Full Year 2022 Highlights and Annual Outlook

Revenue for the full year of 2022 increased 30% to €730.2 million ($781.3 million)1 compared with the prior year, driven by 26% growth from Rest of World Betting and 78% growth from the U.S. Full year revenue exceeded the Company’s 2022 annual outlook range of €718.0 million to €723.0 million.

In 2022, the Company strengthened its core betting business by increasing its wallet share with customers by selling its higher value products. Managed Trading Services (MTS) turnover3 volume grew 84% to €19.4 billion, the Company’s digital advertising product ad:s’ revenue grew 69%, and U.S. betting revenue grew 101%, extending its leadership position in the U.S. Furthermore, Sportradar continues to invest in advanced technologies such as trading algorithms, artificial intelligence and computer vision technology.

Total profit for the full year 2022 was €10.5 million compared with €12.8 million for the prior year. Adjusted EBITDA2 for the full year of 2022 increased 23% to €125.8 million ($134.6 million)1 compared with the prior year and was within the Company’s 2022 annual outlook range of €124.0 to €127.0 million.

Adjusted EBITDA margin2 for 2022 was 17% compared with 18% for 2021. Adjusted EBITDA margin for the second half of 2022 improved by 400 bps over the second half of the year 2021.

Cash and cash equivalents totaled €243.8 million as of December 31, 2022 and total liquidity available for use at December 31, 2022, including undrawn credit facilities was €463.8 million. The Company repaid €420.0 million of its outstanding term loan debt eliminating the term loan in its entirety.

Sportradar signed new and extended multi-year agreements with FanDuel for official NBA data, NASCAR, Turkish Basketball Federation, Australian premier cricket competitions, and Tennis Data Innovations, in addition to launching integrity focused programs such as Athlete Wellbeing to support athletes’ mental health. The Company also acquired Vaix, a pioneer in developing AI solutions for the iGaming industry.

The Company is providing an annual outlook for full year 2023 for revenue and Adjusted EBITDA2. Revenue is expected to be in the range of €902.0 million to €920.0 million and Adjusted EBITDA2 is expected to be in the range of €157.0 million to €167.0 million. Please see the "Annual Financial Outlook" section of this press release for further details.

Fourth Quarter 2022 Highlights

Revenue in the fourth quarter of 2022 increased 35% to €206.3 million ($220.7million)1 compared with the fourth quarter of 2021.

The RoW Betting segment, accounting for 51% of total revenue, grew 29% to €105.9 million ($113.3 million)1, driven by strong performance from Managed Betting Services (MBS). MTS trading volume grew 75%, primarily driven by strong FIFA World Cup performance.

U.S. segment revenue grew 77% to €41.2 million ($44.0 million)1 compared with the fourth quarter of 2021, driven by strong market growth and positive adoption of in-play betting. The U.S. segment generated a positive Adjusted EBITDA for the second consecutive quarter with an Adjusted EBITDA margin of 11%.

The Company’s Adjusted EBITDA2 in the fourth quarter of 2022 increased 64% to €35.1 million ($37.6 million)1 compared with the fourth quarter of 2021 as a result of strong revenue growth despite increased investment for growth.

Adjusted EBITDA margin2 was 17% in the fourth quarter of 2022, an increase of 300 bps compared with the prior year period.

Adjusted Free Cash Flow2 in the fourth quarter of 2022 was (€43.6) million, compared with (€22.5) million for the prior year period, as a result of unfavorable impact from foreign currency exchange, planned pre-payments of sports league rights, taxes as well as restructuring costs. The resulting Cash Flow Conversion2 was (124%) in the quarter.

During the quarter, the Company prepaid the remaining €220.0 million of its outstanding debt and has no more outstanding debt.

Carsten Koerl, Chief Executive Officer of Sportradar said: “I am very pleased with our strong results driven by exceptional execution this past year. We saw excellent performance across all of our key performance metrics despite challenging macroeconomic conditions including a second consecutive quarter of positive Adjusted EBITDA in the U.S. Our continued long-term partnerships with leading global sports bodies, and innovation across new technologies such as artificial intelligence and computer vision and as important, a team passionate about delivering solutions to our clients, make us very excited about our growth in 2023 and beyond.”

Ulrich Harmuth, Interim Chief Financial Officer added: “Our fourth quarter financial results illustrate the momentum we’ve built throughout 2022. We demonstrated operational leverage in our business model, despite making significant investments in our products and technology, streamlined our organization to be more customer-centric, and strengthened our balance sheet by repaying our debt. Our 2023 guidance of revenue growth and margin expansion reflects the investments we have made to date and the growing global sports market opportunity.”

Segment Information

RoW Betting

Segment revenue in the fourth quarter of 2022 increased by 29% to €105.9 million compared with the fourth quarter of 2021. This growth was driven primarily by increased sales of the company’s higher value-add offerings including Managed Betting Services (MBS), which increased 83% to €38.3 million. MBS growth was attributable to a record MTS annualized turnover3 of over €19.4 billion, helped by the FIFA World Cup, and the success of its strategy to move existing customers to higher value add products.

