In a significant surge of financial success, Sportradar has triumphantly approached the upper echelon of its full-year 2023 revenue guidance. The data analytics firm saw its revenue climb by an impressive 20.2% year-on-year to €877.6m. Initially, the company had forecasted its revenue to fall in the range of €870m to €880m, a target that has almost been surpassed, thanks to substantial growth in both the US market and other global sectors.
In the US alone, revenue soared by 30.0%, while the rest of the world category witnessed an increase of 20.0%. This acceleration in revenue has also propelled Sportradar’s profit from continuing operations to a striking €34.6m, marking a whopping 229.5% increase from 2022’s total profit of €10.5m. The company’s financial prowess is further underscored by its adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA), which increased by 32.6% year-on-year to €166.8m, narrowly missing the top end of the outlook range of €162m-€167m.
The adjusted EBITDA margin also experienced an ascent, jumping 177 basis points from the previous year to reach 19.0%. Sportradar attributes this financial windfall to the robust operating leverage gained from prudent management of sports rights and personnel costs.
As the company closed the books on 31 December 2023, it reported an impressive €497.2m in available liquidity, complimented by undrawn credit facilities, and cash and cash equivalents standing firm at €277.2m. Riding this wave of fiscal strength, Sportradar has also announced an authorization for a substantial share buyback program valued at €200m.
Carsten Koerl, Sportradar’s chief executive, praised the company’s stellar performance, remarking, “2023 was another dynamic and successful year for the company delivering our third consecutive year of more than 20% revenue growth, improved profitability, and margin expansion.” Koerl attributed this sustained growth to their comprehensive content portfolio, and innovative product initiatives, alongside sophisticated technology capabilities.
Despite such successes in 2023, Sportradar could not entirely replicate the performance of the previous year, when it surpassed its annual revenue outlook range of €718m-€723m by achieving €730.2m.
The company’s financial achievements in FY2023, especially its ability to meet its adjusted EBITDA guidance, owe a lot to an outstanding fourth quarter. During this period, Sportradar recorded double-digit growth in key financial measures and shifted towards profitability compared to the same quarter in the previous year.
The fourth quarter saw a 22.4% year-on-year increase in revenue, reaching €252.6m thanks to growth across all segments, while adjusted EBITDA rose by 12.5% to €39.5m. This surge in performance translated into a remarkable profit from continuing operations of €23.2m, a significant turnaround from the €33.3m loss recorded in the prior year’s comparable quarter. Adjusted EBITDA margin, however, dropped slightly from 17% to 16% in 2023, but Sportradar’s customer net retention rate of 111% in Q4 highlighted the company’s strong client relationship across its service spectrum.
In terms of geographical performance, the US continued to be a key growth driver, despite Sportradar not being able to match the previous year’s 78% revenue surge. Nonetheless, US revenue in Q4 still registered a healthy 28.2% year-on-year increase to €52.7m. Sportradar credited this performance to robust market dynamics, the sale of additional services to existing clients, and its solidifying partnership with the National Basketball Association (NBA). Deals inked with BetMGM and direct integration of betting features into the NBA’s League Pass streaming service reflect Sportradar’s expanding influence in the American sports data market.
Despite the buoyancy in US revenue, the increased investment associated with strengthening its NBA partnership resulted in a Q4 adjusted EBITDA loss of €1.5m in the US sector, compared to a €4.3m profit a year earlier. However, the investment is seen as a strategic step towards future profitability in the US.
Growth was not just confined to the US, as other regions also saw substantial gains. Q4 revenue from Sportradar’s rest of world betting segment jumped by 24.6% to €132m, bolstered by a 48.0% rise in sales of its Managed Betting Services (MBS) solution and a 21.0% growth in live odds services. Correspondingly, adjusted EBITDA for this sector grew by 19% to €55m. Audiovisual segment revenue grew by 19.8% to €50m in the rest of the world, thanks to additional rights, including those from the NBA and CONMEBOL, though adjusted EBITDA saw a slight dip from the previous year.
The year 2023 was marked by strategic maneuvers, including a four-year extension with NASCAR, renewal of the deal with Caesars Sportsbook, and a global data and streaming rights agreement with Tennis Data Innovations.
To cap off an already successful year, Sportradar is aiming for another 20.0% year-on-year growth in revenue and adjusted EBITDA for its 2024 financial year, setting potential revenue targets of at least €1.05bn and adjusted EBITDA of at least €200m, assuming a Euro to US dollar exchange rate of 1.07. The company is also striving to maintain a stable adjusted EBITDA margin of 19.0%, consistent with the FY2023 performance but an advance from Q4’s 16.0%.
Koerl expressed confidence in the company’s future: “For 2024, we plan to continue to scale our business globally, targeting at least 20% growth in revenue and adjusted EBITDA. We remain laser-focused on disciplined execution of our growth strategy and delivering tremendous value for our clients and our shareholders.” With a combination of strategic expansion and a commitment to operational excellence, Sportradar is set to remain a formidable presence in the sports data sector.
