Continuing Operations Profit Plummets in Q3 2023 For Sportradar Despite Revenue Spike
Author:
Muhammad Gregory
Renowned sports technology and sportsbook solutions provider Sportradar recently published its financial performance report for the third quarter of this year. The accumulation of €201 million in Q3 2023 has marked an impressive 12 percent year-on-year (YoY) increase in the company’s revenue in the third quarter. Despite the spike, the profit from continuing operations and the Net Retention Rate (NRR) have decreased, with the former recording a massive 64 percent drop. Substantial costs have reduced profits across all segments, and the company has also announced plans to cut the workforce by around ten percent.
Revenue rises but profits decrease in Q3 2023 for Sportradar.
?Austin Distel/Unsplash
Established in 2001, Sportradar has always been a well-known brand sitting at the intersection of the global sports, media, and betting segments. The Switzerland-based entity is one of the leading sports tech and sportsbook solution providers in the world and has always worked on delivering an immersive experience for fans and bettors. The credibility and reputation of Sportradar are at their highest due to which it is a trusted partner of major sports organizations like the Fédération Internationale de Football Association (FIFA), The Union of European Football Associations (UEFA), the International Tennis Federation (ITF), and more. Apart from Europe, the Swiss brand is also a crucial part of the North American market and has partnered up with the Major League Baseball (MLB), the National Basketball Association (NBA), the National Hockey League (NHL), and the National Association for Stock Car Auto Racing (NASCAR). Sportradar provides these sports organizations and federations with state-of-the-art technology and solutions related to streaming, odds, and other statistical data. The Swiss company delivers innovative solutions to companies and bettors globally.
The solutions also include tools to maintain the integrity of the industry by keeping illicit activities at bay. These measures help in the detection and prevention of doping, fraud, match-fixing, and other unwanted activities. Sportradar has its own Integrity Services division that looks after these concerns. Over the years, the Swiss company has partnered with major brands worldwide. Besides some of the most prominent sports federations, Sportradar has longstanding partnerships with betting brands like Caesars Sportsbook, DraftKings, and FanDuel. In total, there are 24 brands from multiple segments on Sportradar’s portfolio seeking either data solutions or sportsbook odds. The deal with Caesars Sportsbook was completed this year, enabling the operator to access optical tracking data for the NBA. Sportradar is the exclusive data provider of the NBA due to its strategic partnership with the entity. As the activity increases, the Swiss solutions provider aims to reduce its workforce globally to cut costs, leading to a massive strategic shift and restructuring. Sportradar announced the decision along with the Q3 2023 financial report of the company, in which profits declined.
Sportradar is planning to reduce its global workforce by about ten percent. The company has 3,900 employees in 20 countries and intends to cut costs wherever possible after an alarming dip in the segment. The overall quarterly revenue was higher than the corresponding quarter last year, but the total profit from continuing operations dropped 64 percent from €12.8 million in Q3 2022 to €4.6 million in Q3 2023. The revenue recorded a 12 percent YoY spike as it soared to €201.0 million, as all segments recorded growth. The EBITDA for Q3 2023 marked a 38 percent increase and surpassed the €50-million-mark. The final recorded figure was €50.5 million due to a robust revenue increase and high operating leverage in the quarter. Massive costs and taxes were the primary reasons behind the decline in profit. The most substantial expense during Q3 2023 came via operational expenses worth €75.3 million. Sportradar also splashed €45.2 million on purchasing services and licenses, while €38.1 million was categorized under depreciation and amortization costs. Sportradar also lost €9.8 million on goodwill and intangible assets and €5.6 million on impairment loss on on-sale assets.
The Chief Executive Officer (CEO) of Sportradar, Carsten Koerl, commented on the company’s performance in Q3 2023 and its plans for the final quarter of the year.
“As the leader in our industry, we aim to consistently deliver value to our clients, partners and shareholders. For 2023 we remain on track to deliver a strong growth year and are well positioned to maintain that momentum into 2024. This week we announced a reduction in our global workforce as part of a broader set of strategic initiatives that will enable us to further strengthen our client-centric organization and focus on the market opportunities ahead of us.”
Sportradar and NASCAR Agreed on an Extension This Year
About two months ago, Sportradar confirmed that it had agreed with NASCAR to extend their existing partnership deal with a few new additions. The initial deal was a data rights partnership in which Sportradar delivered live timing and scoring data to all digital media partners associated with NASCAR. In the latest extension, Sportradar will also provide official betting data, like race-by-race odds, outrights, and other betting-related information to NASCAR’s media associates.
While Sportradar focuses on distributing data, NASCAR relies on BettorView for providing race-related content in the regulated jurisdictions where sports betting is legal. The deal was signed over two years ago and was BettorView’s first professional sports league tie-up. The in-venue sports betting marketing and technology platform provider delivers brand ambassador activations, digital content marketing, on-screen touch technology, and more than 1,000 in-venue screens in the United States of America.
BetMGM-Sportradar Deal Confirmed Last Month
Sports betting and iGaming giant BetMGM confirmed last month that it had struck a deal with Sportradar to gain access to various services and solutions provided by the Switzerland-based entity. The new deal has granted BetMGM access to the official and exclusive optical tracking data of the NBA.
Categorized as one of the biggest deals in Sportradar’s history, the collaboration with BetMGM has enabled the operator to access next-generation state-of-the-art products and services that leverage optical tracking data of the NBA. With this access, BetMGM is now growing multiple segments like prop markets, same-game parlays, in-play betting markets, and more.
