Financial reports
Rivalry Reports Third Quarter 2024 Results; Rivalry Token Momentum Leading Company’s Crypto-Native Future; Reveals Organizational Realignment, Major Product Revamp
Rivalry Token Captures $3.0 Million in Deferred Revenue; Company Executes Significant Organizational Realignment Throughout the Third Quarter to Reposition Product, Brand, and Team for Crypto Gambling Market; Delivers Substantial Reduction in Operational Expenses; Closes Second Tranche of Non-Brokered Private Placement for $1.0 Million
- As of today, the Company has completed the largest product, brand, and marketing overhaul in its history to support a global, crypto-first strategy and maximize wallet share of high value players (“HVP’s”).
- Average net revenue per user has hit all-time records, increasing by 51% as compared to the average of the trailing 2024 period, and by 70% as compared to the trailing three-year average since launching the initial set of new product features in October.
- Rivalry’s current run rate operating expenses are approximately 50% lower as compared to those in this Q3 2024 report. This is a result of its third quarter organizational realignment, and the associated cost savings now being nearly fully realized.
- Crypto-native strategy, led by Rivalry Token, is delivering strong results, with crypto wallet-connected customers generating 200% more revenue than baseline users and retention rates 30% above the average.
- Rivalry closes the second tranche of its previously announced financing for aggregate proceeds to date of $3.0 million, fortifying its balance sheet. The Company was pleased to see support from insiders, family and friends, and long-term shareholders, validating its meaningful organizational transformation executed throughout the third quarter.
- Third quarter betting handle of $79.9 million1.
- Adjusted Revenue of $6.0 million2.
Rivalry Corp. (the “Company” or “Rivalry”) (TSXV: RVLY) (OTCQX: RVLCF) (FSE: 9VK), the leading sportsbook and iGaming operator for digital-first players, today announced financial results for the three- and nine-month periods ended September 30, 2024. All dollar figures are quoted in Canadian dollars.
“From the start of the third quarter through to the release of these results, we have undergone the most substantive evolution of our business since founding,” said Steven Salz, Co-Founder and CEO of Rivalry. “This work was done to better attune ourselves to an evolving online gambling market where cryptocurrency has become the global payment method of choice, and to align our offering with the experiential expectations of the players driving this industry-wide shift. These initiatives were set in motion during the second quarter alongside the announcement of Rivalry Token, and I’m proud to say we are emerging out the other side of this undertaking as a fundamentally leaner company, and better positioned for growth.”
“Over this period we have completely rebuilt every core element of our product, intentionally designed to service crypto-native users and high value players. We’ve also undergone a comprehensive rebrand, and significantly drawn down marketing spend associated with our prior strategy. Our native crypto token has developed materially, becoming more integrated with our VIP strategy and overall growth plan, allowing us to better scale in this category. On an organizational level, we reduced our headcount by 50% through two workforce rationalizations and adjusted our performance culture, resulting in a more robust and higher output organization, with measurable output climbing over 200%.”
“The immediate financial results of this high-conviction business evolution is that short-term net revenue is down, however we are beginning to go back on the offensive with a completely evolved product, brand, and marketing approach, as well as an operating footprint that presents a much smaller gap to profitability to close. Despite this transitional net revenue impact, we are already observing high signal from our work; in just the two short months since we began to deploy the initial set of crypto and HVP-targeted product releases, our average net revenue per user has hit all-time record levels, increasing by 51% as compared to the 2024 year-to-date average, and by 70% as compared to the trailing three-year average.”
Operational Update
“Earlier this week we finalized the most substantial product overhaul in Rivalry’s history, including a revamped registration flow, login, sportsbook, new crypto-first cashier, completely redesigned casino offering, and a comprehensive VIP rewards program,” Salz added. “We’re confident this entirely rebuilt product set, debuted alongside a more mature, digital-first rebrand, will accelerate Rivalry’s position as a global, crypto-native operator and enable us to capture a high-value player audience.”
“The breakneck pace in which this massive body of work was completed is a testament to the Rivalry team’s motivation to show our multi-year track record of growth and innovation is not just capable of delivering profitability, but also demonstrating market leadership. This will to win is backed by the confidence and conviction that these initiatives will enable us to execute our growth strategy with more torque, underpinned by an overall significantly reduced company cost basis.”
- Sportsbook Overhaul: Rivalry has completed a major overhaul of its sportsbook product, adding over 40 new sports, embedded live streams, match statistics and information, a simplified interface, and more to enhance the user experience.
- Casino Enhancements: Redesigned the casino experience to improve functionality, added a significant amount of new content, and released Casino Races, an interactive way for players to compete against one another and earn rewards based on their wagering activity, all of which builds on Rivalry’s fast-growing iGaming vertical.
- Crypto Payment Integrations: Introduced a crypto-first cashier for faster and more flexible deposit and withdrawal options, enhancing the global user payment experience and positioning Rivalry to gain greater crypto market share. In addition to crypto depositing, players can now also wager with digital currencies, an important offering that deepens the experience for users.
- VIP & Rewards Program Launch: Launched a new VIP program featuring cashback, free spins, monthly, weekly, and daily rewards to strengthen player retention and drive user activity, particularly among high-value players. This asymmetrically rewards larger play so Rivalry’s most loyal players have more reasons to play every day, driving HVP wallet share.
- CRM & Reactivation: Materially enhanced and rebuilt all customer relationship management flows based on deeper business intelligence to improve conversion and reactivate churned players.
- Optimized Registration Journey: Refined the registration journey to reduce friction and expedite user onboarding while remaining compliant.
- Strategic Rebrand: Rivalry has begun rolling out a strategic rebrand across its product and marketing channels to better target crypto gamblers and digital-first players, reinforcing product-market fit among this audience.
- Executive Salary Reduction: Rivalry’s Chief Technology Office Ryan White and Chief Operating Office Kevin Wimer have taken a voluntary 100% reduction in their salaries as of August and September, respectively, while Chief Executive Officer Steven Salz voluntarily reduced his salary by 100% as of October, and now by 50% as of November.
“As part of our broader cost-saving measures and motivation to reach profitability, Rivalry’s founders and executive leaders have all agreed to take a voluntary reduction in compensation,” Salz added. “It’s important that the leadership team share in the sacrifices we’ve asked of our team and shareholders in the near-term as we complete this top-to-bottom realignment and strategy shift which we can now build off of.”
NUTZ (Rivalry Token)
“Our native token continues to create a strong level of alignment with players and act as a cornerstone of our crypto-first and HVP strategy,” Salz added. “In six months, the pre-release of NUTZ, previously known as Rivalry Token, has demonstrated its ability to grow our crypto market share, attract higher-value players, enhance retention, and create long-term engagement loops across our offerings. NUTZ are now deeply connected with our newly released VIP program, together they offer a highly customer-centric experience that will continue establishing lasting player loyalty, increased wallet share, consistent betting activity, and generate higher average player revenue profiles.”
“NUTZ has delivered an additional $3.0 million in deferred revenue within the third quarter, which we see as a great signal of the token finding market-fit among the target audience and within our offering. We expect to generate additional token sales in the fourth quarter, and first quarter next year, with an anticipated launch in early 2025. We have an extensive roadmap ahead of launch, and shortly after, designed to maximize the value proposition of this product for existing users, acquire new customers, and generate revenue for Rivalry.”
- In Q3 2024, NUTZ drove an additional $3.0 million in deferred revenue3. Additional deferred revenue is expected to be accrued for the business throughout the remainder of the fourth quarter and into Q1 2025.
- On average, crypto wallet-connected players generated 200% more revenue than the average non-crypto player on Rivalry.
- Nearly one third of all HVP’s on Rivalry have connected their digital wallet and engaged in our pre-release NUTZ farming program, showcasing high crossover between VIP players and crypto offerings.
