Bets on soccer, basketball, cricket, and tennis are driving strong growth for
—the world’s leading provider of data and technology for sports bookmakers.
The Swiss-based company (ticker: SRAD) reported Wednesday that its revenue grew 30% in 2022, to $780 million, while cash profits grew 23%. Betting revenue in the U.S. doubled, but a dip in profits is knocking the stock.
Sports betting revenue in the U.S. is growing as more states allow bets, and as more bets are placed during live play, instead of pregame, Sportradar Chief Executive Carsten Koerl told Barron’s. Online direct advertising to bettors is another winning service for the company, he says.
While cash earnings before interest, taxes, depreciation and amortization, or Ebtida, grew 23%, to $135 million, Sportradar’s spending on technology and sports league rights reduced net profit by 18% for the year, to $11 million, or 3 cents a share. In response, traders sent Sportradar stock 9% lower in Wednesday morning trading, to $10.76.
That puts the shares at a multiple of 18 times the roughly $170 million in cash Ebitda that Sportradar expects from revenue of about $970 million this year.
Sportradar got its start supplying match results to bookmakers like the FanDuel unit of
(FLTR. London). It has expanded its data services to include audiovisual feeds, odds-making, and computer-programmed advertising. It dominates the global market for sports data, where it competes with the likes of
For the December quarter, the betting-data firm increased its revenue 35%, to $221 million. Ebitda in the quarter grew 64%, to $38 million.
U.S. revenue grew 77%, to $44 million, thanks to increased in-play betting. Outside the U.S., the majority of bets are placed during matches, and such bets are more profitable for bookmakers. Every percentage point shift in betting, from pregame to in-play, is worth $1.2 million to Sportradar, said Koerl.
Sportradar finished December with about $260 million of cash, after applying some $440 million to completely pay off its bank debt. The company’s strong cash flows are allowing it to invest in new products like managed trading services, in which Sportradar manages betting operations for bookmakers, who then focus on marketing and collection.
Computer vision and artificial intelligence are other technologies that Sportradar is developing. They were key to the company’s recent win of a data deal with the Association of Tennis Professionals. Capturing biometric and computer vision data on tennis players increases the available statistical data by 100-fold, and should improve Sportradar’s ability to set odds for in-play betting.
“As we learn the probabilities,” said Koerl, “We’ll get better at predicting which player will win the next point, based on the data.”
Write to Bill Alpert at email@example.com