Genius Sports Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 6, 2025
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Operator

Thank you for standing by. My name is Celine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Genius Sports First Quarter twenty twenty five Earnings Results. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

Thank you. I would now like to turn the call over to Genius Port. Please go ahead.

Executive

Thank you, and good morning. Before we begin, we'd like to remind you that certain statements made during this call may constitute forward looking statements that are subject to risks that could cause our actual results to differ materially from our historical results or from our forecast. We assume no responsibility for updating forward looking statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our annual report on Form 20 F filed with the SEC on 03/14/2025. During the call, management will also discuss certain non GAAP measures that we believe may be useful in evaluating Genius' operating performance.

Executive

These measures should not be considered in isolation or as a substitute for Genius' financial results prepared in accordance with U. S. GAAP. A reconciliation of these non GAAP measures to the most directly comparable U. S.

Executive

GAAP measures is available in our earnings press release and earnings presentation, which can be found on our website at investors.geniosports.com. With that, I'll now turn the call over to Mark Locke.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Good morning, and thank you for joining us today as we begin another year on a positive note. Throughout the first quarter, we are tracking exactly in line with the guidance that we set in March, highlighting the predictability of our business model. On today's call, I'll provide a quick summary of our results and cover four other key topics. First, I'm excited to share an update on our expanded NCAA partnership. Next, I'd like to highlight a few new products that we've launched since our last call.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Then I'd like to share how these products launches are creating a powerful flywheel effect for the business. And I'd like to conclude by sharing my thoughts on the stability and the resiliency of our business model. First on the results, our first quarter group revenue increased by 20% year on year to $144,000,000 This group revenue growth contributed to our group adjusted EBITDA at a 53% incremental margin, once again demonstrating the operating leverage of our business model. This resulted in a group adjusted EBITDA of $20,000,000 in the quarter, nearly tripling from the $7,000,000 reported last year. This has also translated to 800 basis points of year on year margin expansion to 14%.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Nick will cover the numbers in more detail shortly. In the meantime, I'll quickly touch on the other topics for today's call. First, the most exciting business update came after the quarter end as we expanded our NCAA partnership through 02/1932. This is a perfect example of why our tech relationships with leagues are so important. For context, our NCAA relationship began in 2018 purely as a technology agreement with no sports betting component or official data rights.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

After six years of building technology solutions, which is now relied upon for over 70,000 NCAA games per year across all major sports, we've now secured exclusive data rights for March Madness and all postseason tournaments at no out of pocket cost to Genius. This is the clearest demonstration of our strategic execution with leagues. We've leveraged our technology position to obtain exclusive data rights, again, at no out of pocket cost, making this a significant and notable deal for us. We are now positioned to provide exclusive NCAA data and marks and logos to licenses sports books and ultimately drive greater revenue without any rights fees. We're also expanding our technology solutions for NCAA with Genius IQ, our next generation AI platform, which will unlock future opportunities across broadcast, augmented advertising, coaching insights, and other immersive fan experiences, creating the powerful flywheel effect, which I'll come back to shortly.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

This generates new incremental revenue for Genius, creates more value across the entire NCAA ecosystem, and helps solidify our long term position. You should keep this strategy in mind as I move to the next topic, which is our product development, beginning with SAOT. After several weeks of testing, we are proud to announce the English Premier League has officially gone live with our semi automated offside technology or SAOT for short. This is a milestone achievement for Genius Sports and offers a scalable solution for a universal challenge in global soccer. So why is it so important?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

First, this supported the growth of our sports tech revenue in the last two quarters. Second, it reinforces our stickiness with one of the most important sports organizations in the world. Third, it opens doors to other leagues and federations who also view this as an opportunity. And fourth, and most importantly, it allows us to install our Genius IQ technology in hundreds of stadiums worldwide. The technology that enables SAOT is the same technology that drives other products like broadcast augmentations, bet vision, augmented advertising, player tracking, and so much more, meaning technology distribution is key to our strategy.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Again, the deal with UK football and the NCAA are clear examples of what is possible when leagues rely on our technology and as we execute on our strategy. As an example, one newly launched product is called Performance Studio, which is being utilized by individual teams in the Premier League. Performance Studio is a new tool that lets coaches or analysts review key moments of the match in a three-dimensional format from different points of view, which you can see on slide eight. This is just another example of the type of product that is built on Genius IQ and empowers teams to improve the quality of sport. Sticking with soccer, we've also just announced the expansion of BetVision for soccer, representing another milestone achievement for Genius.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

BetVision has proven to be a highly engaging platform so that we are thrilled to launch this product for a high volume sport like soccer. This expansion marks a significant step forward as we aim to make this interface ubiquitous in sports betting. And lastly, as it relates to fan engagement, it's worth reminding you that we're not only creating new types of engaging experiences for fans, but also helping to integrate brands as part of these new experiences. This is exactly how we gain momentum with our Fanhub platform. After announcing the launch of Fanhub late last year, we have already won many customers, including Deep Blue, an ad agency focused on women's sports, and EchoPoint Media, a renewed partnership to promote ticket sales for the Indy five hundred after we exceeded last year's targets.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

