Genius Sports Beats Expectations in Q3 as U.S. Sales Triple

Genius Sports said its U.S. business tripled in its third quarter compared to 2021, as the sports data and analytics business beat Wall Street expectations on sales and earnings.

The company said it generated $235.7 million of revenue in the quarter, ended Sept. 30, up 14% on the year and besting management’s earlier guidance of $231 million. Genius booked a net loss of 4 cents a share, beating analyst consensus of a 7-cents-a-share loss, according to data compiled by Thomson Reuters.

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“This year has been characterized by strong execution as we continue to deploy innovative technology, win new customers, and strengthen our key partnerships across the sports, betting, media, and broadcasting ecosystem,” Genius founder and CEO Mark Locke said in a press release this morning. “We remain on target to achieve our full-year goals set on our Investor Day at the start of 2022.”

While Genius’ primary business is betting technology, content and services—accounting for 63% of its revenue—its media business showed the best strength in the period. Sales for that business line were 29% higher in the quarter, to $17.9 million, and up 83% for the year. Its media arm offers programmatic advertising services allowing customers to target desirable groups of consumers on websites and social media. The company said that growth in that business line was mainly organic, bolstered by some new customer additions.

Investors have punished sport betting stocks all year on fears of stock market valuations and unhappiness with high spending across the industry. Genius has been working to meet Wall Street’s demand that such businesses show financial progress, and the company has a stated goal of being profitable this year in its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). Under that metric, Genius had a positive quarter, posting adjusted EBITDA income of $7.7 million, compared to a loss a year ago. For the first three quarters of 2022, the business is running 32% ahead of last year on total sales of $235.7 million, with adjusted EBITDA of $13.1 million and a net loss of 37 cents compared to a loss of $4.02 in 2021.

Many fast-growing, technology-centered businesses highlight adjusted EBITDA as their preferred metric on the health of their business. In Genius’ case, it adjusts EBITDA by adding back stock-based compensation, litigation costs, expenses from its going-public transaction, the change in value of warrants on its stock from last quarter and a loss on foreign currency. The last item in particular held back top-line results, as the increasing strength of the U.S. dollar diminished non-U.S. sales when translated back to dollars. On a constant currency basis, sales were up 28% in the quarter.

For full year 2022, Genius said it expects total revenue to be $430 to $440 million even with the currency headwinds. Shares of the company closed at $4.62 Wednesday, down 39% in 2022.

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