Sportradar revenue up 29% in Q2 despite rights spend hike

The company's adjusted EBITDA for Q2 was €48.8 million, up 22% year-on-year. Sportradar added 46 new customers to its core betting product during the period, helping it process €9 billion in revenue through its platform between April and June.

Revenue from the Betting Technology and Solutions division grew by 30% to €229.1 million. Sports content, technology and services revenue also increased to €49.3 million, up 22% year-on-year. As a result, the Betting Technology division accounted for 82% of the company’s total revenue.

Betting Management Services also grew by €9 million, driven by higher trading margins and increased customer activity, both new and existing.

The company’s cash reserves amounted to €15.26 million at the end of the second quarter.

CEO Carsten Koerl noted in his note to analysts that the company’s main development direction is the use of generative artificial intelligence. According to him, the company plans to create new personalized experiences for users, focused on answering questions about current and historical sporting events.

Koerl emphasized that generative AI will be the foundation for creating multi-model solutions that will be offered to sports fans, which he believes is the next phase in the future of sports content consumption.

To strengthen its position in the field of AI, Sportradar hired former Google VP of Engineering Behshad Behzadi as CTO and Chief AI Officer in May.

Despite the positive revenue results, Sportradar recorded a loss of €1.5 million in the second quarter, which contrasts with the result last year, when the company remained at breakeven. CFO Craig Felenstein attributed this to a significant increase in sports rights costs, which increased by 83% to €95.9 million. He noted that one of the reasons for the increase in costs was the agreement with the Association of Tennis Professionals (ATP) for the provision of data and broadcasts, which was signed in December 2023.

However, Felenstein noted that there is no further increase in sports rights spending expected in the coming years. According to him, the ATP deal was a significant step for the company and no significant increase in spending is expected in the coming years.

In July, Sportradar extended its exclusive betting data agreement with UEFA, which now covers tournaments until 2028.

In response to these developments, the company slightly increased its revenue forecast for 2024, expecting revenue of €1.07 million. The adjusted EBITDA forecast was also revised up to €204 million, with an expected margin of 19%.