Le Lézard
Classified in: Science and technology, Business, Sports and recreation, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Genius Sports Reports Third Quarter Results Ahead of Expectations and Raises Full-Year Revenue and Group Adj. EBITDA Guidance


Genius Sports Limited (NYSE:GENI) ("Genius Sports" or the "Group"), the official data, technology and broadcast partner that powers the global ecosystem connecting sports, betting and media, today announced financial results for its fiscal third quarter ended September 30, 2023.

"Our consistent outperformance reflects the execution of our core strategy as we continue to develop and distribute innovative technology across the sports ecosystem, enabling success for our partners, and further solidifying our long-term strategic position," said Mark Locke, Genius Sports Co-Founder and CEO. Nick Taylor, Genius Sports CFO, added, "We have reached a critical turning point in our business as we have realized consistent margin expansion in each quarter this year and now have much higher visibility into our long-term model following the renewals and extensions of key rights partnerships."

$ in thousands

Q323

Q322

%

Group Revenue

101,729

78,650

29.3%

Betting Technology, Content & Services

65,927

49,156

34.1%

Media Technology, Content & Services

22,938

17,931

27.9%

Sports Technology & Services

12,864

11,563

11.3%

Group Net loss

(11,616)

(8,967)

(29.5%)

Group Adjusted EBITDA

17,695

7,658

131.1%

Group Adjusted EBITDA Margin

17.4%

9.7%

7.7%

$ in thousands

YTD23

YTD22

%

Group Revenue

285,805

235,690

21.3%

Betting Technology, Content & Services

187,529

143,708

30.5%

Media Technology, Content & Services

63,059

57,059

10.5%

Sports Technology & Services

35,217

34,923

0.8%

Group Net loss

(47,082)

(53,920)

12.7%

Group Adjusted EBITDA

41,387

13,127

215.3%

Group Adjusted EBITDA Margin

14.5%

5.6%

8.9%

Q3 2023 Financial Highlights

Q3 2023 Business Highlights

Financial Outlook

Genius expects to generate Group Revenue of approximately $412 million and Group Adjusted EBITDA of approximately $53 million in 2023. The Company is also reaffirming its expectation to generate positive free-cash-flow in the second half of 2023.

$ in millions

Q1 2023A

Q2 2023A

Q3 2023A

Q4 2023E

FY 2023E

Group Revenue

97

87

102

126

412

Betting Technology, Content & Services

65

57

66

80

268

Media Technology, Content & Services

22

18

23

31

94

Sports Technology & Services

11

12

13

15

50

Group Adjusted EBITDA

8

16

18

11

53

Note: values may not add up due to rounding

Financial Statements & Reconciliation Tables

Genius Sports Limited

Condensed Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2023

 

2022

 

2023

 

2022

Revenue

 

$ 101,729

 

$ 78,650

 

$ 285,805

 

$ 235,690

Cost of revenue

 

77,446

 

72,821

 

227,316

 

236,013

Gross profit (loss)

 

24,283

 

5,829

 

58,489

 

(323)

Operating expenses:

 

 

 

 

 

 

 

 

Sales and marketing

 

5,827

 

6,207

 

19,807

 

24,412

Research and development

 

6,115

 

8,105

 

18,196

 

23,230

General and administrative

 

20,399

 

24,878

 

58,091

 

89,964

Transaction expenses

 

832

 

-

 

2,156

 

128

Total operating expense

 

33,173

 

39,190

 

98,250

 

137,734

Loss from operations

 

(8,890)

 

(33,361)

 

(39,761)

 

(138,057)

Interest income (expense), net

 

1,157

 

(367)

 

1,373

 

(1,133)

Loss on disposal of assets

 

(10)

 

(164)

 

(32)

 

(171)

(Loss) gain on fair value remeasurement of contingent consideration

 

-

 

-

 

(2,809)

 

4,408

Change in fair value of derivative warrant liabilities

 

-

 

(2,224)

 

(534)

 

11,196

(Loss) gain on foreign currency

 

(4,210)

 

25,548

 

(1,913)

 

68,302

Total other (expense) income

 

(3,063)

 

22,793

 

(3,915)

 

82,602

Loss before income taxes

 

(11,953)

 

(10,568)

 

(43,676)

 

(55,455)

Income tax expense

 

(1,163)

 

(229)

 

(5,763)

