Comparing SRAD and GENI Q3 results: The real facts and figures

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In the competitive world of sports data and technology, two companies stand out: Sportradar (SRAD) and Genius Sports (GENI). Their third-quarter results for 2023 — posted this month — offer a revealing glimpse into their current standing and future prospects. This analysis delves into the numbers, drawing on sources such as Sportradar’s and Genius Sports’ official earnings releases, industry news, and earnings call transcripts.

Sportradar’s Q3 performance: A focus on sustainable growth

Sportradar reported its Q3 results with a mix of steadiness and strategic downsizing. While their growth showed signs of slowing, their focus on reducing operational costs hints at a strategy aimed at long-term sustainability. According to Sportradar’s earnings release, the company’s revenue and EBITDA figures were stable, reflecting a cautious but steady approach.

A closer look at the numbers reveals that Sportradar’s revenue for Q3 stood at $211 million, as reported by Covers. This figure, while showing growth, indicates a slower pace compared to previous quarters. However, the company’s decision to downsize operational costs, as discussed in their earnings call, suggests a strategic shift towards more sustainable growth.

“As the leader in our industry, we aim to consistently deliver value to our clients, partners, and shareholders,” said Sportradar CEO Carsten Koerl in a statement. “For 2023, we remain on track to deliver a strong growth year and are well positioned to maintain that momentum into 2024.”

Genius Sports: Revenue and EBITDA growth masking net losses

Genius Sports, on the other hand, presented a more complex picture. Their Q3 results, as detailed in their official release, showed impressive revenue and EBITDA growth. However, these figures obscure an underlying issue: increasing net losses for the quarter.

The company’s revenue growth coupled with an increase in net loss was highlighted in iGaming Business, which pointed out the significant increase compared to the same period last year. 

“As such, pre-tax loss hit $12.0m, wider than last year’s $10.6m loss. Genius paid $1.2m in tax but gained $1.5m from equity investment method. This left a net loss of $11.6m, compared to $9.0m last year.”

Genius Sports’ YTD losses stand at $47 million compared with $54 million for the same period in 2022. 

Yet, as their earnings call transcript reveals, their focus too has been to “remain disciplined on costs and reported lower GAAP operating expenses in this quarter compared to the prior year, even as we grew top-line by nearly 30%”.

Market Reaction: A tale of two stocks

The market’s reaction to these results has been telling. Since the earnings announcement, Sportradar’s stock has seen a notable increase, rising from $8.10 to $10.15, a significant jump of approximately 25%. This uptick reflects investor confidence in the company’s long-term strategy and its focus on sustainable growth.

In contrast, Genius Sports’ stock has experienced a downturn, dropping from $5.40 to $4.96, marking a decline of about 8%. This decrease suggests investor concerns about the company’s net losses, despite the growth in revenue and EBITDA.

Conclusion

The Q3 results of Sportradar and Genius Sports paint a nuanced picture of the sports data and technology industry. While Genius Sports shows impressive top-line growth, its net losses are a cause for concern. Sportradar, with its focus on sustainable growth and cost management, seems to be on a path that is more reassuring to investors. As the industry evolves, these contrasting strategies will continue to shape the fortunes of these two companies.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research or consult a financial advisor before making investment decisions.