Sportradar Reports Q3 Revenue Growth Despite Profit Slump

Sportradar, a prominent player in the sports betting sector, recently released its Q3 financial report, revealing an intriguing combination of revenue growth and declining profits. Despite a 12.4% increase in total revenue, amounting to €201.0 million in Q3 compared to the previous year, the company experienced a significant drop in net profit, down by 27.9% year-on-year. This news has sparked interest and raised questions about the company's financial strategies and future prospects.

In a detailed breakdown, Sportradar's revenue growth was observed in all segments, with the Rest of World (RoW) Betting AV segment leading the way with a remarkable 15.0% increase, reaching €38.0 million. RoW Betting revenue also contributed significantly, bringing in €112.1 million, an 11.1% growth, while the US segment saw an identical increase, generating €35.0 million. The revenue from all other segments collectively rose to €15.7 million.

Sportradar's CEO, Carsten Koerl, expressed optimism about the company's performance, indicating that these Q3 results are indicative of their ability to achieve growth in their full-year results. He stated, "As the leader in our industry, we aim to consistently deliver value to our clients, partners, and shareholders. For 2023, we remain on track to deliver a strong growth year and are well positioned to maintain that momentum into 2024."

However, Sportradar also made headlines by announcing a reduction in its global workforce as part of broader strategic initiatives. This decision is expected to result in a 10% decline in labor costs for the year 2023. Koerl explained, "This week we announced a reduction in our global workforce as part of a broader set of strategic initiatives that will enable us to further strengthen our client-centric organization and focus on the market opportunities ahead of us."

Analyzing the costs, the largest expense for Sportradar in Q3 was operational expenses, amounting to €75.3 million. This was followed by €45.2 million in purchased services and licenses and €38.1 million in depreciation and amortization costs. Notably, two additional costs in this quarter were a €9.8 million loss on goodwill and intangible assets and a €5.6 million impairment loss on assets held for sale.

Factoring in these various costs resulted in a pre-tax net income of €10.5 million, which is a 27.9% decrease year-on-year. Sportradar paid €5.9 million in income tax expense, leaving a profit from continuing operations of €4.6 million. Including the €495,000 loss from discontinued operations, the profit for the period was €4.1 million.

In the larger context of the first nine months of the year, Sportradar's revenue reached €625.0 million, reflecting a growth of 19.3%. Segmental revenue highlights included RoW Betting with €334.8 million, RoW Betting AV contributing €132.1 million in revenue, and Sportradar's US segment generating €112.7 million. All other segments combined contributed €45.2 million to the total revenue.

Notably, personnel expenses remained the highest cost during this period at €237.2 million, followed by €137.9 million in depreciation and amortization expenses.

However, the picture wasn't as rosy when it came to net profit before tax for the first nine months, which more than halved, dropping to €22.9 million from €47.8 million in the same period of 2022. After paying €11.5 million in taxes, an amount almost three times higher than the previous year, the profit from continuing operations stood at €11.4 million, indicating a significant decrease of 73.8%. The Q3 results are bound to provoke further discussions about Sportradar's financial performance and strategies.