 

(744)

Gain from equity method investment

 

1,500

 

1,830

 

2,357

 

2,279

Net loss

 

$ (11,616)

 

$ (8,967)

 

$ (47,082)

 

$ (53,920)

Loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

Basic and diluted

 

$ (0.06)

 

$ (0.04)

 

$ (0.23)

 

$ (0.27)

Weighted average common stock outstanding:

 

 

 

 

 

 

 

 

Basic and diluted

 

208,757,564

 

200,142,706

 

207,832,739

 

198,099,515

Genius Sports Limited

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share data)

 

 

 

 

 

(Unaudited)

 

 

 

September 30

 

December 31

 

2023

 

2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$ 91,992

 

$ 122,715

Restricted cash, current

-

 

12,102

Accounts receivable, net

61,663

 

33,378

Contract assets

43,220

 

38,447

Prepaid expenses

50,055

 

28,207

Other current assets

1,131

 

1,668

Total current assets

248,061

 

236,517

Property and equipment, net

11,437

 

12,881

Intangible assets, net

134,760

 

149,248

Operating lease right of use assets

8,077

 

6,459

Goodwill

312,396

 

309,894

Investments

24,677

 

23,682

Restricted cash, non-current

24,399

 

24,203

Other assets

8,392

 

10,453

Total assets

$ 772,199

 

$ 773,337

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$ 43,703

 

$ 33,121

Accrued expenses

66,005

 

56,956

Deferred revenue

41,344

 

41,273

Current debt

7,301

 

7,405

Derivative warrant liabilities

-

 

6,922

Operating lease liabilities, current

3,400

 

3,462

Other current liabilities

12,980

 

22,001

Total current liabilities

174,733

 

171,140

Long-term debt ? less current portion

23

 

7,088

Deferred tax liability

15,826

 

15,009

Operating lease liabilities, non-current

4,177

 

3,284

Total liabilities

194,759

 

196,521

Commitments and contingencies (Note 16)

 

 

 

Shareholders' equity

 

 

 

Common stock, $0.01 par value, unlimited shares authorized, 213,027,402 shares issued and 208,921,454 shares outstanding at September 30, 2023; unlimited shares authorized, 201,853,695 shares issued and outstanding at December 31, 2022

2,130

 

2,019

B Shares, $0.0001 par value, 22,500,000 shares authorized, 18,500,000 shares issued and outstanding at September 30, 2023 and December 31, 2022

2

 

2

Additional paid-in capital

1,630,132

 

1,568,917

Treasury stock, at cost, 4,105,948 shares at September 30, 2023; nil shares at December 31, 2022

(17,653)

 

-

Accumulated deficit

(986,035)

 

(938,953)

Accumulated other comprehensive loss

(51,136)

 

(55,169)

Total shareholders' equity

577,440

 

576,816

Total liabilities and shareholders' equity

$ 772,199

 

$ 773,337

Genius Sports Limited

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)

 

 

Nine Months Ended

 

 

September 30

 

September 30

 

 

2023

 

2022

Cash Flows from operating activities:

 

 

 

 

Net loss

 

$ (47,082)

 

$ (53,920)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

53,025

 

51,422

Loss on disposal of assets

 

32

 

171

Loss (gain) on fair value remeasurement of contingent consideration

 

2,809

 

(4,408)

Stock-based compensation

 

19,248

 

78,647

Change in fair value of derivative warrant liabilities

 

534

 

(11,196)

Non-cash interest expense, net

 

187

 

526

Non-cash lease expense

 

2,941

 

4,896

Loss on lease abandonment

 

-

 

281

Amortization of contract cost

 

743

 

652

Deferred income taxes

 

710

 

(60)

Provision for doubtful accounts

 

1,441

 

696

Gain from equity method investment

 

(2,357)

 

(2,279)

Loss (gain) on foreign currency remeasurement

 

1,224

 

(55,638)

Changes in operating assets and liabilities

 

 

 

 

Accounts receivable

 

(32,285)

 

5,360

Contract asset

 

(4,555)

 

(15,434)

Prepaid expenses

 

(22,056)

 

(22,074)

Other current assets

 

562

 

2,824

Other assets

 

1,547

 

(4,669)

Accounts payable

 

10,529

 

13,350

Accrued expenses

 

8,767

 

(7,912)

Deferred revenue

 

