Genius Sports Q3 sales up 14%, U.S. operations triple –

Genius Sports said its U.S. operations tripled in the third quarter compared to 2021, as the sports data and analytics business beat Wall Street’s sales and earnings expectations.

The company said it generated $235.7 million in revenue in the quarter ended Sept. 20. $30, up 14% year over year, beating management’s earlier guidance of $231 million. Genius posted a net loss of 4 cents a share, beating analysts’ expectations for a loss of 7 cents a share, according to data compiled by Thomson Reuters.

“This year has been characterized by strong execution as we continue to deploy innovative technologies, win new customers, and strengthen our key partnerships across the sports, betting, media and broadcast ecosystems,” said Mark Genius founder and CEO. Locke said in a press release this morning. “We remain on track to meet our full-year targets set at our investor day in early 2022.”

While Genius’s main business is betting on technology, content and services (63% of its revenue), its media business showed the best strength during the period. Sales in this business line rose 29% in the quarter to $17.9 million and 83% for the full year. Its media segment provides programmatic advertising services that enable clients to target ideal groups of consumers on websites and social media. The company said growth in this business line was primarily organic, thanks to the addition of some new customers.

Investors punish sports betting stocks every year for fear of stock market valuations and dissatisfaction with high payouts across the industry. Genius has struggled to meet Wall Street’s demands for such businesses to show financial progress, with the company aiming to be profitable on adjusted EBITDA (earnings before interest, tax, depreciation and amortization) this year. According to this metric, Genius’ quarterly results were positive, with adjusted EBITDA revenue of $7.7 million, compared with a loss a year ago. For the first three quarters of 2022, the business posted total sales of $235.7 million, up 32% from a year earlier, adjusted EBITDA of $13.1 million, and a net loss of 37 cents, compared with a loss of $4.02 in 2021.

Many fast-growing, technology-focused businesses emphasize adjusted EBITDA as their go-to measure of business health. In Genius’ case, it adjusted EBITDA by adding stock-based compensation, litigation costs, listing transaction fees, changes in the value of stock warrants from the previous quarter, and foreign exchange losses. The last item, in particular, hampered top-line results, as a stronger dollar reduced non-U.S. sales when translated into U.S. dollars. On a constant currency basis, sales rose 28% in the quarter.

For full-year 2022, Genius said it expects total revenue to be between $430 and $440 million, even with currency headwinds. Shares of the company closed Wednesday at $4.62, down 39% for 2022.

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