We have a robust and growing customer pipeline as these conversations continue to evolve, and we believe this is shaping up to be one of the most exciting opportunities for our business and for the entire sports advertising ecosystem over the next several years. Each of these products I've described are interesting in isolation and are independently generating revenue today. However, what excites us most is how these are each linked to one another and can scale even faster when offered by one company on a single platform creating a powerful flywheel for the business. Allow me to illustrate this using the products I've just described as examples of this flywheel, which you can follow on slide 10. Starting from the top, leads and teams depend on our technology for a wide range of opportunities.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

SAOT is a perfect example. This allows us to install our technology in venues and capture next generation data. This next generation data then powers new types of sports betting or viewing experiences, such as BetVision or alternative broadcasts of live sports that you've heard us highlight in prior quarters. BetVision is powerful because it is now becoming the destination for millions of fans to fully immerse themselves in live sports content, creating a highly engaged audience. As a next step, Fanhub then becomes the platform where brands can reach this captive sports audience.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

In this example, BetVision gives us a real time view of the audience and how they are engaging with live sport. In fact, BetVision itself can be a potential source of proprietary ad inventory, allowing brands to integrate directly into the video player and be part of the experience. Many of these brands are also official sponsors of the leagues and teams. So as we provide more optionality, brands get more value out of their official sponsorships, which flows back to the leagues and teams where the flywheel started. You can understand how we are creating value across the entire sports ecosystem.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

And as the world of sports, betting, media, broadcast, and advertising converge, our Genius IQ technology remains at the center of the flywheel. The reason I highlight this is because I wanted to share the strategic context for everything we do. As we continue to announce new products, technology agreements with leagues, alternative viewing experiences with broadcasters, expansion of BetVision, or new FanHub partnerships, you should understand how they each fit together strategically. The strategy is working, and it makes Genius an indispensable part of the sports ecosystem. As a final topic, I'd like to take a moment to reiterate our confidence in the business and our financial outlook.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

To be absolutely clear, we are largely unaffected by current macroeconomic conditions because of our unique and differentiated business model, and we have almost no exposure to these near term external risks, such as global trade, which has caused market volatility over the last several weeks. First, we believe online sports betting is currently one of the most resilient components within consumer spending, and we expect the industry should continue to grow in any economic environment. In fact, historical data provides this was true in markets like The UK and Europe throughout the two thousand and eight global financial crisis. More importantly, most of our revenue and a large proportion of our costs are highly predictable, so our commercial model is structured to protect our downside and reduce any outside risk. This is why we remain confident in generating at least $620,000,000 in group revenue and $125,000,000 in group adjusted EBITDA this year, representing 21% revenue growth, over 300 basis points of margin expansion to 20%, increased cash flow compared to last year and a meaningful step closer to our long term target of at least 30% group adjusted EBITDA margin.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

As we continue to increase our cash flow in 2025 and beyond, we are sharpening our focus on capital allocation, which is why today we announced the authorization of a share repurchase program up to $100,000,000 To be very clear, our capital allocation strategy is primarily focused on tech investment and M and A since we see several opportunities to drive growth and accelerate our long term profitability targets. That said, we believe implementing a repurchase program is just good housekeeping, and this provides us with the ability to be opportunistic, especially in a volatile market as we have seen. This program rounds out our capital allocation strategy and adds a complementary tool to deliver strong shareholder returns. Again, this program is underpinned by a durable business model and predictable cash flow outlook. With this in mind, I will now turn the call to Nick to discuss financial results in more detail.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Thank you, Mark. The first quarter was fairly straightforward as we continue to demonstrate consistent revenue growth and margin expansion. Our group revenue growth of 20% in the quarter was predominantly driven by our betting business, which increased 44% year on year to $107,000,000 This was as a result of our successful contract renewals with sportsbook customers last fall, and we're continuing to benefit from higher pricing, increased in play betting, and additional value add products and services. Growth in our betting revenue was well balanced in the quarter. Our revenue from revenue share agreements increased 65% year on year, marking the highest rate of growth since winning the NFL four years ago.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

And our more predictable betting revenue from contractual minimums increased by 36% year on year, also marking one of our strongest quarters in the last four years. At the group level, our revenue growth was also well balanced geographically as Europe, The Americas, and rest of world achieved growth of 16%, twenty three %, and 39% respectively, once again demonstrating our global reach. Our sports tech revenue also increased 12% year on year driven by the innovative products built on Genius IQ technology. As Mark briefly described earlier, this includes products like SAOT, player tracking technology, performance platforms, and broadcast augmentations as just a few examples. You've heard why this technology is crucially important to our strategic objectives, but we're also generating incremental revenue from this in the meantime as well.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Lastly, we generated 26,000,000 of media revenue this quarter compared to $35,000,000 last year. You may recall our media revenue increased by 63% in q one twenty twenty four, marking an outstanding quarter, but of course, setting a high bar for year on year comparison. Moving forward, we expect the evolution of Funhub will support growth in media revenues towards the back half of this year, likely resulting in low to mid teens growth for the full year 2025. This quarter also demonstrated our cost control and operating leverage across the business. First, our gross margins have more than doubled from 11% last year to 24% this year.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

And similarly, our group adjusted EBITDA margins also more than doubled from 6% last year to 14% this year. Lastly, on cash, we have historically seen cash outflows in the first half of the year, followed by cash inflows in the second half of the year, and we expect the pattern this year will look similar. As part of our guidance for the year, we still expect our full year cash flow to be positive and meaningfully higher than our cash net inflow in 2024. To close, we are tracking right in line with our guidance set out in March, and we remain incredibly well positioned given our largely fixed cost base, durable revenue growth drivers and multitude of opportunities still ahead as we continue our tech distribution, product adoption and commercial execution. With that, we now conclude our prepared remarks and open the line to Q and A.