- Retention rates for customers opted in to earn NUTZ is 30% higher than non-opted in users.
- Rivalry will soon be releasing a Telegram-native product to generate more user acquisition and engagement for its NUTZ token.
Third Quarter 2024 Highlights
- Betting handle for Q3 2024 was $79.9 million, down modestly sequentially.
- Adjusted Revenue in Q3 2024, inclusive of $3.0 million in deferred revenue for NUTZ, was $6.0 million. Net Revenue was $3.0 million in Q3 2024. The nine months ended Net Revenue was $12.1 million, down 8% from the comparable period in 2023. This is primarily a result of a reduction in marketing spend, and an increasing mix of casino betting handle, which although more stable is lower margin than sportsbook. Additionally, a portion of the recorded marketing spend in the quarter were agreement exit costs, and did not drive player acquisition.
- Average net revenue per user has hit all-time records, increasing by 51% as compared to the average of the trailing 2024 period, and by 70% as compared to the trailing three-year average since launching the initial set of new product features in October.
- Rivalry’s current run rate operating expenses are approximately 50% lower as compared to those in this Q3 2024 report as a result of its third quarter organizational overhaul and the associated cost savings near fully realized. This cost structure is expected to support reaching a profitability inflection point.
- Casino accounted for 62% of betting handle and 40% of Net Revenue in the third quarter, up 14% and 2% year-over-year, respectively. Rising casino share is attributed to new content, exclusive games, and continued product development.
- Marketing spend was $2.0 million, down 30% year-over-year. Rivalry had scaled back marketing efforts in the second and third quarters amid its crypto strategy shift and is expected to restart in early December alongside its recently revamped product set and strategic rebrand.
- The Company had $2.1 million of cash as at September 30, 2024.4 Rivalry’s recently closed non-brokered private placement for aggregate gross proceeds of $3.0 million further supports balance sheet and shows endorsement from insiders and investors in strategic business realignment.
- The Company is updating its H2 2024 profitability guidance. “Our efforts in the third quarter have set the foundation for renewed growth, and while we expect near-term profitability, we are temporarily stepping back from providing specific guidance during this transitional period,” Salz added.
Second Non-Brokered Private Placement Closing
The Company also announces the second closing (the “Second Closing“) of its non-brokered private placement of units of the Company (“Units“), previously announced on November 26, 2024 (the “Offering“). Under the Second Closing, the Company issued 6,984,891 Units at a price of CDN$0.15 per Unit, for gross proceeds of approximately $1.05 million. The Company may complete one or more additional closings, for aggregate gross proceeds (together with the proceeds raised under the initial closing and Second Closing) of up to approximately USD $3.0 million. The Company intends to use the proceeds from the Offering for corporate development and general working capital purposes. The subordinate voting shares and warrants, and any securities issuable upon exercise thereof, are subject to a four-month statutory hold period, in accordance with applicable securities legislation. The Company has paid an aggregate of $4,174.98 in finder’s fees in connection with Second Closing.
Staff Stock Option Reprice
The Company also announces that it intends to amend the exercise price of certain previously granted options (the “Subject Options”) to purchase an aggregate of 1,600,828 subordinate voting shares of the Company (“Subordinate Voting Shares”) pursuant to the Company’s 2021 Equity Incentive Plan, as amended from time to time. The Subject Options have exercise prices ranging from $0.81 to $1.10 per Subordinate Voting Share. The Company intends to amend the exercise price of the Subject Options to $0.18 per Subordinate Voting Share. All other terms of the Subject Options will remain unamended. The amendments to the Subject Options are subject to the approval of the TSX Venture Exchange.
“Rivalry’s talent is the most critical determinant of our success. With the changes we have undergone through the third quarter, retaining talent is more critical than ever, and directly linked to ensuring Rivalry’s continued success,” said Salz. “We believe that these contemplated amendments maximize alignment, incentive, and motivation for the team.”
Board of Directors Change
The Company also announces that Kirstine Stewart has resigned as a director of the Company, to be effective December 20, 2024. The Company has identified several new independent director candidates to fill the vacancy to be created by Ms. Stewart’s resignation and expects to provide additional information once available.
“It has been a great pleasure serving on this board and being a part of the incredibly talented and dynamic team at Rivalry for the last three years,” said Kirstine Stewart. “I have utmost confidence that they will continue to redefine the online gambling category and remain a committed and enthusiastic shareholder in that future success.”
“I want to thank Kirstine for her tenure with us as a Director,” Salz said. “Her expertise over the years as we grew from our public listing until today was essential. As we make a strategic shift toward a global crypto-first approach, we will take this opportunity to add to our board and support this exciting new direction for the Company.”
Investor Conference Call
Management will host a conference call at 10:00 a.m. EDT on Friday, November 29, 2024 to discuss the Company’s third quarter 2024 financial results.
| Dial-in: | 1-800-717-1738 (toll free) or (+1) 289-514-5100 (local or international calls) |
| Webcast: | A live webcast can be accessed from the Events section of the Company’s website at rivalrycorp.com |
| A replay of the webcast will be archived on the Company’s website for one year. | |
Rivalry’s financial statements and management discussion and analysis for the period ended September 30, 2024 (the “Q3 2024 MD&A”) are available on SEDAR+ at sedarplus.ca, and on the Company’s website at rivalrycorp.com.
About Rivalry
Rivalry Corp. wholly owns and operates Rivalry Limited, a leading sport betting and media company offering fully regulated online wagering on esports, traditional sports, and casino for the digital generation. Based in Toronto, Rivalry operates a global team in more than 20 countries and growing. Rivalry Limited has held an Isle of Man license since 2018, considered one of the premier online gambling jurisdictions, as well as an internet gaming registration in Ontario, and is currently in the process of obtaining additional country licenses. With world class creative execution and brand positioning in online culture, a native crypto token, and demonstrated market leadership among digital-first users Rivalry is shaping the future of online gambling for a generation born on the internet.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Company Contact:
Steven Salz, Co-founder & CEO
[email protected]
Investor Contact:
[email protected]
Media Contact:
Cody Luongo, Head of Communications
[email protected]
203-947-1936
Non-IFRS Measures
Adjusted Revenue, as reported in this news release, is a non-IFRS financial measure that the Company uses to assess its operating performance. Adjusted Revenue is defined revenue, plus deferred revenue from the Company’s native crypto token NUTZ and which is expected to be realized by the Company as revenue upon the launch of NUTZ. This data is furnished to provide additional information and is a non-IFRS measure and does not have any standardized meaning prescribed by IFRS. The Company uses this non-IFRS measure to provide shareholders and others with supplemental measures of its operating performance. As other companies may calculate this non-IFRS measure differently than the Company, this metric may not be comparable to similarly titled measures reported by other companies.
Cautionary Note Regarding Forward-Looking Information and Statements
This news release contains certain forward-looking information within the meaning of applicable Canadian securities laws (“forward-looking statements”). All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “outlook”, “expect”, “project” and similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions “may” or “will” occur. These statements are only predictions. Forward-looking statements in this news release include, but are not limited to, statements in respect of the future profitability of the Company, the increase in net revenue per user subsequent to September 30, 2024, the launch of NUTZ and Rivalry’s crypto-first and HVP strategy and the potential impact thereof on the Company’s business prospects.
