Sportradar raises 2023 guidance as 2022 revenue rises 30% – Sportico.com

Sportradar Group’s revenue grew 30% in 2022 to €730.2 million ($781.3 million), benefiting from US sports betting and World Cup subsidiary strength elsewhere in the world. The results announced on Wednesday morning slightly exceeded the increased forecast given by the company after the third quarter.

“We kept what we promised, and that’s very important for me and the whole team,” Sportradar CEO Carsten Koerl said in a video call. “It was not an easy year to implement our instructions.”

In particular, the company was forced to relocate some of its operations because of Russia’s invasion of Ukraine, while double-digit war-induced inflation pushed up personnel costs in European countries, including Estonia, Koerl said.

Sales growth was even faster in the last quarter, with total revenue up 35% year-over-year to 206.3 million euros ($220.7 million). US revenue grew 77% on overall market growth and increased adoption of in-game betting. The rest of the world betting segment generated the majority of Sportradar’s revenue – €105.9 million ($111.3 million), up 29%, partly due to the boost in guided betting services for the FIFA World Cup.

The company’s net profit for the fiscal year was 10.5 million euros, which is an 18% decrease, including the swing to a fourth quarter net loss of 33.3 million euros. Increased personnel costs, both from compensating employees for inflation and increasing the number of personnel for artificial intelligence and computer vision work, largely contributed to the higher costs. Sports rights were also affected by higher costs for acquiring new rights to UEFA soccer and the International Tennis Federation, as well as higher costs for NHL rights, according to the company.

Despite the financial headwinds, Sportradar sounded an optimistic note for 2023, saying it now expects sales to grow by around 25% this year, to between €902 million and €920 million ($965 million to $984 million). According to data collected by S&P Capital IQ, the consensus of Wall Street analysts was a turnover of 879 million euros in 2023.

“There are two things that I think are important: The rest of the world betting segment offers very high margins and stable growth… In general, sports betting worldwide is forecast to grow by 11% over the next five, six years, and historically Sportradar was always able to outperform the market, Koerl said of the brightened outlook, “The key to accelerating overall betting growth is moving customers up the service value chain.”

“Another big factor is the US market, where we are moving to pre-match live betting, which is very beneficial for us,” Koerl said in a video call. “We also have more and more states in the US and more and more users for sports betting, which is beneficial from a distribution perspective.”

Wall Street seemed divided on Sportradar’s results. Shares were 5% higher in early trading before sellers brought volatility, sending shares down as much as 13% on the Nasdaq. By mid-day Wednesday, shares had fallen about 10% to $10.58.

In the future, Koerl said, Sportradar will increase efforts to develop and utilize artificial intelligence and computer vision in sports. For example, in table tennis, its automated systems can capture and analyze 120 frames per second for table tennis, creating 100 times more data points to capture. In the long term for all sports, this means that Sportradar is better able to modify its betting algorithms as well as strengthen its managed betting services for in-game betting.

“For us, real-time is very, very important because live betting is driven by real-time information,” Koerl said.