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Genius Sports (GENI) - 2021 Q4 - Earnings Call Transcript
GENIGenius Sports (GENI)2022-03-11 18:44
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Financial Data and Key Metrics Changes - The company reported Q4 revenues of 84million,representinga7984 million, representing a 79% increase year-on-year, with full year 2021 revenues reaching approximately 263 million, slightly ahead of guidance and reflecting over 75% annual growth [12][13][37] - Group adjusted EBITDA for the year was approximately 2million,inlinewithexpectations,indicatingabroadlybreakevenlevel[41]−ThecompanyexpectsgroupadjustedEBITDAofapproximately2 million, in line with expectations, indicating a broadly breakeven level [41] - The company expects group adjusted EBITDA of approximately 15 million in 2022 and 40millionto40 million to 50 million in 2023 [9][16] Business Line Data and Key Metrics Changes - Betting revenues grew 53% year-on-year in Q4 to 53.9million,drivenbyincreasedutilizationwithexistingsportsbooksandnewcustomerwins[34]−Majorbusinessrevenuesmorethandoubledyear−on−yearinQ4to53.9 million, driven by increased utilization with existing sportsbooks and new customer wins [34] - Major business revenues more than doubled year-on-year in Q4 to 17.1 million, benefiting from strong advertiser spend in North America [35] - Sports revenue more than tripled in Q4 to 13million,bolsteredbyrecentacquisitionsandexistingtechservices[35][36]MarketDataandKeyMetricsChanges−Thecompanysigned20neworrenewedrightsdealsinQ4withleaguesandfederationsglobally,includingpartnershipsinhigh−growthmarketssuchasBrazil,India,andAfrica[14]−Thecompanyachieveddollar−basednetrevenueretentionof14413 million, bolstered by recent acquisitions and existing tech services [35][36] Market Data and Key Metrics Changes - The company signed 20 new or renewed rights deals in Q4 with leagues and federations globally, including partnerships in high-growth markets such as Brazil, India, and Africa [14] - The company achieved dollar-based net revenue retention of 144% for its top 25 customers in 2021 [29] Company Strategy and Development Direction - The company aims to be profitable in 2022 and 2023, with a focus on executing its strategy and expanding its U.S. operations [9][32] - The long-term vision includes being the technology enablement layer driving the convergence of sports betting and media [11] - The company is strategically positioned to leverage its technology partnerships with leagues and federations to drive growth [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory despite potential risks from the ongoing situation in Ukraine, estimating a revenue impact of 2 million to 6million[43]−Thecompanyremainsdisciplinedinitsinvestmentstrategy,particularlyintheU.S.market,whichisexpectedtoflipprofitableby2024[42]−Managementhighlightedtheimportanceofoperationalexecutionandproductdevelopmentin2022,focusingonin−playbettingopportunities[71]OtherImportantInformation−Thecompanyhasastrongbalancesheetwithapproximately6 million [43] - The company remains disciplined in its investment strategy, particularly in the U.S. market, which is expected to flip profitable by 2024 [42] - Management highlighted the importance of operational execution and product development in 2022, focusing on in-play betting opportunities [71] Other Important Information - The company has a strong balance sheet with approximately 230 million available for potential acquisitions, indicating a readiness to explore M&A opportunities [94] - The company is monitoring the promotional environment and believes it is insulated from potential reductions in promotional spend by sportsbooks [54][114] Q&A Session Summary Question: Can you provide insights on gross margin expenses affecting EBITDA? - Management discussed promotional spend categories and indicated that reductions in promotional activities would not significantly impact their business model [51][56] Question: How do new states legalizing in the U.S. impact the business? - Management stated that they follow a consensus view on state legalization and do not require California's legalization to meet their targets, although it could present upside [65][107] Question: What is the focus for the company in 2022? - The focus for 2022 includes operational execution and driving value from recent acquisitions, with an emphasis on product development to enhance operator success [70][71] Question: How is the advertising business performing amid potential spend moderation? - Management indicated no negative impact on their advertising business from potential trends of slowdown in marketing spend, focusing on performance-based digital marketing [113] Question: What is the outlook for deferred revenue as a percentage of total revenues? - Management expects deferred revenue to continue to decrease as the business shifts towards more variable revenue models [87]