Forward-looking statements are based on the opinions and estimates of management of the Company at the date the statements are made based on information then available to the Company. Various factors and assumptions are applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Forward-looking statements are subject to and involve a number of known and unknown, variables, risks and uncertainties, many of which are beyond the control of the Company, which may cause the Company’s actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors, among other things, include regulatory or political change such as changes in applicable laws and regulations; the ability to obtain and maintain required licenses; the esports and sports betting industry being a heavily regulated industry; the complex and evolving regulatory environment for the online gaming and online gambling industry; the success of esports and other betting products are not guaranteed; changes in public perception of the esports and online gambling industry; failure to retain or add customers; the Company having a limited operating history; negative cash flow from operations; operational risks; cybersecurity risks; reliance on management; reliance on third parties and third-party networks; exchange rate risks; risks related to cryptocurrency transactions; risk of intellectual property infringement or invalid claims; the effect of capital market conditions and other factors on capital availability; competition, including from more established or better financed competitors; and general economic, market and business conditions. For additional risks, please see Q3 2024 MD&A under the heading “Risk Factors”, and other disclosure documents available on the Company’s SEDAR+ profile at sedarplus.ca.
No assurance can be given that the expectations reflected in forward-looking statements will prove to be correct. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.
Financial Outlook
This news release contains a financial outlook within the meaning of applicable Canadian securities laws. The financial outlook has been prepared by management of the Company to provide an outlook for revenue derived from Rivalry’s native token NUTZ and expected to be realized upon the launch of NUTZ, and may not be appropriate for any other purpose. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed under the heading “Cautionary Note Regarding Forward-Looking Information and Statements”. The actual results of the Company’s operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis. However, because this information is highly subjective and subject to numerous risks, including the risks discussed under the heading “Cautionary Note Regarding Forward-Looking Information and Statements”, it should not be relied on as necessarily indicative of future results.
This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any applicable state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration requirements is available.
Source: Rivalry Corp.
SharpLink Gaming, Inc. (Nasdaq: SBET) (“SharpLink” or the “Company”), an online performance-based marketing company serving the U.S. sports betting and iGaming industries, today announced its financial results for the three and nine months ended September 30, 2024.
Financial Highlights
- Revenues decreased 27.7% to $2,838,908 for the first nine months of 2024, compared to $3,925,618 for the same nine-month period in 2023. For the three months ended September 30, 2024 and 2023, revenues declined 34.7% to $881,690 compared to $1,349,331, respectively.
- Total operating expenses declined 25.9% to $4,426,835 from $5,977,327 for the nine months ended September 30, 2024 and 2023, respectively; and total operating expenses dropped 46.0% to $970,080 from $1,795,057 for the three months ended September 30, 2024 and 2023, respectively.
- For the nine months ended September 30, 2024, net income climbed to $11,002,266 after factoring net income from discontinued operations of $14,567,733 – up 673.3% from a net loss of $9,114,443 inclusive of the net loss from discontinued operations of $2,523,754 posted for the comparable nine months in the prior year. After factoring a net loss from discontinued operations of $97,139, the net loss for the three months ended September 30, 2024 decreased 68.9% to $885,131 when compared to a net loss of $2,849,547 for the same three months ended September 30, 2023 after factoring a net loss from discontinued operations of $822,100.
- As of September 30, 2024, cash on hand was $1,850,206 and total stockholders’ equity was $2,020,143. This compared to $2,487,481 cash on hand and total stockholders’ deficit of $9,399,769 as of December 31, 2023.
Commenting on the results, SharpLink Chairman and CEO Rob Phythian said, “The notable decline in operating expenses reflects SharpLink’s continued focus on streamlining our affiliate marketing business; and the significant improvement in our bottom line results is largely a result of our $22.5 million cash sale of our SportsHub fantasy sports and sports game development businesses to RSports Interactive, Inc. earlier this year. Since that time, we have succeeded at scouring our balance sheet, eliminating virtually all of our debt, and have turned our attention to identifying, qualifying and pursuing compelling strategic growth opportunities that we believe can best be leveraged to create and enhance long-term sustainable value for our shareholders. As we progress through to the end of the year, we look forward to sharing much greater insight into our future plans for SharpLink resulting from the collective due diligence efforts of our leadership team and our highly engaged Board of Directors.”
For more detailed information about SharpLink’s Third Quarter 2024 financial results, please refer to the Company’s Quarterly Report on Form 10-Q filed yesterday with the U.S. Securities and Exchange Commission and accessible online at sec.gov or via SharpLink’s investor relations page at investors.sharplink.com/
About SharpLink Gaming, Inc.
Headquartered in Minneapolis, Minnesota, SharpLink is a trusted marketing partner to leading sportsbooks and online casino gaming operators worldwide. Through its iGaming affiliate marketing network, known as PAS.net, SharpLink focuses on driving qualified traffic and player acquisitions, retention and conversions to U.S. regulated and global iGaming operator partners worldwide. In fact, PAS.net won industry recognition as the European online gambling industry’s Top Affiliate Website and Top Affiliate Program for four consecutive years by both igamingbusiness.com and igamingaffiliate.com. SharpLink also owns and operates a portfolio of direct-to-player, state-specific, affiliate marketing websites designed to attract, acquire and drive local sports betting and online casino gaming traffic to its valued partners which are licensed to operate in each respective state. For more information, please visit sharplink.com.
Forward-Looking Statements
This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding the Company’s ability to grow its business through strategic growth opportunities, the potential benefits of the Company’s products, services and technologies and other statements that are not historical facts, including statements which may be accompanied by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including without limitation, the Company’s ability to achieve profitable operations, government regulation of online betting, customer acceptance of new products and services, the demand for its products and its customers’ economic condition, the impact of competitive products and pricing, the lengthy sales cycle, proprietary rights of the Company and its competitors, general economic conditions and other risk factors detailed in the Company’s annual report and other filings with the SEC. The Company does not undertake any responsibility to update the forward-looking statements in this release.
CONTACT INFORMATION:
INVESTOR AND MEDIA RELATIONS
[email protected]
EveryMatrix Press Releases
EveryMatrix extends position as fastest growing iGaming supplier with twin 2024 acquisitions
EveryMatrix’s rapid growth trajectory continued in Q3 2024 yet again setting record net revenue and delivering a sixth consecutive profit margin of more than 50%, boosted by two major casino and sports acquisitions in the last five months.
The global tier-1 business, that has seen headcount rise 31% Year-on-Year (YoY) to 1,188 following two all-cash acquisitions of FSB Technology in June and, post period, Fantasma Games in October, confirmed its status as the fastest growing iGaming technology supplier with another set of stellar financial results.
Unveiling Q3 2024 results EveryMatrix set a record high quarterly net revenue of €45 million across all products, up 66% YoY, while recording an EBITDA margin of 52%. Q3 EBITDA stood at €23m, up 71% YoY.
The sixth consecutive 50%+ quarterly profit margin was driven by new customer launches, continued growth in its core sports and casino business units and further bolstered by strong sports trading margins.
FUTUREPROOFING THE GROUP WITH VALUE-ADDING ACQUISITIONS
The EveryMatrix Group significantly bolstered future success, further market penetration and a strong pipeline of new customers with two value-adding acquisitions: FSB Technology and Fantasma Games.
FSB Technology has added approximately 15% additional Gross Gaming Revenue (GGR) to the Group’s sportsbook business unit volumes with customer migration on schedule. This includes UK operator BetGoodwin that agreed a multi-year deal to expand its use of EveryMatrix’s turnkey sports and casino technology.
The acquisition has also strengthened key areas of the business, including the OddsMatrix sportsbook, by doubling the trading and quants team to enhance personalisation within managed odds and risk services.
Fantasma Games, one of the fastest growing young casino studios in the industry, was added to the Group in October. The integration of the Fantasma Games team will bring strong commercial, technical, and creative skills.
EveryMatrix customers will benefit significantly with the immediate addition of well-known titles that are already live with more than 250 operators and played by millions of players across 50+ countries.
