Sportradar Group revenue rose 30% in 2022 to €730.2 million ($781.3 million), benefitting from gains in U.S. sports betting and World Cup-assisted strength throughout the rest of the world. The results, announced Wednesday morning, slightly exceeded a raised forecast by the company given after the third quarter.
“We delivered on what we promised, and that’s very important for me and the whole team,”” Sportradar CEO Carsten Koerl said on a video call. “It was not an easy year to deliver on what we gave as guidance.”
In particular, the company had to relocate some operations due to Russia’s invasion of Ukraine, while double-digit war-related inflation spiked employee costs in European countries, including Estonia, Koerl said.
Sales growth was even faster in the fourth quarter, with total revenue rising 35% over the prior-year period to €206.3 million ($220.7 million). U.S. revenue was up 77% from general market growth and the increased adoption of in-play wagering. The rest-of-the-world betting segment generated most of Sportradar’s revenue—€105.9 million ($111.3 million), up 29%, thanks in part to soccer’s World Cup boosting managed-betting services.
The company posted net income for the year of €10.5 million, down 18%, including a swing to a net loss in the fourth quarter of €33.3 million. Increased personnel costs both from compensating employees for inflation and adding headcount for AI and computer-vision efforts contributed much of the higher expenses. Sports rights also saw higher costs from acquiring new rights to UEFA soccer and the International Tennis Federation, as well as higher expenses for NHL rights, according to the company.
Even with economic headwinds, Sportradar sounded an optimistic note for 2023, saying it now expects sales this year to come in about 25% higher, between €902 and €920 million ($965 to $984 million). Consensus of Wall Street analysts had been 2023 revenue of €879 million, according to data compiled by S&P Capital IQ.
“There are two things I think are important: The Rest of the World betting segment delivers very high margins and stable growth … in general sports betting worldwide is projected to grow 11% over the next five, six years, and historically Sportradar was always able to outperform the market,” Koerl said about the brightened outlook. The key to outpacing general betting growth is moving its customers up the value chain of its services.
“The second big driver is the U.S. market where we have a shift from pre-match to live betting, which is very beneficial for us,” Koerl said on the video call. “We also have in the U.S. more and more states, and more and more users for sports betting, which is helpful from a distribution perspective.”
Wall Street appeared to be of two minds on Sportradar results, rallying shares 5% higher in early trading before sellers brought volatility, driving shares down as much as 13% on the Nasdaq. As of midday Wednesday, shares were down about 10% to $10.58.
Looking ahead, Koerl said Sportradar is increasing efforts to develop and deploy AI and computer vision to sports. For instance, in table tennis, its automated systems can capture and analyze 120 frames per second for table tennis, creating 100 times more data points to capture. Long-term for all sports, this means Sportradar will be able to better modify its wagering algorithms as well as bolster its managed betting services for in-game betting.
“For us real-time is very, very important, because live betting is driven by real-time information,” Koerl said.