Sportradar Group Q3 Earnings Call Highlights

Key Points

• Strong third-quarter performance: Revenue rose 24% to €363 million, while adjusted EBITDA increased 21% to €102 million. Betting content, streaming, data products and U.S. demand were key growth drivers.
• Prediction markets are emerging as a new growth engine: Sportradar said the business made a positive contribution for the first time, with partnerships including Polymarket, Kalshi, Novig and Robinhood, and expects significant growth next year.
• Full-year guidance maintained despite Brazil uncertainty: The company continues to target 19%–21% constant-currency revenue growth and 24%–27% adjusted EBITDA growth, while IMG ARENA synergies are exceeding expectations and share repurchases remain part of its capital-allocation strategy.

Sportradar Group NASDAQ: SRAD reported third-quarter revenue growth of 24% as demand increased for betting content, streaming, data products and services tied to prediction markets. The company said its integration of IMG ARENA assets is generating revenue synergies above its original target, while it maintained its full-year outlook despite uncertainty in Brazil.

Revenue for the third quarter totaled €363 million, up €70 million from a year earlier. Adjusted EBITDA rose 21% to €102 million, producing an adjusted EBITDA margin of 28.2%. Profit for the quarter increased €5 million to €27 million.

“This quarter is a clear example” of Sportradar’s position in an expanding sports ecosystem, Chief Executive Officer Carsten Koerl said, citing demand for official real-time data across sports betting, media, technology and prediction-market platforms.

Betting Content and U.S. Growth Drive Results

Betting technology and solutions revenue reached €297 million, an increase of 27% from the prior-year quarter. Within that group, betting and gaming content revenue rose 37%, driven by demand for streaming, engagement products, odds and live data. The company said contributions from the IMG acquisition and expanding prediction-market demand supported the increase.

Managed Betting Services revenue declined 3% year over year. Chief Financial Officer Craig Felenstein said strong turnover growth in Managed Trading Services was more than offset by lower trading margins after unfavorable UEFA and European soccer outcomes in late August and early September.

Revenue in the company’s sports content, technology and services segment increased 11% to €66 million. The growth was attributed to marketing and media services, including increased spending by media and technology clients and higher affiliate marketing expenditures by prediction-market exchanges and sportsbook customers pursuing customer acquisition.

Geographically, U.S. revenue increased 47% from a year earlier, while rest-of-world revenue grew 17%. The U.S. represented 27% of Sportradar’s revenue mix during the quarter.

Prediction Markets Become a New Revenue Contributor

Koerl said the third quarter marked the first period in which prediction markets made a positive contribution to results. Sportradar has built relationships across exchanges, brokers and market makers, using its existing sports rights, data and technology infrastructure.

The company said Polymarket uses its full suite of prediction-market services across 20 leagues, including the NBA, ATP Tour, MLB, NHL and Bundesliga. Kalshi uses Sportradar’s official data, odds, integrity services, fan engagement and customer-acquisition offerings. Novig became the company’s third exchange partner, while Robinhood became its first broker agreement.

Sportradar has also signed approximately 10 market makers, according to Koerl. He described market makers as a significant opportunity because they seek ultra-low-latency data feeds to support trading algorithms. The company is developing prediction-market feeds that incorporate deep official sports data and is exploring measures such as server co-location to reduce latency.

Felenstein said prediction-market agreements include both fixed-fee elements and variable components that grow with market volumes. He said Sportradar expects “significant growth” from prediction markets next year but declined to quantify the contribution, citing uncertainty around new contracts, deal structures and market trading activity.

The company said the NBA’s authorization of prediction markets that use official data is supportive of its strategy. Koerl said the anticipated NBA contribution was already included in Sportradar’s outlook for the remainder of 2026.

IMG Integration, Costs and Cash Flow

One year after acquiring IMG ARENA, Sportradar said the acquired rights portfolio is delivering revenue synergies above its original 25% target. The company has added premium golf and mixed martial arts products to its broader customer base and has used IMG content in offerings including player and micro markets, virtual live match trackers and tennis Grand Slam products.

Felenstein said the IMG transaction has been favorable not only because Sportradar secured rights that are generating revenue and margin benefits, but also because the company expects to receive two $50 million payments from IMG. The first payment is expected during the fourth quarter of 2026, with the second expected in November 2027.

Sports rights expense rose 54% to €112 million during the quarter, primarily because of IMG content and the seasonal concentration of tennis, golf and soccer events. Adjusted personnel expenses declined 5% to €68 million despite including IMG headcount, which the company attributed to efficiency initiatives and lower bonus accruals. Adjusted purchase services rose 24% to €51 million, while adjusted other operating expenses increased 34% to €29 million, including Brazil-related costs and expenses supporting adjacent growth opportunities.

For the first nine months of 2026, free cash flow rose 18% to €177 million. Free cash flow conversion was 72%. Felenstein said fourth-quarter cash conversion would likely be negative because of the timing of sports-rights payments and prediction-market cash flows, though the company still expects full-year free cash flow conversion above its 2025 rate of 56%, excluding non-routine legal payments.

Brazil Uncertainty and Capital Allocation

Sportradar retained its full-year guidance for constant-currency revenue growth of 19% to 21%, equivalent to reported revenue of €1.518 billion to €1.533 billion at current exchange rates. It continues to expect constant-currency adjusted EBITDA growth of 24% to 27%, or reported adjusted EBITDA of €360 million to €368 million.

The outlook does not include the impact of the pending Atrium Sports divestiture because closing remains subject to regulatory approval. Sportradar agreed to sell Atrium Sports, the coaching and scouting business of Synergy Sports, to Teamworks Innovations for $170 million. Felenstein said Atrium accounts for nearly all sports performance revenue and has standalone adjusted EBITDA margins slightly above 30%.

Brazil remains a source of uncertainty. Felenstein estimated Brazil-related annual revenue at a little more than €60 million, with roughly one-quarter of that amount assumed in the fourth quarter. He said potential cost reductions would not materially begin in the fourth quarter but could include office, personnel and sports-rights savings in 2027 if the business does not continue as currently structured.

Koerl said Sportradar supports a regulated Brazilian betting market and is monitoring legislative and court proceedings following a provisional measure signed in September.

The company ended the quarter with €190 million in cash and cash equivalents, an undrawn €250 million revolving credit facility and no debt. It repurchased 28 million shares for approximately $408 million year to date, representing 24% of its free float at the beginning of the year. Felenstein said Sportradar expects to continue evaluating share repurchases alongside investment in its core business, potential acquisitions and newer initiatives such as its PlayRadar iGaming offering, which is expected to launch a 24/7 channel early next year.

About Sportradar Group (NASDAQ:SRAD)

Sportradar Group AG is a sports technology and data company that provides business-to-business solutions to sports federations, leagues, media organizations, sportsbooks and other clients worldwide. The company collects, processes and distributes sports data, helping customers deliver live scores, statistics, schedules, news and other sports content across digital platforms.

Its products and services include real-time data feeds, betting odds and managed betting services, audiovisual content, marketing solutions, fan-engagement tools and sports integrity services.

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