Operator

Thank you. We will now begin our question and answer session. Your first question comes from the line of Jordan Bender with Citi. Go ahead.

Jordan Bender
Senior Equity Research Analyst at Citizens Capital Markets and Advisory

Good morning, everyone. Thanks for that question. Mark, maybe to start where you ended your prepared remarks, the debt facility in place, share repurchases, producing free cash flow, I'm not positioning the question, are you going to go do M and A, but what are the top priorities with the ample cash on the balance sheet and the outlook for that to only improve from here?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

So, obviously, you know, we're we're expecting positive, you know, decent positive cash flow this year. I think putting, putting up priorities, in order of, capital allocation, I think we're spending enough money, at the moment in our r and d and our software development, so we're reasonably happy with the level that that's going at, which, you know, we should as a percentage of revenue, you know, should decrease over time. I think we m and a is obviously a big focus, but, you know, we have to be very careful about what we're buying. And, you know, you kiss a lot of frogs, I think is the phrase. And, you know, we're doing a lot of kissing, but, we, you know, we expect some of them will turn into princesses at at some point.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

And then just having a share buyback having a share buyback thing is really, you know, good housekeeping for us. It's, you know, allows us to be opportunistic, and there's obviously a lot of volatility in the market. You know, the you know, the the there's obviously sometimes a, you know, a little lack of clarity that's that that's that's coming to the market from from on in terms of macro policy, and it just gives us an opportunity to be flexible and and and really have the right facilities in place should should, the opportunities arise.

Jordan Bender
Senior Equity Research Analyst at Citizens Capital Markets and Advisory

Great. And then just switching gears. Following the NCAA, you know, they've been pretty open about their desire to protect student athletes, notably the push to get player prop bands. Broadly, even though there isn't any out of pocket costs, can you talk about the balance between your need to grow revenue yet also balance the potential limitations on your data if the restrictions tighten?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Yeah. It's a really good question because we we actually see this as symbiotic. It's it's quite it's it's quite interesting that, you know, it's often pitched or the narrative is often that, you know, what the NCAA want to do is counter to what's best for the sports betting industry, and I I I strongly disagree with that sentiment. You know, our our view is, you know, is fundamentally you've gotta start with responsible gaming, responsible gambling. I mean, you know, we've seen mistakes in other countries where they haven't put that as the number one priority, and and there's been heavy crackdown on the government.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

So, you know, there's a good history and and, you know, and good evidence in in other markets, you know, in The UK of of the sports books taking this really responsibly and working with with the leagues to make sure that the the types of bets that are being offered are are the right types of bets. So, you know, I think when you look at this this, this deal, what it's doing is it's allowing the NCAA to, you know, have real visibility on where the data's going. It allows the integrity of the sport to be improved and be protected. And and, ultimately, you know, I don't think you're gonna see disagreement from any of the sports books about the way that the NCAA wants to protect their players and protect, the types of bets that are being offered. Because in the end, as an industry, as an ecosystem, it's in all our interests to make gambling responsible.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

It's in all in all our interests to make sure the integrity and is protected and that the players are protected because long term, that's how we as an industry continue to grow.

Jordan Bender
Senior Equity Research Analyst at Citizens Capital Markets and Advisory

Great. Thanks, everyone.

Operator

Your next question comes from the line of Ryan Sigdahl with Craig Hallum Capital Group. Please go ahead.

Ryan Sigdahl
Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC

Hey, good day guys. Want to start on the EdTech revenue. How much of that decline in the quarter was expected versus softer spend? And then is that timing or is there a change in expectations from what you're hearing from your sports book customers or, I guess, you know, potentially even market share changes?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Sorry. Ryan, could you just repeat the question? We missed we missed the second part of that.

Ryan Sigdahl
Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC

Yeah. Just curious for more context around the ad the media segment, decline is a bit weaker than than maybe where I was expecting. I know you have a tough comp, but just curious for reasons there, if it's a timing in spend or if it's a change in expectations from your sports book customers for the year overall.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Yeah. Hey, Ryan. It's Nick. Yeah. I mean, it's broadly in line with what we expected.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

As you know, media revenue is always a little bit less predictable and and can swing on whether someone spends on the March 31 or the April 1, particularly, obviously, with March madness at that time of year. But, no, it's broadly exactly how we how we anticipated it to be. I think as we said in the prepared remarks, it's comping against a big quarter. I think it was 63% up year on year in 2024. And what I can say, I think I said it in prepared remarks again, is that we're anticipating media to be double digit low teens growth year on year, and therefore, we'll return to growth through q two, q '3, and q four.

