Sportradar Group AG — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022; filed March 14, 2023. This is an annual report, not a standalone Q4 report. The company reports under IFRS in euros (€).
Business context
Sportradar provides sports data, audiovisual content and technology services to betting operators, sports leagues and media companies. It generates revenue through subscriptions and revenue-sharing arrangements. Revenue mix was 53.3% Rest of World Betting, 22.0% Rest of World AV, 17.5% United States and 7.3% other.
Key financial metrics
| Metric | FY2022 | FY2021 | Change |
|---|---|---|---|
| Revenue | €730.2 million | €561.2 million | +30.1% |
| Profit for the year | €10.5 million | €12.8 million | -18.0% |
| Adjusted EBITDA (non-IFRS) | €125.8 million | €102.0 million | +23.3% |
| Adjusted EBITDA margin | 17.2% | 18.2% | -1.0 percentage point |
| Net cash from operating activities | €168.1 million | €132.2 million | +€35.9 million |
| Adjusted Free Cash Flow (non-IFRS) | €38.9 million | €14.5 million | +€24.4 million |
| Cash and cash equivalents | €243.8 million | €742.8 million | -€499.0 million |
| Total assets | €1,389.1 million | €1,771.1 million | -€382.1 million |
| Total equity | €757.4 million | €735.6 million | +€21.8 million |
Adjusted Free Cash Flow and Adjusted EBITDA are non-IFRS measures; the filing provides reconciliations. Cash Flow Conversion was 30.9%, up from 14.3%. Capital expenditures were €162.6 million, primarily for sports rights and software development.
Segments and customer indicators
- RoW Betting revenue rose to €389.1 million from €309.4 million; segment Adjusted EBITDA was €182.4 million, versus €177.0 million.
- RoW AV revenue increased to €160.5 million from €140.2 million; segment Adjusted EBITDA was €46.5 million, versus €39.2 million.
- U.S. revenue grew to €127.4 million from €71.7 million. U.S. segment Adjusted EBITDA improved to a loss of €4.1 million from a loss of €22.6 million.
- Net Retention Rate for the top 200 customers was 119%, down from 125%; top 200 customers represented approximately 76.4% of revenue.
Material changes and unusual items
- Revenue growth reflected higher Managed Betting Services revenue, including MTS, expansion in U.S. betting markets, and growth in RoW AV. Management said Russia-Ukraine-related coverage disruptions tempered live-data growth.
- Operating costs rose: purchased services and licenses increased 47.4% to €176.0 million; personnel expenses rose 44.7% to €266.0 million; and depreciation and amortization increased 42.9% to €184.8 million, including higher sports-rights amortization.
- FY2022 included €19.0 million of litigation and settlement costs related to a Genius Sports/Football DataCo settlement. The agreement left Genius with exclusive official FDC betting-data rights through 2024; Sportradar obtained a sublicense for a delayed secondary feed.
- Other notable items included a €7.7 million gain on remeasurement of the previously held NSoft interest, €26.7 million in net foreign-exchange gains, and €28.6 million in share-based compensation. Management restructuring costs were €5.5 million.
- The company acquired additional interests in NSoft and Sportradar US and acquired Vaix and Ortec. It also entered a related-party transaction involving BetTech, purchased from CEO Carsten Koerl and contributed to SportTech, an associate in which Sportradar holds 49%.
Cash, debt and liquidity
Operating cash flow was €168.1 million; investing activities used €246.6 million and financing activities used €459.8 million. The financing outflow principally reflected €420.7 million of bank-debt repayments. Sportradar prepaid the €420.0 million Facility B term loan in 2022, leaving no term-loan commitments outstanding. It had €220.0 million of revolving credit commitments, none drawn at year-end. Balance-sheet loans and borrowings were €22.8 million, including €22.0 million of lease liabilities. Separately, trade payables included €407.6 million of capitalized sports-rights license payment liabilities.
Management said existing cash, available borrowing capacity and expected operating cash flows should cover business needs for at least 12 months. The company reported compliance with its debt covenants. Cash declined substantially during the year, largely in connection with debt repayment and other financing and investing outflows.
Outlook, risks and contingencies
- No specific numeric FY2023 guidance is provided in the supplied filing text. Management expects continued growth from U.S. market expansion, new legalized markets, product cross-selling and operating leverage as the U.S. business scales; it described the U.S. segment as not yet profitable.
- Key exposures include changing sports-betting regulation and licensing, reliance on sports-league rights and partners, competition, customer and event seasonality, cyber and service interruptions, data privacy rules, foreign-exchange movements, inflation and geopolitical disruption.
- A material weakness in internal control over financial reporting remained unremediated at December 31, 2022, involving control design and implementation, IT systems and segregation of duties. Management reported corrected misstatements and additional close procedures, but concluded disclosure controls and internal controls were not effective. The auditor issued an unqualified opinion on the IFRS financial statements; no auditor attestation on internal controls was included.
- The company reported no material legal proceedings currently pending or threatened of which it was aware and no material loss expected from claims, while also recognizing the settlement expense described above. License commitments for non-capitalized or not-yet-capitalized rights totaled €694.3 million at year-end; total disclosed commitments were €928.0 million.
- The founder held 81.7% of total voting power at year-end through the dual-class share structure. The company has not paid dividends and does not anticipate doing so in the foreseeable future.
Most important facts for investors to verify
- Whether the material weakness is remediated and whether the ERP and related financial controls operate effectively.
- Whether revenue growth converts into sustainable IFRS profit and cash generation, given lower profit and margins and sizable rights-related costs and commitments.
- U.S. segment growth, path to profitability, and continued expansion of legalized sports betting markets.
- Renewal economics and performance of major sports-rights agreements, including the associated future payment obligations.
- Developments in the Genius Sports/FDC settlement and any other litigation, regulatory or licensing matters.
- Liquidity after the sharp cash reduction, undrawn revolver availability, and the impact of license payables and acquisition commitments.
- Related-party transaction terms and governance implications, including founder voting control and the BetTech/SportTech transaction.