Fantasma Games’ market distribution will also boost EveryMatrix’s presence in rapidly growing markets such as North America where the industry’s fastest growing technology provider has ambitious plans to build on its established partnerships with tier-1 brands.
CORE BUSINESS UNITS EXPERIENCE ACCELERATED GROWTH
Q3 2024 GGR for operator partners within the Casino business unit generated a twelfth consecutive record quarterly performance of €709m, up 53% YoY with GGR for the last 12 months at €2.6 billion, a 63% YoY increase.
Quarterly casino net revenue improved to €23.8m, up 78% YoY while EBITDA reached €14.9m reflecting a 95% YoY increase. The SlotMatrix aggregation product introduced a total of 970 unique game titles and integrated 10 new vendors bringing the total to more than 170, well above any other aggregator worldwide.
OddsMatrix quarterly sportsbook turnover climbed to 87% YoY to €1.5bn and €5.3bn for the last 12 months reflecting a 60% YoY increase, while last 12 months GGR rose by 158% YoY to €361.9m. Net revenue for the quarter reached €11.7m, up 85% YoY, while EBITDA reached €6m, reflecting a 117% YoY increase.
OddsMatrix hit a record number of live events with 530k in Q3, up 14% YoY. The total number of bets placed in Q3 reached 132m, reflecting a 225% increase YOY.
Platform saw third quarter net revenue rise 30% YoY to €8.1m, with EBITDA at €2.8m. GamMatrix, the EveryMatrix Player Account Management (PAM) system, processed 400k bets per minute during peak hours, up 18% QoQ, while also going live in Peru. The number of successful payment transactions reached €4.4bn in Q3, a 91% YoY increase.
The Affiliate division, including PartnerMatrix and PartnerMatrix Intelligence, launched a new website combining affiliate software and affiliate intelligence products under one proposition. The business unit reached 82 active clients, an 11% QoQ increase and saw net revenue reach €1.4m in Q3 2024, up 13% YoY. EBITDA decreased -€0.25m due to continued product and commercial investment.
Ebbe Groes, Group CEO of EveryMatrix, said: “The last few months have been some of the busiest since we founded the company 16 years ago; continuing to drive record GGR for our customers, launching more tier-1 operators and making two significant acquisitions that have instantly added value to the wider Group and that will futureproof both our sports and games divisions.
“As a result of these deals we expect to see even more growth and profitability as we migrate more FSB customers to our technologies and our Games division accelerates production and distribution to become a significant global studio.
“We are the clear frontrunner when it comes to being the fastest growing iGaming supplier.”
Q3 2024 HIGHLIGHTS
- Integration of FSB Technology into wider Group, double trading team and migration of customers to EveryMatrix technology
- Won Tier 1 operator in Africa, Mbet, on the back of the FSB acquisition (post period)
- Acquisition of Fantasma Games to futureproof Games business unit. This includes two new offices in Stockholm, Sweden and Sofia, Bulgaria, bringing the Group’s office total to 15 worldwide (post-period)
- Pinnacle, tier-1 operator, live with EveryMatrix casino platform technology
- GamMatrix live in Peru with all certifications
- PartnerMatrix and PartnerMatrix Intelligence launch new website to create an all-in-one affiliate management and data tracking proposition
- Launch of LoyaltyEngine, advanced loyalty module where players earn XP, level up, and earn coins that can be spent in a Loyalty Shop
- Winner of the Multi-channel Supplier of the Year at SBC Awards and Starlet Awards
- Kevin Furlong promoted to Group Chief Product Officer with responsibility for product strategy across all business units
- Launch of ‘Academy for Heroes’, second EveryMatrix funded NGO. Designed to help veterans of the Ukraine conflict develop careers in IT
Financial reports
Sportradar Reports Third Quarter 2024 Financial Results and Further Raises Full Year 2024 Outlook
Third Quarter 2024 Highlights
- Revenue increased 27% to €255 million
- Profit for the period increased €33 million to €37 million and expanded to 14.5% as a percentage of revenue
- Adjusted EBITDA1 increased 30% to €66 million and Adjusted EBITDA margin1 expanded to 25.8%
- Net cash generated from operating activities increased 55% to €118 million and Free cash flow1 increased 192% to €62 million
- Customer Net Retention Rate1 increased to 126%
- Repurchased $8.3 million of shares
- Further raised full year guidance to revenue growth of at least 24% to €1,090 million and Adjusted EBITDA growth of at least 29% to €216 million
ST. GALLEN, Switzerland, Nov. 07, 2024 (GLOBE NEWSWIRE) — Sportradar Group AG (NASDAQ: SRAD) (“Sportradar” or the “Company”), a leading global sports technology company focused on creating immersive experiences for sports fans and bettors, today announced financial results for its third quarter ended September 30, 2024.
Carsten Koerl, Chief Executive Officer of Sportradar, said: “Our competitive advantages within the sports ecosystem, coupled with our growth-oriented strategy, is driving broad-based outperformance. We continue to deliver more value to our clients and partners, building shareholder value. We are at an important inflection point to drive operational leverage and cash generation, demonstrated by our expanding EBITDA margin and strong cash flow this past quarter. The significant cash flow has further strengthened our balance sheet and we are deploying our capital to execute on our growth strategy while returning capital to shareholders. Additionally, we continue to show strong momentum in the US, which we expect to be further bolstered by the growth of in-game betting and with the start of the NBA and NHL seasons.”
THIRD QUARTER AND YEAR TO DATE FINANCIAL RESULTS
Revenue
| Three-Month Period Ended September 30, |
Nine-Month Period Ended September 30, |
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| in € thousands (unaudited) | 2024 | 2023 | Change | % | 2024 | 2023 | Change | % | ||||||||||
| Revenue by product | ||||||||||||||||||
| Betting & Gaming Content | 162,769 | 118,994 | 43,775 | 37 | % | 515,337 | 382,352 | 132,985 | 35 | % | ||||||||
| Managed Betting Services | 47,295 | 40,190 | 7,105 | 18 | % | 144,726 | 117,521 | 27,205 | 23 | % | ||||||||
| Betting Technology & Solutions | 210,064 | 159,184 | 50,880 | 32 | % | 660,063 | 499,873 | 160,190 | 32 | % | ||||||||
| Marketing & Media Services | 32,944 | 30,080 | 2,864 | 10 | % | 102,637 | 90,185 | 12,452 | 14 | % | ||||||||
| Sports Performance | 10,116 | 9,949 | 167 | 2 | % | 29,314 | 29,150 | 164 | 1 | % | ||||||||
| Integrity Services | 2,048 | 1,824 | 224 | 12 | % | 7,472 | 5,827 | 1,645 | 28 | % | ||||||||
| Sports Content, Technology & Services | 45,108 | 41,853 | 3,255 | 8 | % | 139,423 | 125,162 | 14,261 | 11 | % | ||||||||
| Total Revenue | 255,172 | 201,037 | 54,135 | 27 | % | 799,486 | 625,035 | 174,451 | 28 | % | ||||||||
| Revenue by geography | ||||||||||||||||||
| Rest of World | 204,076 | 165,960 | 38,116 | 23 | % | 622,340 | 512,263 | 110,077 | 21 | % | ||||||||
| United States | 51,096 | 35,077 | 16,019 | 46 | % | 177,146 | 112,772 | 64,374 | 57 | % | ||||||||
| Total Revenue | 255,172 | 201,037 | 799,486 | 625,035 | ||||||||||||||
Total revenue for the third quarter was €255 million, up €54 million, or 27% year-over-year driven by 32% growth in Betting Technology & Solutions and 8% growth in Sports Content, Technology & Services.
