Genius Sports’ Q1 2022 Brought Strong Growth, Negative EBITDA

Data content and technology company Genius Sports released its 2022 first quarter financial results posting strong growth in revenue across all divisions, yet a negative bottom line reading.

Growth across All Business Divisions

Genius Sports generated $85.9 million in revenue for the three months ended March 31, 2022, to achieve a growth of nearly 60% on the $53.7 million the business accounted for in the first quarter of 2021.

“Our strong first quarter is a result of successful execution,” commented co-founder and chief executive officer of Genius Sports Mark Locke, making a short retrospection of the year for the company.

“We began 2022 with a comprehensive Investor Day, outlining our strategic plan and underlying assumptions supporting our financial outlook. Our financial and operational achievements in the quarter demonstrate our ability to deliver on that plan and increase our competitive advantages through unique and proven technology.”

Mark Locke, CEO, Genius Sports

Betting Technology, Content & Services revenue was $49.7 million to register an increase of 27.6% on the $39 million the division accounted for in Q1 2021. Growth was fueled by existing customers via price increases on contract renewals and renegotiations, expansion of existing value-added services and the introduction of new services, as well as new customer acquisitions.

Media Technology, Content & Services division generated $24.1 million in revenue to post a 150% increase on the $9.4 million for the division in Q1 2021, delivering organic growth from continued new customer acquisitions and incremental revenues from recent acquisitions.

Sports Technology & Services also accounted for triple-digit growth posting revenue of $12.1 million as compared to $5.4 million in Q1 2021 mainly due to revenues from recent acquisitions such as Second Spectrum, as well expanding of the scope of services for sports leagues and federations.

Continued Investment Weighed on Bottom Line

Q1 2022 saw group adjusted negative EBITDA of $2.9 million, a significant shift from the positive EBITDA reading of $9.3 million in Q1 2021. The company outlined the decrease in EBITDA was “driven by continued investment in the high-growth US business and overall revenue mix.”

Sales and marketing expenses jumped from $3.9 million in Q1 2021 to $9.2 million in Q1 2022, an increase of 135%, research and development costs more than doubled from $3.6 million in Q1 2021 to $7.4 million now, while general and administrative costs more than tripled the Q1 2021 reading of $8.9 million to $32.8 million to contribute to nearly three times higher operating expenses year-over-year.

Cash flow from operating activities was a net loss of $40.2 million, explaining the decrease in the cash balance of $48.2 million: at the end of the reported quarter, Genius Sports sat on a balance of cash and cash equivalents of $174.2 million, a decrease of over 20% on the Q4 2021 ending balance of $222.4 million.