Following the Q3 report that Genius Sports published earlier today, the supplier held an earnings call to discuss some of the finer points of business operations.
This quarter was no doubt a successful one revenue-wise for Genius Sports, with revenue up 29% when compared to year-on-year, while adjusted EBITDA was up 131%.
But the company still reported a net loss of $11.6m, meaning this was another quarter for the organisation without profit.
Genius Sports explained that not only did the $116m of cash on the balance sheet represent how strongly the business is achieving its goals, but more importantly a positive cash flow.
This has led the company to expect a free-cash flow to be reported at the end of H2 2023, as well as achieving its anticipated EBITDA.
The leadership team at Genius Sports also introduced some of its core business ideas on how it managed to become, but also stay, successful in infiltrate the data technology field.
By becoming “more deeply ingrained” in the sports broadcast and sports betting industries, through partnerships and broadcasting features, the company has made itself “sticky.”
By spreading the honey on the proverbial sports betting tree, Genius Sports is now “augmenting every NFL game, on one platform or another,” through integrated bet slips, statistical insights and real-time, low latency streams.
“As for the business, we feel we’re right-sized” - Genius Sports
Not only has the company reported increased betting volume through this, but also the amount of in-game wagering; which is particularly important when you look at the figures that show that in-play betting accounts for 3x the amount of pre-play betting figures.
During the first four weeks of the 2023 NFL season, one partner who offered BetVision on its platform reported that 54% of bets were made by in-play bets, while 83% of the handle was from in-play.
This represents a 121% in-play handle increase and an 87% increase in total handle per customer.
The leadership team in the call also mentioned that the Media Technology, Content and Services vertical was slightly behind Q3 guidance - reporting at $23m rather than the expected $24m - because several sports companies had pulled their campaigns forward into Q2 this year.
More recently, though, the Hard Rock mobile sports betting app launched a week ago, which was supported by Genius Sports.
Although the app was allowed to relaunch in the state of Florida, there was one stipulation; that it could only be downloaded by customers who had downloaded the app before it was previously shut down.
However, it wasn’t just the US markets that saw positive trends this quarter, as Genius Sports also reported several successes on its dealings in Europe too.
First of all, business in both the US and EU was up 30% when compared year-on-year, which was due to the pricing in EU markets, new products, a “tailwind of foreign exchange” and several major events.
“We don’t need to do any more rights deals, we already have everything we need” - Genius Sports
The first of these, the Rugby World Cup, was the 10th event of its kind and ran from 8 September to 28 October, with a decisive victory from South Africa seeing the team take its fourth title.
As part of this, Genius Sports developed the first official Rugby World Cup Fantasy Game, through its partnership with the league.
In a similar event, the Ryder Cup was held in Italy between 29 September and 1 October, with Genius Sports once again developing a product for it; this time the Ryder Cup Game Zone, an interactive gamified hub for fans.
Also, through the Data Zone, the English Premier League can show in-game statistics to people watching the stream, such as player names and statistics.
All in all, Genius Sports said that the “initial results in September were very encouraging” when it came to its BetVision product.
The topic of changes in the leadership team was also brought up, with several key board members expected to leave within the next few months.
In response, Genius Sports called this a “natural transition” that was part of the business “maturing as a public company”.
One of the most recent announcements regarding this was the appointment of Manny Puentes, former MediaMath Chief Technology Officer, who would join Genius Sports as General Manager of Advertising.
“Manny’s a great hire and we’re really looking forward to working with him” - Genius Sports
On the topics of handling business, the company also discussed the future of using AI products in sports broadcasting and betting data technology.
Genius Sports noted that several companies have started to look into developing machine learning for the industry, but realised just how expensive the technology actually is. For reference, Genius Sports admitted that it invested around $250m into the development of the machine learning used in Second Spectrum.
However, this has created a great synergy alongside other augmented products, as the combination can lead to the natural generation of additional content. This is used by both fans who are watching the live streams of the sports as well as bookmakers, which then leads to an increase in revenue for Genius Sports.
“2024 will be a highly predictable year for us” - Genius Sports
Looking forward, the company believes that 2024 should be a relatively stable year for the company.
The incoming year should see an important cycle of NFL contract renewals with US sportsbooks, as well as the launch of additional products.
While Genius Sports said it plans to “live within its means” in 2024, it also noted that it would be a year of “known unknowns”... which would only become known knowns further into the year.
