Sportradar sees 24% revenue growth in Q1 as it targets further investments in IA

Sports technology company Sportradar has reported 24% revenue and 37% Adjusted EBITDA growth in the first quarter of the year, reaching $226.2 million and $40 million respectively. The strong financial performance was driven by a 55% revenue hike to $43.3 million in the company’s US segment, with positive Adjusted EBITDA for a third consecutive quarter. 

Sportradar’s Rest of the World (RoW) segment also had a strong start to the year, accounting for 52% of total revenue and growing by 25% to $118.3 million, primarily driven by a strong performance from Managed Betting Services (MBS) and Live Odds. Meanwhile, in the US segment, growth was driven by higher sales of betting products, as well as the company’s digital advertising (ad:s) product.

Despite the significant growth in these segments, profit for the first quarter was €6.8 million ($7.4 million), which was down from €8.2 million ($8.9 million) in the same period last year, amid numerous costs. Meanwhile, the Adjusted EBITDA margin was 18% in Q1, an increase of 176 bps compared with the prior year period; and the company’s customer Net Retention Ratio (NRR) was 120%, a slight improvement over the NRR from the fourth quarter of 2022, which stood at 119%.

Carsten Koerl, Sportradar CEO

Carsten Koerl, Chief Executive Officer of Sportradar, said: “We started fiscal 2023 on solid footing, as we continued to deliver strong top-line growth, predominately by growing our value add products such as MBS and Live Odds in the Rest of World business, and strong, profitable growth in our U.S. segment.”

All in all, the quarter was an eventful one for the sports technology giant, which penned a number of new deals during the three-month period. These include agreements with organizations such as cricket team Delhi Capitals and World Aquatics; and expanded deals with Biathlon Integrity Unit and Big Ten Network.

“We are also demonstrating operational leverage as we continue to focus on cost discipline across the organization and invest prudently to grow our top line,” Koerl added. “We are confident that our ongoing product innovation in AI and computer vision will enable us to remain a market leader and increase shareholder value for our investors.”

The potential of using AI was also highlighted during the company’s earnings call, in which officials noted it could improve liquidity trading in the real-time analysis of deep sports data. The expectation is that AI could result in margin improvement over time, with Koerl stating that the sports data industry is currently facing a transformation process.

"We are replacing human beings collecting sports information with digital systems. That's a continuous process,” the CEO pointed out. “And it will be rolled out over most sports. What it provides is much deeper insights into sports [...] It's a continuous investment, and you're going to need to do it to be on top of the technology.”

Following the solid Q1 results, the business has now reaffirmed its annual outlook, previously unveiled in March, with expected growth of 24% to 26% for revenue and 25% to 33% for Adjusted EBITDA. Forecasted revenue for fiscal 2023 would be in the range of $983.2 million to $1002.8 million, while Adjusted EBITDA would range from $171.1 million to $182 million.

See Sportradar's full Q1 report here.