(268)

 

17,938

Other current liabilities

 

(1,865)

 

10,979

Operating lease liabilities

 

(2,982)

 

(5,177)

Other liabilities

 

-

 

(10,109)

Net cash used in operating activities

 

(9,151)

 

(5,134)

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

(2,480)

 

(3,913)

Capitalization of internally developed software costs

 

(33,004)

 

(31,304)

Distributions from (contribution to) equity method investments

 

1,555

 

(7,871)

Equity investments without readily determinable fair values

 

-

 

(150)

Purchases of intangible assets

 

(240)

 

-

Acquisition of business, net of cash acquired

 

-

 

(20)

Proceeds from disposal of assets

 

53

 

131

Net cash used in investing activities

 

(34,116)

 

(43,127)

Cash flows from financing activities:

 

 

 

 

Repayment of loans and mortgage

 

(16)

 

-

Proceeds from exercise of Public Warrants

 

6,812

 

-

Repayment of promissory notes

 

(7,387)

 

-

Net cash used in financing activities

 

(591)

-

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

1,229

(23,722)

Net decrease in cash, cash equivalents and restricted cash

 

(42,629)

(71,983)

Cash, cash equivalents and restricted cash at beginning of period

 

159,020

222,378

Cash, cash equivalents and restricted cash at end of period

 

$ 116,391

$ 150,395

Supplemental disclosure of cash activities:

 

 

 

Cash paid during the period for interest

 

$ 3

 

$ 607

Cash paid during the period for income taxes

 

$ 4,132

 

$ 1,626

Supplemental disclosure of noncash investing and financing activities:

 

 

 

 

Acquisition of common shares by subsidiary in connection with warrant redemptions

 

$ 17,653

 

$ -

Promissory notes arising from equity method investments

 

$ -

 

$ 14,688

Issuance of common stock in connection with business combinations

 

$ 10,157

 

$ 17,452

Genius Sports Limited

Reconciliation of U.S. GAAP Net loss to Adjusted EBITDA

(Unaudited)

(Amounts in thousands)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2023

2022

 

2023

2022

 

 

(dollars, in thousands)

 

(dollars, in thousands)

 

Consolidated net loss

$ (11,616)

$ (8,967)

 

$ (47,082)

$ (53,920)

 

Adjusted for:

 

 

 

 

 

 

Net, interest (income) expense

(1,157)

367

 

(1,373)

1,133

 

Income tax expense

1,163

229

 

5,763

744

 

Amortization of acquired intangibles (1)

10,321

9,604

 

30,171

30,521

 

Other depreciation and amortization (2)

7,942

7,273

 

23,597

21,553

 

Stock-based compensation (3)

5,063

17,970

 

19,392

78,747

 

Transaction expenses

832

-

 

2,156

128

 

Litigation and related costs (4)

21

2,355

 

1,413

11,600

 

Change in fair value of derivative warrant liabilities

-

2,224

 

534

(11,196)

 

Loss (gain) on fair value remeasurement of contingent consideration

-

-

 

2,809

(4,408)

 

Loss (gain) on foreign currency

4,210

(25,548)

 

1,913

(68,302)

 

Other (5)

916

2,151

 

2,094

6,527

 

Adjusted EBITDA

$ 17,695

$ 7,658

 

$ 41,387

$ 13,127

 

(1)

Includes amortization of intangible assets generated through business acquisitions, inclusive of amortization for data rights, marketing products, and acquired technology.

(2)

Includes depreciation of Genius' property and equipment, amortization of contract cost, and amortization of internally developed software and other intangible assets. Excludes amortization of intangible assets generated through business acquisitions.

(3)

Includes restricted shares, stock options, equity-settled restricted share units, cash-settled restricted share units and equity-settled performance-based restricted share units granted to employees and directors (including related employer payroll taxes) and equity-classified non-employee awards issued to suppliers.

(4)

Includes mainly legal and related costs in connection with non-routine litigation matters including Sportradar litigation and BetConstruct litigation.

(5)

Includes expenses incurred related to earn-out payments on historical acquisitions, gain/losses on disposal of assets and severance costs.

Webcast and Conference Call Details

Genius Sports management will host a conference call and webcast today at 8:00AM ET to discuss the Company's third quarter results.

The conference call may be accessed by dialing (646) 307-1963.