Betting Technology & Solutions revenues of €210 million were up 32% year-over-year primarily driven by a 37% increase in Betting & Gaming Content benefiting from existing and new customer uptake of our products and premium pricing, as well as from the strong U.S. market growth. Additionally, Managed Betting Services grew 18% year-over-year, primarily driven by strong growth in Managed Trading Services from higher trading margins and increased betting activity from existing and new customers.
Sports Content, Technology & Services revenues of €45 million, increased 8% year-over-year primarily driven by 10% growth in Marketing & Media Services with strong growth in both European and North America ad:s revenue as several sportsbooks launched marketing campaigns.
The Company generated strong revenue growth globally with Rest of World up 23% and the United States up 46%. As a percentage of total Company revenues, United States revenue represented 20% of total Company revenue in the third quarter as compared to 17% in the prior year quarter due to market growth, additional customer uptake of our products and premium pricing.
Customer Net Retention Rate of 126% increased sequentially and from the prior year quarter demonstrating the strength in cross selling and upselling to clients most notably due to the new ATP rights deal and market growth in the United States.
Profit for the period from continuing operations
Profit for the period from continuing operations in the third quarter was €37 million, up €32 million, compared to €5 million in the same quarter a year ago. The increase was primarily driven by the strong operating results as well as €21 million in net foreign currency gains due to strengthening of the Euro against the U.S. dollar and €15 million of prior year one-time losses related to impairment on goodwill and intangible assets related to the impact of changes related to our business strategy and disposal of an equity-accounted investee. These increases were partially offset by higher financing costs of €14 million driven by the new ATP, NBA, and Bundesliga partnership deals.
Adjusted EBITDA
Third quarter Adjusted EBITDA was €66 million, up €15 million, compared to €50 million in the same quarter a year ago. The increase was primarily driven by the 27% revenue growth, partially offset by increased sport rights costs primarily related to the ATP partnership deal, higher purchased services driven by investments in developing our product portfolio, increased personnel expenses due to headcount growth and a higher bonus accrual in the current year.
Additional Business Highlights
- In conjunction with our partnership with the NBA, Sportradar has launched a suite of next generation products and solutions for the 2024 – 2025 season. Leveraging products such as 4Sight Streaming, emBET, Live Match Tracker and advanced visualizations, Sportradar can harness hundreds of thousands of data points per game to redefine the standards of fan engagement.
- Sportradar introduced micro markets for ATP tennis matches in collaboration with Tennis Data Innovations, expanding this cutting-edge product to tennis from other popular sports such as soccer and table tennis. The eight distinct micro markets are expected to generate approximately 1,500 new betting opportunities per match, opening fresh revenue streams for operators.
- Sportradar added paid search to its ad:s marketing service, allowing operators to more effectively reach and acquire customers searching betting and gaming-related topics online.
- Sportradar received several industry awards, including the Best Live Betting Product at SBC Summit 2024. In addition, Sportradar was recognized in two prestigious categories at the 2024 American Gambling Awards, winning Betting Product of the Year for its 4Sight technology and the Data Service Provider of the Year.
Balance Sheet and Liquidity
The Company’s cash and cash equivalents were €368 million as of September 30, 2024 as compared with €277 million as of December 31, 2023. The increase was primarily driven by net cash generated from operating activities of €271 million due to the strong operating performance, partially offset by net cash used in investing activities of €152 million, primarily from the acquisition of additional sports rights, most notably our new NBA and ATP deals, and from net cash used in financing activities of €26 million, due primarily to share repurchases. Free cash flow for the nine-months ended September 30, 2024 was €122 million, an increase of €71 million from the €51 million in the same period a year ago.
Including the undrawn credit facility, the Company had total liquidity of €588 million at September 30, 2024 as compared to €510 million as of September 30, 2023, and no debt outstanding.
2024 Annual Financial Outlook
Sportradar is further raising its fiscal 2024 outlook for revenue and Adjusted EBITDA as follows:
- Revenue of at least €1,090 million, up 24% year-over-year, compared with prior outlook of €1,070 million.
- Adjusted EBITDA of at least €216 million, up 29% year-over-year, compared with prior outlook of €204 million.
- Adjusted EBITDA margin of approximately 20%.
Share Repurchase Program
In March of this year the Board of Directors approved a $200 million share repurchase program and commenced purchases during the second quarter. During the current quarter, the Company repurchased approximately 721,000 shares for a total of $8.3 million. Year to date through November 1, 2024, the Company has repurchased 1.7 million shares under the plan for a total of approximately $20 million.
Conference Call and Webcast Information
Sportradar will host a conference call to discuss the third quarter 2024 results today, November 7, 2024, at 8:00 a.m. Eastern Time. Those wishing to participate via webcast should access the earnings call through Sportradar’s Investor Relations website. An archived webcast with the accompanying slides will be available at the Company’s Investor Relations website for one year after the conclusion of the live event.
About Sportradar
Sportradar Group AG (NASDAQ: SRAD), founded in 2001, is a leading global sports technology company creating immersive experiences for sports fans and bettors. Positioned at the intersection of the sports, media and betting industries, the Company provides sports federations, news media, consumer platforms and sports betting operators with a best-in-class range of solutions to help grow their business. As the trusted partner of organizations like the ATP, NBA, NHL, MLB, NASCAR, UEFA, FIFA, and Bundesliga, Sportradar covers close to a million events annually across all major sports. With deep industry relationships and expertise, Sportradar is not just redefining the sports fan experience, it also safeguards sports through its Integrity Services division and advocacy for an integrity-driven environment for all involved.
For more information about Sportradar, please visit sportradar.com
_______________________________________________________________________
1 Non-IFRS measure. See the sections captioned “Non-IFRS Financial Measures and Operating Metric” and “IFRS to Non-IFRS reconciliations” for more details.
CONTACT:
Investor Relations:
Jim Bombassei
[email protected]
Media:
Sandra Lee
[email protected]
Non-IFRS Financial Measures and Operating Metric
We have provided in this press release financial information that has not been prepared in accordance with IFRS, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted purchased services, Adjusted personnel expenses, Adjusted other operating expenses, and Free cash flow, as well as our operating metric, Customer Net Retention Rate. We use these non-IFRS financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to IFRS measures, in evaluating our ongoing operational performance. We believe that the use of these non-IFRS financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-IFRS financial measures to investors.
Non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. Investors are encouraged to review the reconciliation of these non-IFRS financial measures to their most directly comparable IFRS financial measures provided in the financial statement tables included below in this press release.
- “Adjusted EBITDA” represents earnings for the period from continuing operations adjusted for finance income and finance costs, income tax expense or benefit, depreciation and amortization (excluding amortization of capitalized sport rights licenses), foreign currency gains or losses, and other items that are non-recurring or not related to the Company’s revenue-generating operations, including share-based compensation, impairment charges or income, management restructuring costs, non-routine litigation costs, losses related to equity-accounted investee (SportTech AG), and professional fees for the Sarbanes-Oxley Act of 2002 and enterprise resource planning implementations.
License fees relating to sport rights are a key component of how we generate revenue and one of our main operating expenses. Only licenses that meet the recognition criteria of IAS 38 are capitalized. The primary distinction for whether a license is capitalized or not capitalized is the contracted length of the applicable license. Therefore, the type of license we enter into can have a significant impact on our results of operations depending on whether we are able to capitalize the relevant license. As such, our presentation of Adjusted EBITDA reflects the full costs of our sport right’s licenses. Management believes that, by including amortization of sport rights in its calculation of Adjusted EBITDA, the result is a financial metric that is both more meaningful and comparable for management and our investors while also being more indicative of our ongoing operating performance.
We present Adjusted EBITDA because management believes that some items excluded are non-recurring in nature and this information is relevant in evaluating the results relative to other entities that operate in the same industry. Management believes Adjusted EBITDA is useful to investors for evaluating Sportradar’s operating performance against competitors, which commonly disclose similar performance measures. However, Sportradar’s calculation of Adjusted EBITDA may not be comparable to other similarly titled performance measures of other companies. Adjusted EBITDA is not intended to be a substitute for any IFRS financial measure.
