Sportradar AG(SRAD) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported record quarterly revenues of $318 million, an increase of $39 million or 14% year-over-year, driven by higher product uptake from existing clients and new client spending [20][21] - Adjusted EBITDA for the quarter was $64 million, increasing 31% year-over-year, with an adjusted EBITDA margin expanding approximately 250 basis points to 20.1% [24][28] - The company generated a profit of $49 million compared to a loss of $1.5 million in the same period last year, aided by an unrealized foreign currency gain of $54 million [28] Business Line Data and Key Metrics Changes - Betting technology and solutions revenue grew 12% year-over-year to $259 million, driven by a 10% increase in betting and gaming content [21] - Managed Betting Services revenue increased by 21% year-on-year, reflecting strong momentum in Managed Trading Services [22] - Sports content technology and services revenue rose 22% year-on-year to $59 million, with significant contributions from marketing and media services [22] Market Data and Key Metrics Changes - U.S. revenue grew by 30%, while revenue from the rest of the world increased by 9% in the second quarter [23] - The U.S. sports betting market has expanded significantly since legislation in 2018, growing from approximately $300 million in GGR to nearly $14 billion last year [9] Company Strategy and Development Direction - The company aims to capitalize on the rapid expansion of the global sports betting market, focusing on increasing product penetration and innovation [7][8] - Plans to expand into adjacent markets leveraging existing capabilities and expertise are underway, with a focus on enhancing client relationships [8][18] - The company is committed to investing in innovation and technology, including AI capabilities, to drive growth efficiently [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong operating momentum for the remainder of the year and raised the full-year revenue outlook to at least $1.278 billion, representing year-over-year growth of at least 16% [31][33] - The company anticipates adjusted EBITDA of at least €284 million, reflecting growth of at least 28% versus 2024 [31][33] - Management highlighted the importance of maintaining discipline in rights acquisitions and emphasized the strong growth potential in the U.S. and international markets [66][68] Other Important Information - The company is in the process of acquiring IMG Arena's portfolio, which is expected to enhance its content offerings in key sports [14][33] - The company has repurchased approximately $86 million of stock as part of its share repurchase program, indicating confidence in its growth prospects [30] Q&A Session Summary Question: Insights on the Club World Cup's impact on betting - Management noted that the World Cup was beneficial for Managed Trading Services, with increased interest from media companies driving traffic from betting [36][37] Question: Clarification on European league rights and IMG acquisition - Management confirmed that European league rights were not included in the IMG acquisition due to their loss-making nature and lack of audiovisual inventory [38][40] Question: Impact of new NTS customers on Managed Betting Services - Management indicated that the onboarding of 50 new clients in 2024 has significantly contributed to the strong growth in Managed Trading Services [43][44] Question: Trends in the advertising business and organic growth rates - Management explained that fluctuations in advertising growth are due to timing around media campaigns, with expectations for continued momentum in the back half of the year [50][52] Question: U.S. gaming market health and trends - Management expressed caution in predicting Q3 trends but noted strong growth and adaptation in the U.S. market [95][96] Question: Future market opportunities and potential new markets - Management highlighted Brazil's growth potential and mentioned ongoing developments in Japan, India, and Thailand as key markets to watch [108][109]