A live audio webcast may be accessed on the Company's investor relations website at investors.geniussports.com along with Genius' earnings press release and related materials. A replay of the webcast will be available on the website within 24 hours after the call.

About Genius Sports

Genius Sports is the official data, technology and broadcast partner that powers the global ecosystem connecting sports, betting and media. Our technology is used in over 150 countries worldwide, creating highly immersive products that enrich fan experiences for the entire sports industry.

We are the trusted partner to over 400 sports organizations, including many of the world's largest leagues and federations such as the NFL, EPL, FIBA, NCAA, NASCAR, AFA and Liga MX.

Genius Sports is uniquely positioned through cutting-edge technology, scale and global reach to support our partners. Our innovative use of big data, computer vision, machine learning, and augmented reality, connects the entire sports ecosystem from the rights holder all the way through to the fan.

Non-GAAP Financial Measures

This press release includes non-GAAP financial measures not presented in accordance with U.S. GAAP. A reconciliation of the most comparable GAAP measure to its non-GAAP measure is included above.

Adjusted EBITDA

We present Group adjusted EBITDA and Group adjusted EBITDA margin, non-GAAP performance measures, to supplement our results presented in accordance with U.S. GAAP. Group adjusted EBITDA is defined as earnings before interest, income tax, depreciation and amortization and other items that are unusual or not related to our revenue-generating operations, including stock-based compensation expense (including related employer payroll taxes), change in fair value of derivative warrant liabilities and remeasurement of contingent consideration. Group adjusted EBITDA margin is calculated as Group adjusted EBITDA divided by Group revenue.

Group adjusted EBITDA and Group adjusted EBITDA margin are used by management to evaluate our core operating performance on a comparable basis and to make strategic decisions. We believe Group adjusted EBITDA and Group adjusted EBITDA margin are useful to investors for the same reasons as well as in evaluating our operating performance against competitors, which commonly disclose similar performance measures. However, our calculation of Group adjusted EBITDA and Group adjusted EBITDA margin may not be comparable to other similarly titled performance measures of other companies. Group adjusted EBITDA and Group adjusted EBITDA margin are not intended to be a substitute for any U.S. GAAP financial measure.

We do not provide a reconciliation of Group adjusted EBITDA to consolidated net income/(loss) on a forward-looking basis because we are unable to forecast certain items required to develop meaningful comparable GAAP financial measures without unreasonable efforts. These items are difficult to predict and estimate and are primarily dependent on future events. The impact of these items could be significant to our projections.

Constant Currency

Certain income statement items in this press release are discussed on a constant currency basis. Our results between periods may not be comparable due to foreign currency translation effects. We present certain income statement items on a constant currency basis, as if GBP:USD exchange rate had remained constant period-over-period, to enhance the comparability of our results. We calculate income statement constant currency amounts by taking the relevant average GBP:USD exchange rate used in the preparation of our income statement for the more recent comparative period and apply it to the actual GBP amount used in the preparation of our income statement for the prior comparative period.

Constant currency amounts only adjust for the impact related to the translation of our consolidated financial statements from GBP to USD. Constant currency amounts do not adjust for any other translation effects, such as the translation of results of subsidiaries whose functional currency is other than GBP or USD.

Forward-Looking Statements

This press release contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve significant risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements include information about our possible or assumed future results of operations or our performance. Words such as "expects," "intends," "plans," "believes," "anticipates," "estimates," and variations of such words and similar expressions are intended to identify such forward looking statements. Although we believe that the forward-looking statements contained in this press release are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to: the effect of COVID-19 on our business, risks related to our reliance on relationships with sports organizations and the potential loss of such relationships or failure to renew or expand existing relationships; fraud, corruption or negligence related to sports events, or by our employees or contracted statisticians; risks related to changes in domestic and foreign laws and regulations or their interpretation; compliance with applicable data protection and privacy laws; pending litigation and investigations; the failure to protect or enforce our proprietary and intellectual property rights; claims for intellectual property infringement; our reliance on information technology; risks related to our ability to achieve the anticipated benefits from the business combination with dMY Technology Group, Inc. II; and other factors included under the heading "Risk Factors" in our Annual Report on Form 20-F filed with the SEC on March 30, 2023.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements contained herein, to reflect any change in our expectations with respect to such statements or any change in events, conditions or circumstances upon which any statement is based.


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