Items excluded from Adjusted EBITDA include significant components in understanding and assessing financial performance. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation, or as an alternative to, or a substitute for, profit for the period, revenue or other financial statement data presented in our consolidated financial statements as indicators of financial performance. We compensate for these limitations by relying primarily on our IFRS results and using Adjusted EBITDA only as a supplemental measure.
- “Adjusted EBITDA margin” is the ratio of Adjusted EBITDA to revenue.
The Company is unable to provide a reconciliation of Adjusted EBITDA guidance to profit (loss) for the period, its most directly comparable IFRS financial measure, on a forward-looking basis without unreasonable effort because items that impact this IFRS financial measure are not within the Company’s control and/or cannot be reasonably predicted. These items may include but are not limited to foreign exchange gains and losses. Such information may have a significant, and potentially unpredictable, impact on the Company’s future financial results.
We present Adjusted purchased services, Adjusted personnel expenses, and Adjusted other operating expenses (“Non-IFRS expenses”) because management utilizes these financial measures to manage its business on a day-to-day basis and believes that they are the most relevant measures of expenses. Management believes these adjusted expense measures provide expanded insight to assess revenue and cost performance, in addition to the standard IFRS-based financial measures. Management believes these adjusted expense measures are useful to investors for evaluating Sportradar’s operating performance against competitors. However, Sportradar’s calculation of adjusted expense measures may not be comparable to other similarly titled performance measures of other companies. These adjusted expense measures are not intended to be a substitute for any IFRS financial measure.
- “Adjusted purchased services” represents purchased services less capitalized external development costs.
- “Adjusted personnel expenses” represents personnel expenses less share-based compensation awarded to employees, management restructuring costs, and capitalized personnel compensation.
- “Adjusted other operating expenses” represents other operating expenses plus impairment loss on trade receivables, less non-routine litigation, share-based compensation awarded to third parties, and certain professional fees.
We consider Free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchase of property and equipment, the purchase of intangible assets and payment of lease liabilities, which can then be used, among other things, to invest in our business and make strategic acquisitions. A limitation of the utility of Free cash flow as a measure of liquidity is that it does not represent the total increase or decrease in our cash balance for the year.
- “Free cash flow” represents net cash from operating activities adjusted for payments for lease liabilities, acquisition of property and equipment, and acquisition of intangible assets.
In addition, we define the following operating metric as follows:
- “Customer Net Retention Rate” is calculated for a given period by starting with the reported Trailing Twelve Month revenue from our top 200 customers as of twelve months prior to such period end, or prior period revenue. We then calculate the reported trailing twelve-month revenue from the same customer cohort as of the current period end, or current period revenue. Current period revenue includes any upsells and is net of contraction and attrition over the trailing twelve months but excludes revenue from new customers in the current period. We then divide the total current period revenue by the total prior period revenue to arrive at our Net Retention Rate.
Safe Harbor for Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking” statements and information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events, including, without limitation, statements regarding future financial or operating performance, planned activities and objectives, anticipated growth resulting therefrom, market opportunities, strategies and other expectations, and our guidance and outlook, including expected performance for the full year 2024. In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “projects”, “continue,” “contemplate,” “confident,” “possible” or similar words. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the following: economy downturns and political and market conditions beyond our control, including the impact of the Russia/Ukraine and other military conflicts and foreign exchange rate fluctuations; pandemics, such as the global COVID-19 pandemic, could have an adverse effect on our business; dependence on our strategic relationships with our sports league partners; effect of social responsibility concerns and public opinion on responsible gaming requirements on our reputation; potential adverse changes in public and consumer tastes and preferences and industry trends; potential changes in competitive landscape, including new market entrants or disintermediation; potential inability to anticipate and adopt new technology; potential errors, failures or bugs in our products; inability to protect our systems and data from continually evolving cybersecurity risks, security breaches or other technological risks; potential interruptions and failures in our systems or infrastructure; our ability to comply with governmental laws, rules, regulations, and other legal obligations, related to data privacy, protection and security; ability to comply with the variety of unsettled and developing U.S. and foreign laws on sports betting; dependence on jurisdictions with uncertain regulatory frameworks for our revenue; changes in the legal and regulatory status of real money gambling and betting legislation on us and our customers; our inability to maintain or obtain regulatory compliance in the jurisdictions in which we conduct our business; our ability to obtain, maintain, protect, enforce and defend our intellectual property rights; our ability to obtain and maintain sufficient data rights from major sports leagues, including exclusive rights; any material weaknesses identified in our internal control over financial reporting; inability to secure additional financing in a timely manner, or at all, to meet our long-term future capital needs; risks related to future acquisitions; and other risk factors set forth in the section titled “Risk Factors” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, and other documents filed with or furnished to the SEC, accessible on the SEC’s website at sec.gov and on our website at investors.sportradar.com. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this press release. One should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
SPORTRADAR GROUP AG
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
(Unaudited)
| Three-Month Period Ended | Nine-Month Period Ended | |||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||
| in €’000 and in thousands of shares | (restated) | (restated) | ||||||||||
| Continuing operations | ||||||||||||
| Revenue | 255,172 | 201,037 | 799,486 | 625,035 | ||||||||
| Personnel expenses | (87,966 | ) | (75,359 | ) | (256,668 | ) | (237,223 | ) | ||||
| Sport rights expenses (including amortization of capitalized sport rights licenses) | (63,002 | ) | (35,544 | ) | (249,861 | ) | (139,077 | ) | ||||
| Purchased services | (42,770 | ) | (36,088 | ) | (125,565 | ) | (103,650 | ) | ||||
| Other operating expenses | (23,391 | ) | (22,817 | ) | (67,388 | ) | (65,000 | ) | ||||
| Impairment gain (loss) on trade receivables, contract assets and other financial assets | 397 | (626 | ) | (3,473 | ) | (4,527 | ) | |||||
| Internally-developed software cost capitalized | 13,269 | 8,415 | 36,186 | 19,665 | ||||||||
| Depreciation and amortization (excluding amortization of capitalized sport rights licenses) | (12,970 | ) | (11,812 | ) | (37,600 | ) | (33,465 | ) | ||||
| Share of loss of equity-accounted investee | — | — | — | (3,699 | ) | |||||||
| Loss on disposal of equity-accounted investee | — | (5,600 | ) | — | (13,618 | ) | ||||||
| Impairment loss on goodwill and intangible assets | — | (9,854 | ) | — | (9,854 | ) | ||||||
