Genius Sports (US:GENI)2023-03-29 16:00Financial Performance - Revenue for the year ended December 31, 2022, was $341.0 million, an increase of $78.3 million or 30% compared to $262.7 million in 2021[379] - On a constant currency basis, revenue would have increased by $98.7 million or 41% for the year ended December 31, 2022[379] - Gross profit for 2022 was $2.9 million, a significant improvement of $216.3 million compared to a loss of $213.4 million in 2021[378] - Net loss for the year ended December 31, 2022, was $181.6 million, a reduction of $411.1 million from a net loss of $592.8 million in 2021[396] Cost Management - Cost of revenue decreased by $138.0 million to $338.2 million in 2022, primarily due to a $202.9 million decrease in stock-based compensation[383] - General and administrative expenses decreased by $170.3 million to $122.8 million in 2022, largely due to a reduction in stock-based compensation[388] - Sales and marketing expenses increased by $4.1 million to $31.3 million in 2022, driven by higher staff costs due to recent acquisitions[386] - Research and development expenses rose by $3.4 million to $29.9 million in 2022, reflecting investment in the Genius platform[387] Cash Flow and Investments - Net cash used in operating activities was $3.5 million in 2022, a significant improvement from $63.3 million in 2021, primarily due to a net loss of $21.8 million offset by changes in working capital of $18.4 million[403] - Net cash used in investing activities decreased to $54.8 million in 2022 from $132.3 million in 2021, reflecting costs related to internally developed software and intangible assets of $41.6 million[404] - Net cash used in financing activities was less than $0.1 million in 2022, a stark contrast to $410.4 million provided in 2021, which included $276.3 million cash acquired from a merger[405] - Genius' total cash flows from operating activities showed a notable reduction in cash outflow, indicating improved operational efficiency[403] Debt and Financing - Genius had $14.5 million in debt outstanding as of December 31, 2022, compared to $0.1 million in 2021[400] - Genius expects capital expenditure and working capital requirements to increase as it continues to expand its product offerings across the United States[398] - Genius' financing activities in 2021 included the issuance of 33 million ordinary shares, generating $316.8 million in proceeds[405] - The company successfully exercised and consented to the solicitation of outstanding public warrants, resulting in cash proceeds of $6.8 million from 6,834,991 warrants[529] Leadership and Governance - Genius Sports Group's Chief Financial Officer, Nicholas Taylor, has been with the company since December 2020 and previously served as CFO of Wagamama and Director of Operational Finance at Travelodge Hotels Limited[449] - Mark Locke, the Co-Founder and CEO, has been a member of the Board of Directors since April 2021 and has extensive experience in the sports data industry, having launched BetGenius in 2000[443] - David Levy, Chair of the Board since April 2021, has a strong background in sports media and marketing, previously serving as President of Turner Broadcasting System[434] - The company has a diverse board of directors with members having extensive experience in finance, technology, and the gaming industry, including Kenneth J. Kay and Gabriele Cipparrone[439][438] Compensation and Equity - Total compensation for Genius's executive officers in 2022 was $10,395,084, which includes base compensation of $2,533,150 and share-based awards valued at $6,625,821[451] - Compensation for Genius's Directors in 2022 amounted to $565,000, a decrease from $910,000 in 2021, with cash-based compensation of $165,000 and share-based compensation of $400,000[453] - Genius's executive officers held a total of 28,843,266 ordinary shares as of December 31, 2022, representing 14.0% of the total outstanding shares[460] - Genius issued awards in 2022 under the 2022 Omnibus Incentive Plan, including restricted stock units and performance stock units, which are subject to time and performance vesting conditions[471] Employee Relations and Workforce - The company has approximately 2,100 staff across 16 main locations and 6 continents, including over 1,600 employees and more than 500 contingent workers[488] - The company emphasizes the development of a ready pipeline of 'home-grown' management talent to support its growth strategy[489] - The company aims to attract, retain, and develop staff with the necessary skills and experience to implement its growth strategy[489] - The company has not experienced any work stoppages and considers its relations with employees to be good[491] Strategic Initiatives - The company is focused on expanding its market presence and enhancing its product offerings through strategic partnerships and technological advancements[444][448] - Genius' investment strategy in 2022 focused on software development and intangible assets, reflecting a commitment to innovation and market expansion[404] - The company plans to evaluate adopting a cash dividend policy, considering its financial condition and other factors[528] Legal and Regulatory Matters - The company entered into a settlement with BetConstruct, which includes a multi-year license for data supply, resolving their legal dispute[527] - The company maintains exclusive rights to provide low latency Official FDC betting data rights through 2024 as part of a settlement with Sportradar[524] - The company has established a nominating and corporate governance committee responsible for overseeing the selection of nominees for the Board and appointments of officers[480]