Ryan Sigdahl
Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC

Thanks, Nick. For my second question, just on BetVision, you expanded with several soccer leagues or football leagues, that aren't genius sports betting data customers or contracts. Curious how you think about the ability to monetize your technology beyond existing relationships and then how that may or may not impact future data rights deals with your existing sports book leagues, but also the other ones you're partnering with from a technology standpoint?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Sure. Okay. So, I mean, just to give a bit of context on this, we launched, you know, we launched, BetVision for NFL a while ago. We were running around, yeah, call it, 270 games, a year for that. And the launch of soccer is is is a really big deal for us.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

We've, you know, not only is it a new sport, but it's a much, much higher volume sport. So we're, you know, we'd be putting something like 18,000 games through that, and and we're doing obviously, doing that in partnership with with InFront, which means that that data is gonna be, highly, you know, and very, very widely distributed to the sports books, which is obviously very good for us. And, again, coming back to sort of the principle of Inplay is it's high margin betting. You know, the the margins that we're generating from Inplay, you know, three times what we're generating from the rest of the market. We're, you know, we're seeing enormous growth in that space.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

We're seeing huge numbers, millions and millions of people adopting that BetVision product and engaging with it. And, you know, we see it as a key driver to growth over the coming period.

Ryan Sigdahl
Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC

Thanks, guys. Good luck.

Operator

Your next question comes from the line of Bernie MacTurnan with Needham. Please go ahead.

Bernie Mcternan
Senior Research Analyst at Needham & Company

Thanks for taking questions. Maybe just to start on Media. Understand the guidance of low to mid teens growth through '25 and the difficult comparisons you had in the first quarter of this year. As we trend through the year and we think about the year over year growth, how much of it is just maybe existing contracts with sports books maybe in The U. S.

Bernie Mcternan
Senior Research Analyst at Needham & Company

Verse Fanhub really gaining traction here is embedded in that low to mid teens guidance for growth.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Hey, I mean, essentially, what's in the guide today is predominantly managed programmatic service from sportsbooks and non sportsbooks. So, you know, as we redid the the contracts back in last fall, as we've always had, there was minimum spend in that. And, obviously, we we increasingly spend it getting customers from non sports books as well, and, you know, that that's been a trend over the last one or three years. So that is predominantly what's in the guide. I think as Marcus said, possibly the last quarter, look, we're very excited about Funhub, and we can talk about that in more detail as through the rest of the q and a.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

From a financial perspective, there's very little built into this guide really in relation to Funhub. That has always been, I anticipate, where there's any upside in our $620,000,000 of revenue that we we've guided to, and it'll have a much more significant financial impact in 2026.

Bernie Mcternan
Senior Research Analyst at Needham & Company

On BetVision for soccer, can you just talk about the different opportunity sets of BetVision in The U. S. Versus Europe? Because I think in The U. S, part of the benefits of BetVision was to increase in play betting.

Bernie Mcternan
Senior Research Analyst at Needham & Company

Over in Europe, you know, we've heard that in play betting is already, you know, 80% of handle. So, you know, maybe just thinking about the different monetization strategy of or the opportunity set in Europe versus US. Thank you.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Yeah. I mean, that's that's a really good question. I mean, look. The the I mean, your your assessment of the of of the value of BetVision in The US is right. And, obviously, soccer has has benefit in The US.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

But, again, next quarter, with the launch of basketball, that will become, even more even more relevant. I think in Europe, you know, it's about continuing to innovate. You know, we're innovating products, increasing, you know, things like stickiness, giving additional inventory to us. But I think I think the the the the really exciting part is the evolution of the bet types. I mean, if you look back for the last twenty twenty, thirty years, all of the time I've been kicking around this industry, it's it's always basically been the same sort of product sets.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

And and what we're seeing now is with the with the distribution of Genius IQ into the leagues, we're getting much more many different types of data. You know, you're able to, you know, have information on things like the speed of the ball or height of the jump, different type of bet types. And and also on top of that, your data is instantaneous. So the fact that it's instantaneous reduces things like bet delays with sports books. So the combination of all of the benefits of automated data collection through the product sets that we're rolling out, the conversion of them into new bet types is gonna give a whole new lease of life to some of the in play betting in the European markets.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

And, again, you've gotta think of this in volume terms. You know, we're talking about, you know, hundreds of thousands of games over the next couple of years being pushed through that vision of, you know, soccer, NFL, basketball, potentially other sports as well, and and and that becoming a completely new viewing experience for the for the sports fan. And and and it's something that we think is gonna make a fundamental difference to the way that that in play betting and sports betting is engaged with.

Bernie Mcternan
Senior Research Analyst at Needham & Company

Great. Thank you both.

Operator

Your next question comes from the line of Ben Miller with Goldman Sachs. Please go ahead.

Benjamin Miller
Benjamin Miller
VP - Global Investment Research at Goldman Sachs

Great. Thanks so much for taking the questions. The NCAA deal seems to be another example of how product and value added services are becoming more important in the league and sports book relationships and negotiations. Could you provide any color on what product adoption or attach rates look like today among league partners and sportsbook customers and how that might differ across customer or partner cohorts in terms of size or importance to Genius?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

I didn't

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Oh, so fine.

Benjamin Miller
Benjamin Miller
VP - Global Investment Research at Goldman Sachs

Can you hear me?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Yeah. Sorry. I wasn't didn't catch the end of your question again, but but I think I I I think you're asking what what does the shape of the NCAA deal look like within the schools. Is that is that is that right?

