success, which saw the company beat its annual outlook range of €718m-€723m in revenue by generating €730.2m.

Sportradar’s Q4 profit a strong end to 2023

sportradar enjoyed rises in revenue and adjusted ebitda for q4

Sportradar’s ability to meet its FY2023 revenue and adjusted EBITDA guidance was in large part down to a Q4 that saw the company record double-digit growth in both of those financial measures, as well as a turn to profitability compared to the same quarter last year.

Revenue was up 22.4% year-on-year in Q4, reaching €252.6m thanks to growth across all segments. Adjusted EBITDA, meanwhile, hiked by 12.5% to €39.5m.

That success allowed Sportradar to make a profit from continuing operations of €23.2m, a significant improvement on the €33.3m recorded in loss during the same quarter last year, as well as a large increase on Q3’s disappointing profit of €4.6m.

Adjusted EBITDA margin dropped from 17% last year to 16% in 2023, although Sportradar stated its customer net retention rate of 111% in Q4 showed the company’s ability to both cross-sell and up-sell to its client base.

US investment leads to growth

US success was a key factor in Sportradar’s full-year 2022 results with 78% in revenue growth in the country.

Although the company couldn’t quite match that growth in 2023, continued rises in US revenue have left Sportradar well-placed to continue to make its mark there.

US revenue in Q4 was up by 28.2% year-on-year to €52.7m, with Sportradar crediting strong market performance aided by the sale of additional services to clients as well as contributions from the company’s increasingly tight relationship with the National Basketball Association (NBA). In October, Sportradar agreed a deal with BetMGM to give the operator access to NBA tracking data.

Earlier this week, Sportradar announced it would further its NBA partnership by implementing its betting features directly into the NBA’s League Pass streaming service.

Despite the US revenue rises, the costs from enhancing its NBA deal meant that Sportradar’s adjusted EBITDA in the country for Q4 was a loss of €1.5m, having recorded a €4.3m profit in the same quarter last year. However, that investment should set the business up to return to profitability in the US in the near future.

Rest of the world also performing well

In its rest of world sector, Sportradar also saw Q4 increases in its betting and audiovisual segments.

Rest of world betting revenue shot up by 24.6% year-on-year to €132m, with growth driven by a 48.0% increase in sales of Sportradar’s managed betting services (MBS) solution, as well as a 21.0% growth in the company’s live odds services sector. Rest of world betting’s adjusted EBITDA rose by 19% to €55m.

In terms of rest of world audiovisual, segment revenue jumped by 19.8% to €50m, with Sportradar pointing to the addition of NBA and the South American Football Confederation (CONMEBOL) rights as the reason for the rise. The division’s adjusted EBITDA was €11.2m, down from the €11.9m recorded in Q4 2022.

Costs and expenses included €57.8m in purchased services and licences, consisting of set-up costs stemming from the October deal with the Taiwan Lottery as well as other rights deals. A total of €88.8m was paid in personnel expenses, while total sports right costs and other operating expenses accounted for €75.1m and €24.4m respectively.

A busy year for Sportradar in 2023

sportradar has expanded its relationship with the nba

Sportradar’s expansion of its relationship with the NBA earlier this week follows a 2023 in which the company made a number of deals looking to grow its presence.

Hoping to boost its US growth, Sportradar penned a four-year extension to its media data rights partnership with the National Association for Stock Car Auto Racing (NASCAR) in August, as well as renewing its deal with Caesars Sportsbook to supply official betting data.

In December, Sportradar agreed a global data and streaming rights deal with Tennis Data Innovations, which is a joint venture vehicle of the Association of Tennis Professionals (ATP) and ATP Media.

Revenue growth of 20% and adjusted EBITDA the 2024 target

sportradar is looking to achieve 20% growth in revenue and adjusted ebitda in 2024

After a solid 2023, Sportradar has set its sights on 20.0% year-on-year growth in both revenue and adjusted EBITDA for its 2024 financial year.

That would take revenue up to at least €1.05bn, while 20.0% growth in adjusted EBITDA would mean a figure of at least €200m, with guidance assuming a euro to US dollar exchange of 1.07.

Sportradar is also eyeing a stable adjusted EBITDA margin of 19.0%, the same as in the entirety of FY2023 but up from the 16.0% seen in Q4.

“For 2024, we plan to continue to scale our business globally, targeting at least 20% growth in revenue and adjusted EBITDA,” Koerl continued. “We remain laser focused on disciplined execution of our growth strategy and delivering tremendous value for our clients and our shareholders.”

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