Revenue spikes 24 percent in the year’s first quarter for Sportsradar
One of the world’s leading B2B sports betting solution providers, Sportsradar, recently published its revenue report for the first quarter of this year. The positive report recorded a 24 percent year-on-year (YoY) increase in revenue between January and March this year. The United States segment recorded a 55 percent YoY spike, while revenue from the rest of the world increased by 25 percent compared to the corresponding quarter of last year.
Founded in Norway in 2001, betting solution provider Sportsradar recently published its revenue report for the first quarter of this year. ©Marleen Mulder-Wieske/Unsplash
Since its inception almost 23 years ago, Sportradar has exclusively focused on developing software for the sports betting segment. Founded in Norway in 2001, the company now has its headquarters in Switzerland and offices in almost 20 countries worldwide. Years after its establishment, mergers, and acquisitions allowed Sportsradar to become a credible entity in the world of online sports betting. 14 years after its inception, the Switzerland-based solutions provider secured distribution rights for giant entities like National Association for Stock Car Auto Racing (NASCAR), National Football League (NFL), and National Hockey League (NHL) in the United States. A year later, Sportradar successfully reeled another giant, the National Basketball Association (NBA), onto its portfolio. In addition, the Switzerland-based company has partnered with about 450 bookmakers, which include some big names like Bet365 and Ladbrokes. Sportsradar caters to these bookmakers via its brand Betradar.
Acquisitions over the years have enabled multiple subsidiaries to operate directly under Sportsradar. MOCAP Analytics, Optima Group, Bayes Esports Solutions, and Laola1 are some subsidiaries via which Sportsradar operates globally. In the sports betting segment, Sportsradar targets about 40 sports and generates odds for every game that falls under the category of any of those sports. However, the company does not exclusively concentrate on sports. Several lotteries have secured solutions and services from Sportsradar over the past few years. This segment is active in the Nordic states with Finland-based lottery operator Veikkaus, Sweden’s state-owned lottery Svenska Spel, and the Norwegian lottery operator Norsk Tipping. In addition, Sportradar also focuses on its integrity services. This includes providing a tool that helps detect suspicious betting activities that could signify match-fixing. The Universal Fraud Detection System (UFDS) was built in collaboration with UEFA and launched in 2009.
Apart from the top two leagues of every Union of European Football Associations (UEFA) member nation, UFDS has been deployed by the Asian Football Confederation (AFC), The Confederation of North, Central America and Caribbean Association Football (CONCACAF) Champions League, and the South American Football Confederation (CONMEBOL). In addition, Sportradar has also provided public engagement tools to their clients that help these companies grow and touch new heights. Stellar delivery across all its active segments has been reflected in the company’s latest quarterly report, showing some promising numbers. The growth continues to be strong after partnering up with UEFA, International Tennis Federation (ITF), Federation Internationale de l’Automobile (FIA), and other mega entities. Sportradar boasts a portfolio comprising over 1,700 clients across 120 countries. These clients are either sports federations, sports betting operators, or from the media sector.
The Chief Executive Officer (CEO) of Sportsradar, Carsten Koerl, reflected on the company’s growth in the opening quarter of 2023.
“We started fiscal 2023 on solid footing, as we continued to deliver strong top line growth, predominately by growing our value add products such as MBS and Live Odds in the Rest of World business, and strong, profitable growth in our U.S. segment. We are also demonstrating operational leverage as we continue to focus on cost discipline across the organization and invest prudently to grow our top line. We are confident that our ongoing product innovation in AI and computer vision will enable us to remain a market leader and increase shareholder value for our investors.”
Analysis of the first quarter of 2023
In 2022, when the new fiscal year began, Sportradar reported revenue of €167.9 million. This year in the first quarter, the revenue shot up 24 percent to €207.6 million, while the adjusted EBITDA rose from €26.7 million in Q1 2022 to €36.7 million in the first quarter this year. The adjusted EBITDA margin rose to 18 percent from 16 percent last year. Adjusted free cash flow decreased four percent from €12.9 million to €12.4 million. As a result, the cash flow conversion also dropped to 34 percent from 48 percent.
The report divided revenue growth into two categories, with Sportradar reporting growths in both categories – The United States and the rest of the world. In the United States, revenue increased 55 percent to €39.7 million, while the betting segment in the rest of the world recorded a 52 percent spike and touched €108.5 million. According to Sportsradar, the main contributors to this spike were Managed Betting Services (MBS) and Live Odds. The total profit decreased year-on-year from €8.2 million to €6.8 million.
Sportradar ended 2022 with FIS tie-up
The integrity segment of Sportradar reeled in another client in December last year. The International Ski and Snowboard Federation (FIS) decided to secure integrity solutions from Sportradar to keep the threat of illicit activities at bay. FIS, like Sportradar, is based in Switzerland and monitors 132 national skiing associations. The federation only focused on skiing events globally but included snowboarding as a sport under its umbrella last year.
The FIS decided to partner with Sportradar after noticing a significant increase in betting activity on several skiing events. As the betting activity rises on any sport, the chances of match-fixing also rise. To prevent that from the beginning, FIS acted quickly and secured the integrity services of Sportradar to keep all betting activity in check. After the deal was signed, Sportradar predicted the betting activity on major FIS events would cross the €40 million mark every season. However, with the UFDS in place, Sportradar will be able to monitor all betting activity and detect suspicious wagers.
Since the tool was created, the UFDS has detected almost 8,000 matches that have fallen under the suspicion of match-fixing. A thousand were detected last year, as the tool remains quite effective in detecting suspicious matches and betting activity. Due to its competent tools, Sportradar has a good customer net retention ratio (NRR). Along with its quarterly revenue, the NRR also increased to 120 percent in the first quarter of this year. In the previous quarter, it was just one percent less.
