Sports data and analytics firm Genius Sports says the coming two years should see its revenue hit at least $430 million in 2023, up 64% from 2021, while declaring management’s preferred measure of financial performance will show profitability from now on. The announcement came as Genius discussed its business on a web-based investor presentation today.
“This morning we are walking the market through Genius’ strong position in the global sports media and technology ecosystem, and how we are well-positioned to benefit from—and ultimately drive—this industry’s rapid growth,” said Genius founder and CEO Mark Locke, in a statement.
Locke said the business will show profit in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) starting with 2022 and expanding to as much as $50 million in 2023. EBITDA is a measure of financial growth that implies future profitability and is often a preferred metric with technology companies yet to turn a bottom-line profit. Genius adjusts its EBITDA to strip out accounting costs from stock grants and other items it considers not reflective of its core businesses: providing data for sports betting, sports technologies and media services, such as advertising.
The company has yet to announce results for the fourth quarter of 2021, which concluded with the calendar year. Genius had previously guided for full year 2021 revenue of $262 million. For this year, the business forecasts what would be 30% sales growth to about $340 million, nearly two-thirds of which should come from its betting technology and content services. The overall franchise should generate adjusted EBITDA of $15 million this year.
The effort couldn’t swim against the tide of another bearish day for tech stocks, however. Genius shares lost 6.5% to close Friday at $5.85. That’s likely not an judgment on the content, however, since investor days are directed to long-term institutional investors, who tend to be buyers in the days and weeks following investor confabs.
The stock market has been treating growth stocks such as Genius harshly in recent weeks, and Genius’ late November earnings report sparked a sell-off that drove its shares to a low of $5.85 Tuesday, down from a high of $24.93 last year, shortly after the London-based company closed its going-public merger with a special purpose acquisition company. Other sports betting-related companies, including DraftKings and Penn National Gaming, have suffered similar declines over the same period.
As part of its efforts to explain to Wall Street its business model and outlook, the company had licensing partners discuss efforts, in addition to the management presentations typical of investor days. Highlighting the slate was the NFL’s Brian Rolapp, chief media and business officer of the league, which owns rights to 18.6 million shares through its data deal with Genius.
“Year 1 has been a tremendous success for us, and Genius and has exceeded all of our expectations,” said Rolapp, in a statement. “This is much more than betting for us. Betting is an important part, but this is more about serving fans and helping them be engaged and retained in our sport 365 days per year. Key to sports in the future and the key to the NFL’s future is finding partners who can take a mass sport and serve the masses but also do it in a highly personalized way.”
Also speaking in the presentation were executives from the English Premier League, Sky Betting and Gaming, Apax Partners and Genius’ North America president, Steve Bornstein.
(This article has been updated to include Genius’ closing Friday share price in the fifth paragraph.)
