Sportradar bolsters US muscle to match Nasdaq vision
Sportradar finished its first year and first full quarter as a US Nasdaq listed company citing a strong commercial performance, capitalising the growth of the US sports betting industry.
Updating investors in its Q4 and full-year 2021 trading report, the sports data and technology group revealed that its total revenue for the full year stood at €561.2 million, an increase of 39% on the previous year’s figure of €342.3 million.
Full year Adjusted EBITDA rose by 33% to €102.0 million (2020: €68.6m), as Q4 revenue stood at €152.4 million (2020: €62.4m) – an increase of 41% – with an Adjusted EBITDA growth rate of 14% to €21.4 million (2020: €18.5m).
This revenue was achieved despite a significant increase in corporate expenses accrued during Q4 trading, which increased by €12.7 million to €47 million – costs were attributed to a recruitment focus in its product and technology divisions.
Additional operating expenses in Q4 rose by 104% to €27.2 million in the corresponding period in 2020, as a result of travel, entertainment and marketing costs coinciding with the easing of COVID-19 restrictions as well as M&A and the implementation of a new enterprise resource planning.
Sportradar was able to offset these financial obstacles as a result of major partnerships with a range of sporting authorities, such as the International Tennis Federation (ITF), Bundesliga International, International Cricket Council (ICC) and UEFA.
Carsten Koerl, Chief Executive Officer of Sportradar said: “I am very pleased with our strong results, which illustrate how well we are delivering on our operational and growth plans. Importantly, we have good momentum going into our next fiscal year.
“We are continuing to invest in content, technology and people that will allow us to deliver profitable growth in line with our goals.”
Notable fourth quarter developments saw Sportadar begin to capitalise heavily on the burgeoning US sports betting market, striking or extending deals with the National Basketball Association (NBA), Women’s National Basketball Association (WNBA), NBA G League and National Hockey League (NHL), as well as B2B supplier Kambi and sportsbook PointsBet.
This raft of partnerships with US sports betting organisations did have some impact on operating expenses, with rights costs rising by 29% from €8.8 million to €38.5 million as a result of normalised sporting schedules in tandem with the easing of COVID-19 restrictions.
These costs appeared to have very little impact on Sprotradar’s US ambitions, however, with revenues from the country increasing by 108% to €71.7 million (2020: €66.3m) for the full year and by 92% in the fourth quarter to €23.2 million (2020: €21.3m).
However, the increased operating costs contributed to full year adjusted EBITDA from the US decreasing by 38% to €22.6 million (2020: €31.8m), although this was somewhat offset by a 77% in Q4 Adjusted EBITDA to €9.9 million (2020: €7.6m).
“We are particularly pleased about more than doubling our year-over-year revenues in the US, which continues its explosive sports betting growth story,” Koerl remarked.
Lastly, from a product perspective, Managed Betting Services (MBS) and Live Odds Services grew by 74% and 26% respectively during the fourth quarter, driving an increase in revenue for the RoW Betting division as a whole to €82.2 million in Q4 (2020: €36.4m) and €309.4 million (2020: €209.1m) for the full year.
Accounting for ongoing North American expansion costs and items related to its US Nasdaq listing in September, Sportradar would declare underlying FY2021 profits of $14.8 million.
Moving forward, Sportradar is projecting its 2022 revenue to reach between.€665 million and €700 million, a growth rate of between 18% and 25% in 2021, and with an increase in Adjusted EBITDA of around 21-30% to reach €123.0 million to €133.0 million.
“Sportradar has been a leader in this market since 2014, and we’re now seeing the results of our early investment,” Koerl concluded. “We continue to see the enormous opportunity as sports betting becomes an increasingly integral part of the media entertainment fabric in the US.”