| Foreign currency gain (loss), net | 22,380 | 1,187 | 88 | (3,714 | ) | |||||||
| Finance income | 2,738 | 3,179 | 6,687 | 9,781 | ||||||||
| Finance costs | (19,969 | ) | (5,554 | ) | (57,986 | ) | (17,672 | ) | ||||
| Net income before tax from continuing operations | 43,888 | 10,564 | 43,906 | 22,982 | ||||||||
| Income tax expense | (6,786 | ) | (5,949 | ) | (8,988 | ) | (11,524 | ) | ||||
| Profit for the period from continuing operations | 37,102 | 4,615 | 34,918 | 11,458 | ||||||||
| Discontinued operations | ||||||||||||
| Loss from discontinued operations | — | (495 | ) | — | (451 | ) | ||||||
| Profit for the period | 37,102 | 4,120 | 34,918 | 11,007 | ||||||||
| Other comprehensive income | ||||||||||||
| Items that will not be reclassified subsequently to profit or (loss) | ||||||||||||
| Remeasurement of defined benefit liability | — | 1 | (2 | ) | (88 | ) | ||||||
| Related deferred tax expense (benefit) | — | — | (2 | ) | 11 | |||||||
| — | 1 | (4 | ) | (77 | ) | |||||||
| Items that may be reclassified subsequently to profit or (loss) | ||||||||||||
| Foreign currency translation adjustment attributable to the owners of the company | (4,163 | ) | 3,420 | 2,321 | 3,062 | |||||||
| Foreign currency translation adjustment attributable to non-controlling interests | (3 | ) | (25 | ) | (5 | ) | (17 | ) | ||||
| (4,166 | ) | 3,395 | 2,316 | 3,045 | ||||||||
| Other comprehensive (loss) income for the period, net of tax | (4,166 | ) | 3,396 | 2,312 | 2,968 | |||||||
| Total comprehensive income for the period | 32,936 | 7,516 | 37,230 | 13,975 | ||||||||
| Profit (loss) attributable to: | ||||||||||||
| Owners of the Company | 37,261 | 4,335 | 35,239 | 11,246 | ||||||||
| Non-controlling interests | (159 | ) | (215 | ) | (321 | ) | (239 | ) | ||||
| 37,102 | 4,120 | 34,918 | 11,007 | |||||||||
| Total comprehensive income (loss) attributable to: | ||||||||||||
| Owners of the Company | 33,098 | 7,756 | 37,556 | 14,230 | ||||||||
| Non-controlling interests | (162 | ) | (240 | ) | (326 | ) | (255 | ) | ||||
| 32,936 | 7,516 | 37,230 | 13,975 | |||||||||
| Profit per Class A share attributable to owners of the Company | ||||||||||||
| Basic | 0.12 | 0.02 | 0.12 | 0.04 | ||||||||
| Diluted | 0.11 | 0.01 | 0.11 | 0.04 | ||||||||
| Profit per Class B share attributable to owners of the Company | ||||||||||||
| Basic | 0.01 | 0.00 | 0.01 | 0.00 | ||||||||
| Diluted | 0.01 | 0.00 | 0.01 | 0.00 | ||||||||
| Weighted-average number of shares | ||||||||||||
| Weighted-average number of Class A shares (basic) | 210,467 | 207,600 | 210,202 | 207,283 | ||||||||
| Weighted-average number of Class A shares (diluted) | 227,805 | 220,834 | 226,284 | 219,676 | ||||||||
| Weighted-average number of Class B shares (basic and diluted) | 903,671 | 903,671 | 903,671 | 903,671 | ||||||||
SPORTRADAR GROUP AG
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
| in €’000 | September 30, 2024 |
December 31, 2023 |
||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | 368,379 | 277,174 | ||||
| Trade receivables | 66,240 | 71,246 | ||||
| Contract assets | 94,950 | 60,869 | ||||
| Other assets and prepayments | 27,189 | 33,252 | ||||
| Income tax receivables | 6,470 | 6,527 | ||||
| Total current assets | 563,228 | 449,068 | ||||
| Non-current assets | ||||||
| Property and equipment | 66,273 | 72,762 | ||||
| Intangible assets and goodwill | 1,618,722 | 1,697,331 | ||||
| Other financial assets and other non-current assets | 11,491 | 11,806 | ||||
| Deferred tax assets | 17,566 | 16,383 | ||||
| Total non-current assets | 1,714,052 | 1,798,282 | ||||
| Total assets | 2,277,280 | 2,247,350 | ||||
| Liabilities and equity | ||||||
| Current liabilities | ||||||
| Loans and borrowings | 10,050 | 9,586 | ||||
| Trade payables | 246,887 | 259,667 | ||||
| Other liabilities | 60,703 | 55,724 | ||||
| Contract liabilities | 42,594 | 26,595 | ||||
| Income tax liabilities | 8,978 | 4,542 | ||||
| Total current liabilities | 369,212 | 356,114 | ||||
| Non-current liabilities | ||||||
| Loans and borrowings | 37,174 | 40,559 | ||||
| Trade payables | 892,966 | 908,499 | ||||
| Contract liabilities | 41,196 | 39,526 | ||||
| Other non-current liabilities | 1,419 | 8,500 | ||||
| Deferred tax liabilities | 19,081 | 21,315 | ||||
| Total non-current liabilities | 991,836 | 1,018,399 | ||||
| Total liabilities | 1,361,048 | 1,374,513 | ||||
| Equity | ||||||
| Ordinary shares | 27,551 | 27,421 | ||||
| Treasury shares | (18,144 | ) | (2,322 | ) | ||
| Additional paid-in capital | 669,795 | 653,840 | ||||
| Retained earnings | 214,771 | 173,629 | ||||
| Other reserves | 17,542 | 15,226 | ||||
| Equity attributable to owners of the Company | 911,515 | 867,794 | ||||
| Non-controlling interest | 4,717 | 5,043 | ||||
| Total equity | 916,232 | 872,837 | ||||
| Total liabilities and equity | 2,277,280 | 2,247,350 | ||||
SPORTRADAR GROUP AG
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine-Month Period Ended | ||||||
| September 30, 2024 | September 30, 2023 | |||||
| in €’000 | (restated) | |||||
| OPERATING ACTIVITIES: | ||||||
| Profit for the period | 34,918 | 11,007 | ||||
| Adjustments to reconcile profit for the period to net cash provided by operating activities: | ||||||
| Income tax expense | 8,988 | 11,524 | ||||
| Interest income | (6,818 | ) | (5,573 | ) | ||
| Interest expense | 58,081 | 15,861 | ||||
| Foreign currency (gain) loss, net | (88 | ) | 3,714 | |||
| Depreciation and amortization (excluding amortization of capitalized sport rights licenses) | 37,600 | 33,465 | ||||
| Amortization of capitalized sport rights licenses | 166,603 | 97,330 | ||||
| Impairment losses on goodwill and intangible assets | — | 9,854 | ||||
| Equity-settled share-based payments | 26,052 | 31,107 | ||||
| Share of loss of equity-accounted investee | — | 3,699 | ||||
| Loss on disposal of equity-accounted investee | — | 13,618 | ||||
| Other | (8,048 | ) | 389 | |||
| Cash flow from operating activities before working capital changes, interest and income taxes | 317,288 | 225,995 | ||||
| Increase in trade receivables, contract assets, other assets and prepayments | (24,555 | ) | (1,212 | ) | ||
| Increase in trade and other payables, contract and other liabilities | 36,095 | 324 | ||||
| Changes in working capital | 11,540 | (888 | ) | |||
| Interest paid | (57,287 | ) | (15,009 | ) | ||
| Interest received | 6,823 | 5,566 | ||||
| Income taxes paid, net | (7,510 | ) | (9,216 | ) | ||
| Net cash from operating activities | 270,854 | 206,448 | ||||
| INVESTING ACTIVITIES: | ||||||
| Acquisition of intangible assets | (140,165 | ) | (145,085 | ) | ||
| Acquisition of property and equipment | (3,090 | ) | (5,638 | ) | ||
| Acquisition of subsidiaries, net of cash acquired | (8,240 | ) | (12,286 | ) | ||
| Acquisition of financial assets | — | (3,716 | ) | |||
| Proceeds from disposal of equity-accounted investee | — | 15,172 | ||||
| Change in loans receivable and deposits | (187 | ) | (952 | ) | ||
| Net cash used in investing activities | (151,682 | ) | (152,505 | ) | ||
| FINANCING ACTIVITIES: | ||||||
| Payment of lease liabilities | (5,898 | ) | (4,933 | ) | ||
| Purchase of treasury shares | (19,795 | ) | (7,101 | ) | ||
| Principal payments on bank debt | (150 | ) | (510 | ) | ||
| Change in bank overdrafts | (47 | ) | 17 | |||
| Net cash used in financing activities | (25,890 | ) | (12,527 | ) | ||
| Net increase in cash | 93,282 | 41,416 | ||||
| Cash and cash equivalents at beginning of period | 277,174 | 243,757 | ||||
| Effects of movements in exchange rates | (2,077 | ) | 4,528 | |||
| Cash and cash equivalents at end of period | 368,379 | 289,701 | ||||
Change in presentation related to sport rights expenses
During the third quarter, the Company has changed the presentation of expenses related to sport rights in its Statement of profit or loss and other comprehensive income. Previously, these expenses were split between ‘Purchased services and licenses (excluding depreciation and amortization)’, representing the portion of related sport rights expenses which were not eligible for capitalization and ‘Depreciation and amortization’, representing the portion of related sport rights expenses which were capitalized. However, starting this quarter, the expenses are combined and presented under a new line item titled ‘Sport rights expenses (including amortization of capitalized licenses)’.
