Genius Sports Q3 Earnings Call Highlights

Key Points

• Q3 results beat guidance: Revenue reached $270 million and adjusted EBITDA was $87 million, with the EBITDA margin rising to 32% from 20% a year earlier. Free cash flow was $54 million.
• Growth came from betting and media: Betting revenue rose 33%, while media revenue increased 126%, supported by the Legend acquisition, prediction-market activity and Moment Engine adoption.
• Outlook raised: Genius Sports lifted its full-year revenue guidance to $1.015 billion–$1.035 billion and adjusted EBITDA guidance to $287 million–$297 million. It reaffirmed its 2028 margin target and plans to reduce net leverage through debt repayment.

Genius Sports NYSE: GENI reported third-quarter revenue and adjusted earnings above its guidance, raised its full-year outlook and said its acquisition of Legend was contributing to growth as competition for prediction market customers intensifies.

Revenue was $270 million, exceeding the company’s $260 million guidance, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $87 million, above its $85 million forecast. The adjusted EBITDA margin rose to 32% from 20% a year earlier.

The company generated $54 million in free cash flow, equivalent to 61% of adjusted EBITDA, and reported $10 million in GAAP operating profit. CEO Mark Locke said free cash flow would become a key measure of the combined company’s performance.

Betting growth and prediction markets

Betting revenue rose 33% year over year, helped by the start of the NFL season, increased in-play betting, improved operator win margins and higher pricing on recent contract renewals, CFO Bryan Castellani said. Prediction markets also contributed to growth.

Locke said approximately 70% to 80% of betting revenue comes from contractually fixed minimum revenue guarantees. During the first four weeks of the NFL season, gross gaming revenue rose nearly 60% year over year, while in-play gross gaming revenue increased nearly 50%, he said. The third quarter included only three weeks of the NFL season.

Genius Sports makes money from prediction markets through customer acquisition, data supplied to market makers and official data used to settle contracts, Locke said. The company charges market makers a data fee and takes a share of their profits, he said.

Locke expects the regulatory structure for prediction markets to evolve but argued that demand for sports wagering would remain meaningful whether activity occurs through exchanges or traditional sportsbooks. Asked about the NFL’s stance on prediction markets, he said he could not speak for the league and that NFL participation was not assumed in the company’s guidance through 2028.

Legend and media expansion

Media revenue increased 126% year over year, supported by the Legend acquisition, spending by prediction markets and online sportsbooks, and adoption of the Moment Engine advertising platform, Castellani said.

He noted that a growing share of media revenue comes through the company’s self-service platform, where revenue is recognized on a net rather than gross basis. That results in lower reported revenue than a gross presentation would produce, but a higher margin, he said.

Locke said Legend’s integration was progressing ahead of schedule and cited deals with Kalshi and Polymarket as examples of commercial synergies. He also said customer acquisition costs in prediction markets had doubled since Genius Sports bought Legend, benefiting the company as operators compete for customers.

The company launched Prediction.com, combining Legend’s audience and technical capabilities with Genius Sports’ data. Locke said users who engage with a product that combines live sports data with a feed of exchange trades are five times more likely to transact.

The Moment Engine added 279 advertisers in the third quarter, following 174 in the second quarter. Third-quarter net revenue retention was 224% compared with the second quarter, although Locke cautioned that growth could vary as advertiser adoption and spending patterns change.

Outlook and debt reduction

Genius Sports raised its full-year revenue guidance to $1.015 billion to $1.035 billion and adjusted EBITDA guidance to $287 million to $297 million. It expects a year-end cash balance of approximately $260 million and more than $100 million in free cash flow for the second half of 2026.

Castellani said debt repayment remains the company’s capital allocation priority. Genius Sports expects net leverage to fall to approximately two times by the end of 2026 and decline further in 2027.

The company reiterated its 2028 targets of a 35% adjusted EBITDA margin and more than 60% unlevered free cash flow conversion. Castellani said annual interest expense of $50 million to $60 million would translate that unlevered target into free cash flow conversion of more than 50%.

Locke also disclosed that he sold about 800,000 shares in September and arranged a collar over another 4.4 million shares for family and tax planning. He said he remained substantially invested in the company.

About Genius Sports (NYSE:GENI)

Genius Sports Limited NYSE: GENI is a sports technology and data company that provides official sports data, technology, and digital media solutions. Its platform helps sports organizations collect, manage, and distribute live game data while supporting fan engagement and commercial activities.

The company supplies real-time data and related products to sportsbooks, media companies, sports leagues, teams, and brands. Its services include live statistics, betting data and trading solutions, streaming and video content, digital marketing, sponsorship activation, and tools designed to connect sports audiences with content and advertising.

Genius Sports serves customers across international sports markets, including North America, Europe, and other regions.

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