Genius Sports said its U.S. business tripled in the third quarter compared to 2021 as its sports data and analytics business beat Wall Street expectations for revenue and earnings.
The company said it generated $235.7 million in revenue for the quarter ended Sept. 30, up 14% year over year and meeting management’s earlier guidance of $231 million surpasses US dollars. Genius posted a net loss of 4 cents a share, beating analyst consensus of a loss of 7 cents a share, according to data compiled by Thomson Reuters.
“This year has been marked by strong execution as we continue to deploy innovative technologies, win new customers and strengthen our key partnerships in the sports, betting, media and broadcast ecosystem,” said Mark Locke, founder and CEO of Genius. in a press release this morning. “We remain on track to achieve our full-year goals, which we set ourselves at our investor day in early 2022.”
While Genius’ core businesses are betting technology, content and services — which account for 63% of revenue — the media business showed its greatest strength over the period. Revenue for that division rose 29% to $17.9 million for the quarter and grew 83% for the year. Its media arm provides programmatic advertising services that enable clients to target desired consumer groups on websites and social media. The company said growth in this business is mostly organic, helped by some new customer additions.
Investors have punished sports betting stocks throughout the year on fears of stock market valuations and dissatisfaction with high spending across the industry. Genius has been working to meet Wall Street’s requirement that such companies show financial progress, and the company has a stated goal of being profitable in terms of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) this year. On that metric, Genius reported a positive quarter with Adjusted EBITDA of $7.7 million compared to a loss a year ago. For the first three quarters of 2022, the company’s total revenue of $235.7 million is up 32% year over year, with Adjusted EBITDA of $13.1 million and a net loss of 37 cents compared to a loss of $4.02 in 2021.
Many fast-growing, technology-focused companies single out Adjusted EBITDA as their preferred metric for measuring the health of their business. In the case of Genius, it adjusts EBITDA by adding stock-based compensation, litigation costs, expenses from its IPO transaction, last quarter’s change in the value of warrants on its shares, and a foreign exchange loss. The latter item in particular detracted from top-line results as increasing US dollar strength reduced non-US sales when recalculated back to dollars. On a constant currency basis, revenue increased 28% for the quarter.
For full-year 2022, Genius expects total revenue to be between $430 million and $440 million, even with currency headwinds. The company’s shares closed at $4.62 on Wednesday, down 39% in 2022.