Benjamin Miller
Benjamin Miller
VP - Global Investment Research at Goldman Sachs

Well, in terms of the the the the product, and attach rates for the various products among sports books and and league partners? What does that look like today, and where is there white space to maybe drive more of that into negotiations going forward?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Fine. So specifically with the sports books, historically, we didn't have the betting the betting rights for the NCAA. So the NCAA deal that we've had in place, you know, since 02/2018, I think it is, has been a deal where we distributed our technology into, pretty much all the colleges to collect the vast majority of the data that they use to run their own infrastructure. But but our ability and our right to use that embedding, you know, hasn't hasn't been in place. That as part of this new deal on this long term extension, you know, not only is this an additional adoption of further technology that we're gonna be providing to them, it's giving us the ability, under the new rights that we've been assigned to distribute that, to the sports books.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

And, again, what that means is that the sports books will let be able to have additional new product. It'll be done in a licensed and regulated way. And and, obviously, the best best part of that is, you know, we're using technology as as the as as as the currency and and and our ability to trade, with with the NCAA. So we're hoping that, you know, the the NCAA, and us together are able to push, a new a new a new, you know, era of sports betting on college sports. But as I said in my previous answer, done in a responsible way where there's great visibility back to the schools, back to the to the colleges, and, you know, that benefits the industry generally.

Benjamin Miller
Benjamin Miller
VP - Global Investment Research at Goldman Sachs

Great. And then, Nick, just

Benjamin Miller
Benjamin Miller
VP - Global Investment Research at Goldman Sachs

on the reiterated 25 guide, you've made a lot of progress, on sports book renegotiations over the past few quarters. How should we think about what might still be outstanding there, especially internationally? And what's contemplated in the guide around that?

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Yeah. Hey, Ben. I mean, we've said before, renegotiation of sports boxes is something we do on a daily basis. We had the slightly strange situation in 2024 where we ended up renegotiating all of The US deals at the same time. And I think as we said at the time, they will be staggered over the next coming years.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

None of them are one year deals, so so we're not renegotiating any with the major US sports books this fall. There are some other international sports books that naturally we would do and and renegotiate through 2025. We've taken a reasonable view given the fact we've now got a lot of track history both now in The US, but particularly in Europe of what those renegotiations look like, and we built any sensible upside both in terms of product and price within the 2025 guide.

Benjamin Miller
Benjamin Miller
VP - Global Investment Research at Goldman Sachs

Great. Thanks so much.

Operator

Your next question comes from the line of Jed Kelly with Oppenheimer. Please go ahead.

Jed Kelly
Managing Director - Equity Research at Oppenheimer & Co. Inc.

Hey, great. Thanks for taking my question. Nice announcement on the NCAA. Can you talk about how that potentially allows you you know, potentially get the college football contracts with the SEC, Big Ten, some of the other other leagues and and and where you are there? And then interesting on the replay technology, you know, I think the pain point for for sports fans here in The US is just the amount of time replay reviews take.

Jed Kelly
Managing Director - Equity Research at Oppenheimer & Co. Inc.

Is there an ability to sort of grow your sports tech revenue by introducing your replay technology more with the other big four sports? Thanks.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Thanks, Mike. Yeah. So, on on the NCAA, obviously, we can't comment on, any individual conferences. But, I mean, suffice to say that our technology is distributed in pretty much all of those conferences and all of those leads, and it is it is the data and the technology stack that collects the data from those conferences, from each of those games, and is used to distribute on an official basis. So that that is that is a fact, and therefore, we are clearly in an extremely strong position as as the colleges evolve their thinking and decide how they'd like to move forward in the space.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

In terms of in terms of the replay stuff, I mean, the the it's it's quite interesting having a sort of mainly American based investor base because the the the product that we put out, you know, semi automated off-site tracking, SAOT, is is, in in in in sort of European terms, is a massive step forward. It's a huge it's a huge deal in terms of, you know, EPL and the way that the game's played. And, the adoption has been fantastic, and the actual feedback on the product and how it's sped up the game, reduced error rates. I think it's fair to say that the Premier League, and, you know, that where it's being used, it's it's been incredibly well received. And and, again, we're probably, there's there's quite a lot of press even coming out today that we've seen, about this.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

So, you know, taking that approach and taking that level of expertise that we have and applying it to US sports is absolutely something that, is available to us and something that we obviously think a lot about. You know, the key the key to us being able to do that is the deployment of our technology within the within the, stadiums, within the grounds. Again, we focus on volume, so we focus on soccer. We focus on basketball. But, again, all of these relationships, the likes of the relationship with the NCAA and and and other US sports that we work with, gives us a stronger position in able to be able to leverage the technology that we've got out there and and, provide those services to those sports.

Jed Kelly
Managing Director - Equity Research at Oppenheimer & Co. Inc.

How much are you cutting the review time down by?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

It it depends on the review, but, I mean, they're, you know, they're I mean, for you know, down from, say, three or four minutes is probably not an unreasonable statement.

Jed Kelly
Managing Director - Equity Research at Oppenheimer & Co. Inc.

Alright. Well, good job, and, thanks.

Operator

Your next question comes from the line of Clark Lempen with BTIG. Please go ahead.

