Genius Sports (GENI)2022-03-18 20:16Financial Performance - Revenue for the year ended December 31, 2021, was $262.7 million, an increase of $113.0 million or 75% compared to $149.7 million in 2020[372]. - Cost of revenue increased to $476.2 million for the year ended December 31, 2021, up $362.1 million or 317% from $114.1 million in 2020[376]. - Gross loss was $(213.4) million for the year ended December 31, 2021, compared to a gross profit of $35.7 million in 2020, representing a variance of $(249.1) million or (698%) [371]. - Net loss for the year ended December 31, 2021, was $592.8 million, compared to a net loss of $30.3 million in 2020, reflecting an increase of $562.5 million or 1,853%[389]. - Revenue for the year ended December 31, 2020, was $149.7 million, an increase of $35.1 million or 31% compared to $114.6 million in 2019[392]. - Net loss for the year ended December 31, 2020, was $30.3 million, a reduction of $9.9 million or 25% from a net loss of $40.2 million in 2019[407]. Revenue Breakdown - Betting Technology, Content and Services revenue increased by $66.6 million or 60% to $177.2 million for the year ended December 31, 2021[373]. - Media Technology, Content and Services revenue rose by $25.3 million or 110% to $48.3 million for the year ended December 31, 2021[374]. - Sports Technology and Services revenue increased by $21.2 million or 132% to $37.2 million for the year ended December 31, 2021[375]. - Betting Technology, Content and Services revenue increased by $22.2 million or 25% to $110.6 million, driven by price increases, new customer acquisitions, and increased utilization of event content[393]. - Media Technology, Content and Services revenue rose by $11.2 million or 94% to $23.1 million, primarily due to new customer acquisitions in the Americas and Europe[394]. Expenses - General and administrative expenses surged to $293.2 million for the year ended December 31, 2021, an increase of $261.5 million or 827% from $31.6 million in 2020[382]. - Data and streaming rights costs were $97.9 million for the year ended December 31, 2021, an increase of $55.9 million or 133% from $41.9 million in 2020[377]. - Cost of revenue was $114.1 million for 2020, up $24.8 million or 28% from $89.3 million in 2019, mainly due to increased data rights costs[397]. - General and administrative expenses increased by $2.1 million or 7% to $31.6 million, mainly due to costs related to a new ERP system[402]. Cash Flow - Net cash provided by operating activities was $17.1 million in 2020, compared to $2.5 million in 2019, reflecting a positive change in working capital[415]. - Net cash used in investing activities was $22.7 million in 2020, primarily driven by capital expenditures and business acquisitions[418]. - Net cash provided by financing activities was $10.1 million in 2020, mainly from proceeds of a Related Party Loan[420]. Accounting Policies - Genius' financial statements are prepared in accordance with U.S. GAAP, requiring management to make significant judgments and estimates that could materially impact reported revenue and expenses[422]. - Genius recognizes revenue based on whether it acts as a principal or agent, generally controlling products and services before transfer to customers[423]. - Under ASC 606, Genius uses various techniques to estimate total contract revenue and costs, with potential revisions to estimates impacting revenue recognition[424]. - The standalone selling price for goods or services is determined based on observable prices and other factors, including costs and pricing objectives[425]. - Genius capitalizes internal-use software development costs when certain criteria are met, amortizing these costs over an estimated useful life of three years[427]. - Acquisitions are accounted for under ASC 805, with fair value allocated to tangible and intangible assets, and any excess recorded as goodwill[428]. - Stock-based compensation is measured based on grant date fair value, with costs recognized over the requisite service period[430]. Compensation and Governance - Total cash compensation for Genius's executive officers for the year ended December 31, 2021, was $3,866,123, which includes base compensation of $2,225,160 and bonuses of $1,616,752[458]. - Genius's directors received a total compensation of $910,000 for the year ended December 31, 2021, comprising $130,000 in cash-based compensation and $780,000 in share-based compensation[460]. - Genius's Chief Financial Officer, Nicholas Taylor, has been with the company since December 2020 and previously served as CFO of Wagamama from June 2017 to September 2019[456]. - Mark Locke, the CEO, holds 21,560,474 total ordinary shares, representing 10.6% of total outstanding shares[463]. - Genius maintains defined contribution pension arrangements, with no amounts set aside for pension or retirement benefits for executive officers[459]. - Genius's compensation committee is responsible for evaluating executive compensation and has the authority to retain independent consultants for this purpose[464]. - The compensation committee is responsible for reviewing and approving the corporate goals and objectives relevant to the CEO's compensation and evaluating performance[485]. - The compensation committee may retain or obtain advice from external advisers while considering their independence[480]. - The company has established a nominating and corporate governance committee responsible for overseeing the selection of board nominees and executive appointments[477]. Employee Relations and Structure - The company has approximately 2,300 staff across 11 main locations and 6 continents, including over 1,800 employees and more than 500 contingent workers[484]. - The company operates a network of over 2,500 data statisticians globally, managing an additional 4,500 statisticians employed by FIBA[484]. - The company emphasizes the development of a pipeline of 'home-grown' management talent, supplemented by external hires as necessary[485]. - The company aims to attract, retain, and develop staff with the skills necessary to implement its growth strategy[485]. - The company has not experienced any work stoppages and considers its relations with employees to be good[487]. Compliance and Ethics - The company has established a Code of Business Conduct and Ethics, which is regularly reviewed and communicated to staff[482][486]. - The audit committee is tasked with monitoring the independence of the company's independent registered public accounting firm and ensuring compliance with applicable laws[476]. - Genius recognizes deferred tax assets based on the likelihood of realization, considering various positive and negative evidence[434]. - Genius's primary market risk exposure is to foreign currency exchange, which is detailed in the financial statements[438]. - The company has elected to take advantage of the extended transition period for emerging growth companies under the JOBS Act, which may affect comparability with other public companies[437].