Sportradar AG(SRAD) - 2022 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the full year 2022, the company reported a 30% increase in revenue to €730 million and a 23% increase in adjusted EBITDA to €126 million, exceeding the top end of revenue guidance and solidly within the adjusted EBITDA guidance range [16][38] - In Q4 2022, revenue increased by 35% to €206 million, driven by strong growth across all segments, with adjusted EBITDA growing 64% [67] Business Line Data and Key Metrics Changes - The US segment, the highest growth area, saw revenue grow 77% in Q4 to €41 million, with betting business more than doubling and advertising business nearly tripling [17] - The Rest of the World betting revenue grew nearly 30% in Q4 to €106 million, primarily driven by Managed Betting Services (MBS) [20] - Managed Trading Services (MTS) saw record turnover, resulting in growth of 75% for Q4, significantly boosted by the FIFA World Cup [68] Market Data and Key Metrics Changes - The US segment achieved close to 80% revenue growth for the full year, with strong growth across betting, advertising, digital media, and sports solutions [42] - The company reported a net revenue retention rate of 119%, indicating strong customer loyalty and upselling opportunities [43] Company Strategy and Development Direction - The company aims to expand its leadership in core betting markets, grow into advertising media, and create innovative fan engagement experiences using AI and computer vision technology [62] - The company is focused on product innovation, including the first end-to-end AI-driven betting solution for Table Tennis, which was well-received at ICE 2023 [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's resilience and the potential for strong results in 2023, despite macroeconomic challenges [34] - For 2023, the company expects revenue growth of 24% to 26% and adjusted EBITDA in the range of €157 million to €167 million, with margin expansion anticipated [64][73] Other Important Information - The company ended 2022 with over €240 million in cash and total cash and undrawn credit facilities of €464 million, indicating strong liquidity [44] - Personnel costs increased significantly due to inflationary pressures and restructuring, impacting overall expenses [83] Q&A Session Summary Question: What is driving the strong growth in the Rest of the World betting business? - Management highlighted the increase in trading volume with existing customers and the enhancement of key products as primary growth drivers [76][78] Question: How is the computer vision technology being utilized? - The technology is focused on automating data capture and improving predictive models for betting, enhancing both efficiency and engagement [81] Question: What are the margin assumptions for the Rest of the World betting segment? - Management indicated that despite increased investments in technology, they expect to maintain strong margins in the segment [82][105] Question: What is the outlook for sports rights costs in 2023? - Management noted that sports rights costs are expected to decrease as a percentage of revenue, with the NBA deal impacting the fourth quarter [101][86]