Clark Lampen
Managing Director at BTIG

Hi, good morning. Thank you very much for taking the questions. I have two. Mark, I wanted to start by following up, guess, on sort of first party technology. It sounds like there's a lot of really interesting extension opportunities that stem from having the newest, I guess, sort of state of the art first party tech in stadiums.

Clark Lampen
Managing Director at BTIG

Hopefully, this makes sense. But in instances where you don't have that in place, does it in any way limit opportunity to capitalize on augmentations or some of the other sort of value drivers that stem from having a better capture? And then the second question for either Mark or Josh, Momentum on on the Fanhub side certainly seems to be picking up. I know you guys are hosting a new front later this week. I'm curious if you could give us a sense for where you're seeing the most traction with the pitch right now.

Clark Lampen
Managing Director at BTIG

And I know macro impacts were downplayed, but, I'm curious if there's been any pause in client interest or delays or or sort of elongation of the sales cycle as a result of of the current macro backdrop. Thank you.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Yeah. Okay. So there's so there's quite there's quite quite a lot on on in in that. Okay. So to to go to your first question, the first party, technology.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Look. So the way that we have always run our business, the principles of it is we we just sort don't believe in these big banks. We don't believe in, you know, having to have all the technology or the product rolled out before we make incremental revenue. So, you know, the the distribution of Genius IQ or as we, you know, we you know, some people know it as Dragon. That that distribution in in and and using it as a first party technology, as you call it, in the stadiums is a critical, part of our long term strategy.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

But it's it's it's it's it's a it's a it's not the the the the initial necessary requirement for us to be able to generate revenues because, you know, our augmentation product that we launched and the very first versions of that that provide us with the ability to, you know, highlight and augment, broadcast, as well as providing advertising inventory on it as well. That that is, able to be done off of third party, TV streams. And that's something that we've proven now, you know, fairly fairly concise conclusively in in lots of areas. The distribution of of of Genius IQ into the stadiums, this first party technology, really what that allows us to do is to go to the next stage of evolution. It allows us to, create the virtual recreations of the events.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

It allows us to put the mesh product out there where we've got 10,000 points on a human body 200 times a second. It allows us to get that incredibly granular detail. It create auto eventing products, way we're collecting the data on on the events, in an automatic fashion, which, again, SAOT that I was just mentioning, that has come from, but also, you know, our own data collection, what we can use that data for in terms of new bet types, in terms of how we, improve, visualization and things like bet vision. All of those things come from that, that product rollout. But, again, our product rollout has always been about how do we roll out in a, considered manner, how do we do how do we do that so that we're generating incremental revenue, incremental profitability, generating, you know, improved shareholder returns from every pound of investment or dollar of investment that we're making in our in our software set?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

And that that philosophy hasn't changed. It's just that we're now getting to probably the most exciting time I've ever known in Genius where, you know, we're actually getting real traction, real clients. We're getting these new products that are launching on a very, very regular basis now. You've seen an awful lot of product come out of this business in the last six to nine months, and that product adoption is really good. So, you know, we're really, really starting to get the flywheel that I sort of mentioned in the in the earnings script really spinning.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

So we're feeling extremely positive about our product set. I'm in fact, I I mean, honestly, I couldn't be more excited about it. So from from the, from the ad tech side, I I mean, to tackle the first question, have we seen a slowdown or a pause? I think I think there's been a couple of a couple of conversations when the sort of tariffs came in that that gave a bit of pause for thought with, with with some of the advertisers. But, again, I think it's sort of noise.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

I mean, this is gonna be passing. Again, as Nick said earlier, we've been extremely cautious with our, our assessment of the the the contribution from from Fanhub this year. It's only a few million dollars in in the numbers that we've put out. And, that's something that we see an awful lot of upside in. And, you know, just from a numbers point of view, we're tracking pretty much exactly as we thought we would.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

You know, the the augmented ads, the BetVision, the live data from sports, all of those things are coming together to provide us with ways of augmenting and advertising on unique inventory that we're creating. So unique inventory in BetVision in in in in the partnerships that we're doing with our with our sports leagues. All of the product that we're starting to put out in the market allows us to leverage all of those parts of our ecosystem, all of the data we have to provide a really solid, advertising solution, for for this sort of next generation of, you know, evolution in the ad tech space. So we're feeling really good about it.

Operator

Your next question comes from the line of Josh Nichols with B. Riley. Please go ahead.

Josh Nichols
Senior Research Analyst at B.Riley Securities

Yes. Thanks for taking my question. Just one question for me. Just wanted to dive into BetVision a little bit more. You've had a lot of success with the NFL, and now you're expanding soccer, a very high volume sport, of course.

