Sportradar Group AG (SRAD) Q4 2024 Earnings Call Highlights: Record Revenue and Strategic ...

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Thu, Mar 20, 2025, 1:01 AM 4 min read

Total Revenue (Full Year 2024): EUR1.1 billion, a 26% increase compared to 2023.
Adjusted EBITDA (Full Year 2024): EUR222 million, a 33% increase year-over-year.
Adjusted EBITDA Margin (Full Year 2024): Increased by over 100 basis points to 20%.
Fourth Quarter Revenue: EUR307 million, a 22% increase compared to the same quarter last year.
Fourth Quarter Adjusted EBITDA: EUR61 million, a 53% increase year-over-year.
Fourth Quarter Adjusted EBITDA Margin: Expanded over 400 basis points to 20%.
MTS Turnover (2024): EUR35 billion with a 10.7% margin, up from 9.8% in 2023.
Free Cash Flow (2024): EUR118 million, up from EUR50 million in 2023.
Cash and Cash Equivalents (End of Q4 2024): EUR348 million with no debt outstanding.
US Revenue Growth (2024): 58% year-over-year, contributing 24% of total revenue.
2025 Revenue Guidance: At least EUR1.273 billion, representing at least 15% growth year-over-year.
2025 Adjusted EBITDA Guidance: EUR281 million, a 26% increase year-over-year.

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Release Date: March 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Sportradar Group AG (NASDAQ:SRAD) announced the acquisition of IMG Arena, enhancing its global sports betting rights portfolio and expected to be immediately accretive to business and margins.
The company reported strong financial performance for 2024, with a 26% increase in total revenue and a 33% growth in adjusted EBITDA, showcasing significant operating leverage.
Sportradar expanded its partnership with Major League Baseball, securing exclusive rights for MLB official data and audiovisual content, which is expected to be immediately accretive.
The company's Managed Trading Services (MTS) achieved a turnover of EUR35 billion with a 10.7% margin, reflecting strong demand and market leadership in trading and risk management.
Sportradar is leveraging AI and technology to automate data collection and enhance product offerings, leading to improved efficiency and personalized fan experiences.

Negative Points

Sportradar reported a net loss of EUR1 million in the fourth quarter, primarily due to unrealized currency losses associated with US dollar-denominated sports rights.
The acquisition of IMG Arena involves regulatory reviews in certain international territories, which could delay the expected closing in the fourth quarter of 2025.
The company's cash balance declined by EUR20 million from the end of the third quarter, mainly due to the acquisition of affiliate marketing assets and timing of sports rights payments.
Despite strong growth, the company anticipates a step down in growth rate for 2025, with implied growth around 15% compared to 22% in the fourth quarter of 2024.
Sportradar's expansion into new markets like Brazil involves uncertainties and challenges, particularly in integrating iGaming with sports betting offerings.

Q & A Highlights

Q: Can you elaborate on the structure of the IMG deal and its impact on your balance sheet and liabilities? Also, what are the expected revenue synergies from this acquisition? A: Carsten Koerl, CEO, explained that the IMG deal is a strategic milestone for Sportradar, enhancing their position as a premium B2B sports provider. The acquisition is expected to be accretive to revenue, margins, and cash flow. Craig Felenstein, CFO, added that the majority of the acquisition involves sports rights, and there are significant operational synergies expected, which will help reduce costs and expand margins.

Q: What is driving the success of Managed Trading Services (MTS) in Brazil, and what is the mix of services being offered? A: Carsten Koerl highlighted the strong team in Brazil and their strategic partnerships, including an integrity partnership with the Soccer Confederation. The MTS success is attributed to providing economies of scale for sportsbooks. Additionally, Brazil serves as a test market for Sportradar's 360-degree iGaming solution, which integrates acquisition, data, odds, and campaign management.

Q: How did the Taiwan Lottery hardware sales impact MTS growth, and what drove the 100 basis points of margin expansion? A: Craig Felenstein noted that without the Taiwan Lottery's one-time setup fees, MTS growth would have been in the high 20% range. Carsten Koerl added that margin expansion was achieved through tight management of employee costs and securing long-term sports rights, providing cost predictability and stability.

Q: Can you provide details on the revenue and EBITDA expectations for the IMG acquisition, and do these include synergies? A: Craig Felenstein stated that if Sportradar had owned IMG from January 1, 2025, revenue growth would be in the high 20% range. The acquisition is expected to be margin accretive due to leveraging IMG's assets across Sportradar's global distribution network. The revenue estimates do not include potential upselling and cross-selling synergies.

Q: How did you approach the valuation of the IMG acquisition, and what implications does it have for other rights you own? A: Carsten Koerl explained that the valuation was based on ROI analysis for each right, considering cross-selling and upselling potential. The acquisition aligns with Sportradar's focus on key sports like soccer, basketball, and tennis, and the company aims to achieve target margins similar to their existing rights portfolio.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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