Sportradar Group Ag Class A ((SRAD)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Sportradar’s recent earnings call was marked by a predominantly positive sentiment, underscored by robust revenue growth, particularly in the U.S. market, and notable increases in Managed Trading Services and adjusted EBITDA. Despite facing some challenges in the European sports rights market and experiencing fluctuations in advertising revenue, the positive aspects significantly overshadowed the negatives.
Record Quarterly Revenue
Sportradar reported an all-time record quarterly revenue of $318 million, marking a 14% increase year-over-year. This impressive growth was fueled by higher product uptake from existing clients, additional spending from new clients, and strong trading results from Managed Trading Services.
U.S. Market Growth
The U.S. market demonstrated remarkable growth, with revenue increasing by 30% and expanding to 28% of Sportradar’s revenue mix. This reflects the rapid market growth and strong demand for Sportradar’s content and product solutions in the region.
Strong Performance in Managed Trading Services
Managed Trading Services experienced a turnover growth of 23% year-to-date, driven by the onboarding of 50 new sports books in 2024 and a robust pipeline of additional sports books, highlighting the service’s expanding influence and success.
Increased U.S. In-Play Betting
In-play betting in the U.S. has grown to approximately 50% of total betting, with expectations to exceed 70%. This growth is contributing significantly to Sportradar’s EBITDA, showcasing the increasing popularity and profitability of in-play betting.
Adjusted EBITDA Growth
Sportradar’s adjusted EBITDA grew by 31% year-on-year to $64 million, with a margin expansion of approximately 250 basis points year-on-year to 20.1%. This reflects the company’s effective cost management and operational efficiency.
Challenges in European Sports Rights Market
Sportradar faced challenges in the European sports rights market, opting not to pursue the European League Soccer rights due to their history of being loss-making for previous holders and not aligning with Sportradar’s ROI criteria.
Quarterly Fluctuations in Advertising Revenue
The company reported some fluctuations in media and advertising revenue due to the timing of campaigns. However, overall growth is anticipated for the year, indicating a resilient advertising strategy.
Forward-Looking Guidance
Looking forward, Sportradar has raised its full-year outlook, projecting revenues of at least €1.278 billion and an adjusted EBITDA of at least €284 million, representing growth of at least 16% and 28%, respectively. This optimistic forecast is supported by a strong customer net retention rate of 117% and a 68% free cash flow conversion rate.
In conclusion, Sportradar’s earnings call highlighted a strong performance with positive growth metrics across several key areas, particularly in the U.S. market and Managed Trading Services. Despite some challenges, the company’s forward-looking guidance remains optimistic, setting a promising tone for future growth.