Josh Nichols
Senior Research Analyst at B.Riley Securities

Like two things. One, is there much in the guide for this BetVision expansion into soccer? Or is that more an optionality? And then secondly, if you could just dive a little bit into what you think the longer term opportunity is given the traction you've seen with the NFL over the past couple of seasons.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Yeah. Hey, Josh. Just I'll I'll take the one on specific on the guide, I'll hand over to Mark to talk about the long term strategy and positioning of that vision. Yeah. I I mean, the majority of it is is built into the guide.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Like like all of these things, Josh, there's always upside. Know us in terms of our our relatively conservative guide positions. So, yeah, we do have a base. We're aware that this was obviously launching when we gave the guide. So we we have a base in there.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

But as always, if if we're able to accelerate this commercially, then there might well be some upside for 2025. And I'll hand over to Mark to to to talk about the the longer term vision. Yeah.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

So so long term vision of a bit of of that vision, not the easiest statement, is is is really is really to, you know, get get get it get it to become as ubiquitous as possible. We we want to you know, we we cover an awful lot of sports. Again, you know, we're sort of up in around 90,000 soccer games a year, it's probably 60,000 basketball games a year. And and and we see BetVision as a as a great as a great, distribution for for that. And and, again, our strategy is is kinda working exactly as we said.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

We we said that we'd roll out soccer, you know, this quarter. We'd have, you know, 18,000 games in that. We've got basketball coming next quarter. It's about making that distribution real, making sure that we're getting it out there, making sure that we're adding additional product to BetVision, you know, whether that's the way that we're augmenting those broadcasts or whether whether it's functionality in terms of betting or whether it's, frankly, additional betting markets that we're able to offer. All of those things are coming, and, you know, it's it's about, doubling down on this on this strategy.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

We're feeling really, really positive about it. The eyeballs on this product are very, very significant. We've got an awful lot of users, you know, engaging with it, and, we're feeling really good about that.

Josh Nichols
Senior Research Analyst at B.Riley Securities

Appreciate it. Thank you.

Operator

Your next question comes from the line of Chad Beynon with Macquarie. Please go ahead.

Chad Beynon
Chad Beynon
Managing Director, Analyst at Macquarie Group

Morning. Thanks for taking my question. Mark, I wanted to ask about your views on the predictive markets, which have crept up more, in this quarter. Do you view that as a threat against some of your partners and kind of the growth of the business, an opportunity? Or, you know, would you rather leave that to kind of the regulatory, groups to determine how this fits into, you know, sports betting engagement and overall wagering markets going forward?

Chad Beynon
Chad Beynon
Managing Director, Analyst at Macquarie Group

Thanks.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Yeah. I mean, it's it's pretty it's pretty interesting, isn't it? I mean, pretty pretty fast moving as well. And, you know, we're really right in the middle of this. There's obviously a lot of I mean, you know, you read the

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

There's, you know, various different evolutions of it. I mean, I'll, you know, if you take it to a higher level, we we see this as as as as pretty positive, to be honest with you. It's additional additional opportunity for us, additional, product for us, additional partners for us. And, you know, we think we think that that's that's that's quite, you know, quite there's a there's a opportunities for us. We you know, there are you know, there's some sort of, you know, questions around how how far this is gonna go.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

And and, again, I'm you know, I I I have some views, but but but, you know, from our point of view, we we we see this as an opportunity, we see some potentially interesting moves. I think one of the questions that sort of it does raise, which I think is interesting, again, is is, you know, what what does this do, to long term, regulation in the market? You know, does it does it, you know, potentially, you know, tip the interest, around federal legislation of sports betting or or, you know, are the states gonna continue on on on on their own? I think that's a really interesting question and and one that could have some very, you know, extremely positive ramifications, you know, if if if those things were to to go through. So, you know, it's an interesting time.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

It's it's it's it's, you know, it's worth keeping an eye on and, again, worth us, evolving our relationships with those parties and and and continuing to to to make sure that we're well positioned to provide the right products.

Chad Beynon
Chad Beynon
Managing Director, Analyst at Macquarie Group

Great. Thanks. And then Nick, another one in terms of what goes into the guidance. I think last year or last earnings call you mentioned 30% in play for, NFL for the season. So I'm guessing that was for q four and and and kind of the spillover into q one.

Chad Beynon
Chad Beynon
Managing Director, Analyst at Macquarie Group

But how are you thinking about that in play percentage in the guide? Is there an expected, increase, getting to the the natural levels that we see in other markets? Thank you.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Yeah. Hey, Chad. Yeah. I'm anticipating there to be a small up increase in the back end of the year for the new the twenty five, twenty six NFL season, but not a remarkable sea change. If there is, that's upside to the guide.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

I'm expected to be a a couple of percentage points.

Chad Beynon
Chad Beynon
Managing Director, Analyst at Macquarie Group

Great. Thank you both.

Operator

Your next question comes from the line of Mike Hickey with Benchmark. Please go ahead.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Yeah, Charles.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Question is just a

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

prediction market question. Obviously, a lot to learn, but you have experience there, Mark, in Europe and other regions. And you said it's sort of a probably a win for you guys. Over time, do do you see the necessity for live data, Mark, in these markets? Or is the opportunity for you more in, the the media side or or fan engagement opportunities?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Look. We we can't see new product based on sports events being successful without relationships being former sports. You know? We think that's essential. And, obviously, we've got a very secure position as a partner to the league, so we're very well placed to, exploit those relationships and, as they develop and as they grow.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Okay. Thanks. The, and then on your buyback, just maybe a a clarification. Obviously, in our view, at least, your your stocks still seem very undervalued here. Are you sort of is this more optimal capital on the buyback, or is this sort of a gradual sort of

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

I'm really sorry. I can't hear what you're saying. I don't know if it's your line or not.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Yeah. Is that better, guys?

