Sportradar: Strong Q1 2022 Revenue Growth Offset by Expenses

Sportradar Group, the Swiss-based sports data, technology and content company, released its first quarter 2022 financial results posting a decrease in profit despite the strong revenue growth.

Revenue across Segments

For the three months ended March 31, 2022, Sportradar registered €167.9 million ($176.3 million) in revenue, up 31% on €128.5 million ($134.9 million) the number one provider of business-to-business solutions to the global sports betting industry accounted for in Q1 2021. Sportradar said all segments of the business generated growth in the quarter.

Operations in the US jumped by 124% to €25.7 million ($27 million) driven by the increased sales of betting services mainly due to more states legalizing sports betting. The business also experienced an increase in sales to media companies and a positive impact from the acquisition of Synergy Sports.

Sportradar generated revenues of €86.7 million ($91 million) and €45.9 million ($48.2 million) from operations in the rest of the world (RoW) across betting and audiovisual, respectively, representing increases of 25% and 17% year-over-year.

RoW Betting growth was driven by the 51% increase in Managed Betting Services sales to €26.4 million ($27.7 million) and the 16% increase in Live Data/ Odds Services sales to €46.8 million ($49.1 million), while RoW Audiovisual growth was attributed to increased content from Tennis Australia and the NHL and upselling content from the Synergy Sports acquisition.

Costs and Expenses

On the expenditure side, the first quarter for Sportradar ended with significant cost and expenses increases across the board ranging from 32% to 35% which impacted adjusted EBITDA and led it to a decrease of 5% to €26.7 million from €28.2 million in the respective quarter of the previous year.

Personnel expenses grew by 35% to €52.3 million ($54.9 million) primarily due to the additional hires at the company. By the end of Q1 2022, there were 620 people more as compared to Q1 2021 to a total of 3,075 full-time employees.

Other operating expenses grew by almost 35% to €19.5 million ($20.5 million) driven up by “higher costs associated with being a public company, and the reversal of temporary COVID-19 related cost savings” as compared to the previous year, Sportradar explained.

Total Sport rights cost increased to €54 million ($56.7 million) in the reported quarter to post an increase of 32% on €40.9 million ($42.9 million) reported in the first quarter of 2021. Sportradar justified this increase with the new rights for ICC, UEFA, and ATP and the “normalized schedule in the NBA, NHL and MLB due to the easing of restrictions.

Adjusted EBITDA margin, the ratio of profit to revenue, decreased from 22% in Q1 2021 to 16% in the reported quarter.

Cash and cash equivalents at the end of Q1 2022 totaled €715.5 million ($751.3 million), rising to €825.5 million ($866.8 million) when adding undrawn credit facilities. Sportradar reiterated its 2022 revenue and adjusted EBITDA guidance, with revenue expected to be in the range of €665 million ($698.2 million) to €700 million ($735 million), equaling a growth of between 18% and 25%, while adjusted EBITDA is expected to be in the range of €123 million ($129.2 million) to €133 million ($139.6 million), a growth of 21% to 30%.