The change in presentation intends to provide more relevant and reliable information to the users of our financial statements. This reclassification aligns the presentation of sport rights expenses with the nature of the costs and the way they are managed internally.
There is no change to the Company’s disclosures, measurement or recognition of non-capitalized costs and capitalized sport rights licenses in accordance with IAS 38 Intangible Assets reported in its Annual Report on Form 20-F for the year ended December 31, 2023.
The following table shows the reclassification of sport rights expenses (unaudited):
| Three-Month Period Ended September 30, 2023 |
Nine-Month Period Ended September 30, 2023 |
|||||||||||||||
| in €’000 | Previously reported | Reclassification1 | Restated | Previously reported | Reclassification1 | Restated | ||||||||||
| Purchased services and licenses (excluding depreciation and amortization) | (45,260 | ) | 9,172 | (36,088 | ) | (138,245 | ) | 34,595 | (103,650 | ) | ||||||
| Depreciation and amortization | (38,184 | ) | 26,372 | (11,812 | ) | (137,947 | ) | 104,482 | (33,465 | ) | ||||||
| Total sport rights expenses | 35,544 | 139,077 | ||||||||||||||
1 Approximately €1.2 million and €7.2 million of sport rights expenses has been reclassified from amortization to purchased services and licenses for the three-month and nine-month periods ended September 30, 2023 as previously reported in the Company’s Form 6-K dated November 1, 2023.
Additional disclosures related to sport rights expenses
The following table shows the composition of sport rights expenses (unaudited):
| Three-Month Period Ended | Nine-Month Period Ended | |||||||
| in €’000 | September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||
| Non-capitalized sport right expenses | 28,272 | 10,354 | 83,258 | 41,747 | ||||
| Amortization of capitalized sport rights | 34,730 | 25,190 | 166,603 | 97,330 | ||||
| Total sport rights expenses | 63,002 | 35,544 | 249,861 | 139,077 | ||||
IFRS to Non-IFRS Reconciliations
The following table reconciles Adjusted EBITDA to the most directly comparable IFRS financial performance measure, which is Profit for the period from continuing operations (unaudited):
| Three-Month Period Ended | Nine-Month Period Ended | |||||||||||
| in €’000 | September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||
| Profit for the period from continuing operations | 37,102 | 4,615 | 34,918 | 11,458 | ||||||||
| Finance income | (2,738 | ) | (3,179 | ) | (6,687 | ) | (9,781 | ) | ||||
| Finance costs | 19,969 | 5,554 | 57,986 | 17,672 | ||||||||
| Depreciation and amortization (excluding amortization of capitalized sport rights licenses) | 12,970 | 11,812 | 37,600 | 33,465 | ||||||||
| Foreign currency (gain) loss, net | (22,380 | ) | (1,187 | ) | (88 | ) | 3,714 | |||||
| Share-based compensation | 12,088 | 11,368 | 25,095 | 31,430 | ||||||||
| Management restructuring costs | — | — | 1,620 | — | ||||||||
| Non-routine litigation costs | 1,989 | — | 2,391 | — | ||||||||
| Share of loss of equity-accounted investee | — | — | — | 3,699 | ||||||||
| Loss on disposal of equity-accounted investee | — | 5,600 | — | 13,618 | ||||||||
| Impairment loss on goodwill and intangible assets | — | 9,854 | — | 9,854 | ||||||||
| Impairment loss on other financial assets | — | — | — | 202 | ||||||||
| Professional fees for SOX and ERP implementations | — | 100 | — | 404 | ||||||||
| Income tax expense | 6,786 | 5,949 | 8,988 | 11,524 | ||||||||
| Adjusted EBITDA | 65,786 | 50,486 | 161,823 | 127,259 | ||||||||
The most directly comparable IFRS measure of Adjusted EBITDA margin is Profit for the period from continuing operations as a percentage of revenue as disclosed below (unaudited):
| Three-Month Period Ended | Nine-Month Period Ended | |||||||||||
| in €’000 | September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||
| Profit for the period from continuing operations | 37,102 | 4,615 | 34,918 | 11,458 | ||||||||
| Revenue | 255,172 | 201,037 | 799,486 | 625,035 | ||||||||
| Profit for the period from continuing operations as a percentage of revenue | 14.5 | % | 2.3 | % | 4.4 | % | 1.8 | % | ||||
The most directly comparable IFRS measure of Free cash flow is Net cash from operating activities as disclosed below (unaudited):
| Three-Month Period Ended | Nine-Month Period Ended | |||||||||||
| in €’000 | September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||
| Net cash from operating activities | 118,222 | 76,248 | 270,854 | 206,448 | ||||||||
| Acquisition of intangible assets | (53,552 | ) | (50,878 | ) | (140,165 | ) | (145,085 | ) | ||||
| Acquisition of property plant and equipment | (717 | ) | (2,392 | ) | (3,090 | ) | (5,638 | ) | ||||
| Payment of lease liabilities | (1,741 | ) | (1,650 | ) | (5,898 | ) | (4,933 | ) | ||||
| Free cash flow | 62,212 | 21,328 | 121,701 | 50,792 | ||||||||
The following tables show reconciliations of IFRS expenses included in profit for the period from continuing operations to expenses included in Adjusted EBITDA (unaudited):
| Three-Month Period Ended | Nine-Month Period Ended | |||||||||||
| in €’000 | September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||
| Purchased services | 42,770 | 36,088 | 125,565 | 103,650 | ||||||||
| Less: capitalized external services | (6,490 | ) | (1,669 | ) | (15,758 | ) | (4,242 | ) | ||||
| Adjusted purchased services | 36,280 | 34,419 | 109,807 | 99,408 | ||||||||
| Personnel expenses | 87,966 | 75,359 | 256,668 | 237,223 | ||||||||
| Less: share-based compensation | (12,767 | ) | (11,107 | ) | (27,076 | ) | (30,661 | ) | ||||
| Less: management restructuring | — | — | (1,620 | ) | — | |||||||
| Less: capitalized personnel compensation | (5,865 | ) | (6,746 | ) | (17,741 | ) | (15,423 | ) | ||||
| Adjusted personnel expenses | 69,334 | 57,506 | 210,231 | 191,139 | ||||||||
| Other operating expenses | 23,391 | 22,817 | 67,388 | 65,000 | ||||||||
| Less: non-routine litigation | (1,989 | ) | — | (2,391 | ) | — | ||||||
| Less: share-based compensation | (237 | ) | (261 | ) | (706 | ) | (769 | ) | ||||
| Less: other | — | (100 | ) | — | (606 | ) | ||||||
| Add: impairment (gain) loss on trade receivables | (397 | ) | 626 | 3,473 | 4,527 | |||||||
| Adjusted other operating expenses | 20,768 | 23,082 | 67,764 | 68,152 | ||||||||
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