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Oh, that's much better. Yeah.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Is that better?

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Yeah. Alright.

Josh Nichols
Senior Research Analyst at B.Riley Securities

Sorry.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

You're a little of mistake. Bonking out on me.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Yeah. Sorry, dude. The on the buyback, just a clarification, is this more opportunistic? Or should we sort of see like a quarterly cadence or grind here? Obviously, your stock, in our view, at least seems very undervalued.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

So it seemed like a good allocation to us.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

Listen. It's entirely opportunistic, and, it's really about just good housekeeping. You know, the market's volatile at the moment. We sit and think them, you know, who knows if there's gonna be some opportunity or not. But but at the moment, this is entirely opportunistic.

Mark Locke
Mark Locke
Co-Founder, CEO & Director at Genius Sports

You know, we don't see any sort of cadence you should be looking into at all.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Okay. Good. Last clarification for us. On the NCAA deal, congratulations. Obviously, a big win for you.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Just wanted to clarify, I guess, the monetization piece. Obviously, the data rights were not in your original agreement. Just wasn't sure like it probably wasn't baked into your guide for this year. Obviously, we're through March Madness now. I'm guessing that's sort of the big event where you would look to next year.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

But how much motivation is that for you in the near term? And in fact, is that upside to your '25 guide? Thanks.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Mike. It's Nick. You're right. You kind of slightly answered your own question there, Mike. Obviously, the lion's share of the the the financial aspect is is March Madness.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

We're through that now, and therefore, I'm expecting there to be a most of the monetization to happen in '26, not in '25.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Appreciate it. Take care.

Operator

And your next question comes from the line of Eric Martinuzzi with Lake Street Capital Markets. Please go ahead.

Eric Martinuzzi
Senior Research Analyst at Lake Street Capital

Yes. A question for you, Nick, on the cash used. You said in your press release that we're talking about an increase in the annual cash flow in 2025, and yet we saw a significant increase in the amount of cash used at least here in q one of twenty twenty five versus q one of twenty twenty four. So, help me understand maybe some, one or two puts and takes that bridges that for me.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

Yeah. Hi. Hi, again. In the prepared remarks, I reiterated what what I've said previously. You know, we were obviously significantly cash positive as an operating cash flow in 2024, the net cash flow as well.

Nicholas Taylor
Nicholas Taylor
CFO at Genius Sports

I'm expecting that to again happen in 2025, although I expect that to be increased proportionate with the increase of EBITDA that we're delivering in '25 as opposed to 2024. As far as individual courses are concerned, I'm expecting '25 really to follow the same sort of seasonal pattern as '24, and that's really a working capital outflow probably in q one and q two and then significant working capital inflows in q three and q four. In terms of when you look at it year on year, you know you know how these things work, Eric, it can just be a matter of timings around payment runs, whether it's happening on the March 31 or the April 1, but the the pattern seasonality this year should follow next year and therefore expecting significant operating cash and cash inflow for 2025.

Eric Martinuzzi
Senior Research Analyst at Lake Street Capital

Got it. Thank you.

Operator

That concludes our question and answer session, and that concludes today's call. Ladies and gentlemen, thank you all for joining. You may now disconnect.

Executives
    • Mark Locke
      Mark Locke
      Co-Founder, CEO & Director
    • Nicholas Taylor
      Nicholas Taylor
      CFO
Analysts
    • Executive
    • Jordan Bender
      Senior Equity Research Analyst at Citizens Capital Markets and Advisory
    • Ryan Sigdahl
      Partner & Senior Research Analyst at Craig-Hallum Capital Group LLC
    • Bernie Mcternan
      Senior Research Analyst at Needham & Company
    • Benjamin Miller
      VP - Global Investment Research at Goldman Sachs
    • Jed Kelly
      Managing Director - Equity Research at Oppenheimer & Co. Inc.
    • Clark Lampen
      Managing Director at BTIG
    • Josh Nichols
      Senior Research Analyst at B.Riley Securities
    • Chad Beynon
      Managing Director, Analyst at Macquarie Group
    • Mike Hickey
      Equity Research Analyst at The Benchmark Company LLC
    • Eric Martinuzzi
      Senior Research Analyst at Lake Street Capital
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Key Takeaways

  • In Q1 group revenue rose 20% year-on-year to $144 million while adjusted EBITDA nearly tripled to $20 million, expanding margins by 800 bps to 14% and tracking in line with guidance.
  • The NCAA partnership was extended through 2032 to include exclusive data rights for March Madness and postseason tournaments at no additional cost, leveraging Genius’ existing tech footprint.
  • Genius rolled out new offerings including SAOT in the English Premier League, Performance Studio’s 3D match analysis, BetVision for soccer, and Fanhub—already adopted by clients like Deep Blue and EchoPoint Media.
  • These products power a strategic flywheel: stadium-installed Genius IQ tech captures advanced data that fuels immersive betting/viewing experiences and integrated advertising via Fanhub.
  • The company reaffirmed 2025 targets of $620 million in revenue, $125 million in adjusted EBITDA (20% margin), and authorized a $100 million share repurchase, underscoring its resilient, predictable model.
AI Generated. May Contain Errors.
Earnings Conference Call
Genius Sports Q1 2025
00:00 / 00:00

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