Segment Adjusted EBITDA2 in the fourth quarter of 2022 increased to €46.3 million compared with the fourth quarter of 2021. Segment Adjusted EBITDA margin2 decreased to 44% from 56% in the fourth quarter of 2021 driven by increased investment in AI technology for MTS and Computer Vision technology.

RoW Audiovisual (AV)

Segment revenue in the fourth quarter of 2022 increased by 17% to €41.8 million compared with the fourth quarter of 2021. Growth was driven by cross-selling audiovisual content to existing data customers and expanding AV portfolio sales with existing AV customers.

Segment Adjusted EBITDA2 in the fourth quarter of 2022 increased 20% to €11.9 million compared with the fourth quarter of 2021. Segment Adjusted EBITDA margin2 was 28% in the fourth quarter of 2022 and 2021 as AV revenue growth was offset by higher production and personnel costs.

United States

Segment revenue in the fourth quarter of 2022 increased by 77% to €41.2 million compared with the fourth quarter of 2021. This growth was driven by an increase in cross-selling non-data products to betting operators as well as benefiting from growth in the underlying betting market due to new states legalizing betting.

Segment Adjusted EBITDA2 in the fourth quarter of 2022 was €4.3 million compared with a loss of (€7.6) million in the fourth quarter of 2021, primarily driven by enhanced operating leverage as a result of the growing scale of the business despite continuous investments in the U.S. segment's products and content portfolio. Segment Adjusted EBITDA margin2 improved to 11% from (33%) compared with the fourth quarter of 2021.

Costs and Expenses

Purchased services and licenses in the fourth quarter of 2022 increased by €14.9 million to €48.4 million compared with the fourth quarter of 2021, reflecting continuous investments in content creation, greater event coverage and higher scouting costs. Of the total purchased services and licenses, approximately €10.0 million was expensed sports rights.

Personnel expenses in the fourth quarter of 2022 increased by €34.0 million to €81.0 million, an increase of 72% compared with the fourth quarter of 2021. The increase was driven by acquisition costs of €9.0 million, a one-time cost of €5.0 million as a result of management restructuring as well as increased headcount associated with our investments in AI and Computer Vision, and inflationary adjustments for labor costs.

Other Operating expenses in the fourth quarter of 2022 increased by €7.7 million to €34.9 million, an increase of 28%, compared with the fourth quarter of 2021 primarily as a result of €13.0 million non-recurring litigation costs. Excluding this litigation cost, operating expenses decreased, compared with the fourth quarter of 2021.

Total sports rights costs in the fourth quarter of 2022 increased by €11.2 million to €49.7 million compared with the fourth quarter of 2021, primarily a result of newly acquired rights in 2022 for ITF and UEFA, as well as increased sports rights costs related to the NHL.

Recent Company Highlights

Sportradar has been selected as the successful bidder for the global Association of Tennis Professionals (ATP) data and streaming rights starting in 2024 as a result of the Company’s commitment to product innovation for the downstream market and unrivalled development in advanced technologies such as computer vision and AI, in addition to its industry leading integrity services. The Company has been a supplier of official ATP Tour and Challenger Tour secondary data feeds since 2022.

Sportradar launched its artificial intelligence (AI) driven Computer Vision technology for table tennis. The Company’s AI has been trained to understand the rules of table tennis and automate data capture by analyzing 120 frames per second. Computer Vision provides a 100-fold increase in the level of statistics and data point captured.

Sportradar announced the launch of Insight Tech Services, a suite of standalone AI led solutions for in-house use by sportsbook operators to optimize the performance of their trading, risk management and marketing functions. Insight Tech Services is a complement to Sportradar’s Managed Trading Services (MTS), allowing the sports technology company to support all sportsbook operating in the marketplace.

Sportradar signs expanded agreement with Betway. Building on the current agreement focused on sports betting services, Betway has now partnered with Sportradar to utilize both ad:s, multi-channel performance marketing platform, and its Audio Visual (AV) services, featuring a global portfolio of live streaming sports content.

Sportradar launches Athlete Wellbeing documentary-style video, detailing how legal sports betting may impact the mental health of athletes. Sportradar’s Athlete Wellbeing program provides resources and support to assist partners in educating their athletes about any potential harm associated with sports betting and sheds light on the potential impact of sports betting on athletes. Athlete Wellbeing is a part of Sportradar’s overall Integrity Services strategy of protecting the integrity of sporting competitions through monitoring, investigation and education.

Sportradar awarded Temporary Massachusetts Sportswagering License. Sportradar now holds 44 licenses, or equivalent, in North America across U.S. states, territories, tribes and Canada.

The Company continued to optimize its organization around content creation, product development, commercial excellence, and strengthen its management team and recently appointed Severine Riviere-Gerstner as the new Chief People Officer.