Genius revenue rises 75.5% in 2021 but losses skyrocket

Genius Sports has reported revenue of $262.7m (£200.5m/€238.8m) in its full year 2021 results, but net losses and operating expenses, particularly stock-based costs, also grew.

This was a rise of 75.5% compared to its full year 2020 revenue, which was $149.7m.

Betting technology, content and services amounted to $177.2m in revenue, up 60.2%.

Revenue from media technology, content and services doubled year-on-year- growing by 109.6% to $48.3m. It was a similar story for sports technology, content and services with revenue here up 131.7% to $37.2m.

Genius attributed these rises to its acquisition of new customers in Europe and the Americas in 2021.

This came as the business agreed and expaned a number of partnerships during the year – the highlight among these was when it agreed to a multi-year partnership with the National Football League in April. Under this deal, the NFL received options to acquire 22.5 million Genius shares, which at the time were worth $428.0m.

Genius also acquired US sports distribution system manufacturer Sportzcast at the end of 2020, and data tracking company Second Spectrum in May 2021.

However, the supplier’s cost of revenue was $476.1m, more than quadrupling from $114.0m in 2020. This brought its gross loss to $213.4m, after a $35.7m gross profit the year before.

In addition, operating expenses grew more than sixfold year-on-year to $359.8m. Much of this – $293.1m – came from general and administrative expenses, which rose by $261.5m.

Sales and marketing expenses grew by 107.1% to $27.2m, while research and development costs also increased to $26.5m, rising by 135.8%. Transaction costs made up the remaining $12.8m.

This brought the loss from operations to $573.2m, up by $552.2m after a loss of just over $20m in 2020.

A number of these costs were paid through shares, as stock-based compensation amounted to $489.4m for the year. There was no comparable figure in 2020 for this amount.

Other expenses, which comprised of interest costs and loss on disposal of assets among others, totaled at $31.1m, up $23.6m yearly.

After considering this, loss before income taxes came to $604.4m, up by $575.9m.

Following income tax benefit of $11.7m, the total net loss for the year amounted to $592.7m, a rise of $562.4m.

“2021 was a transformational year that saw Genius form innovative new relationships with leagues, sportsbooks and brands alike, which allowed us to deliver record group revenue in the fourth quarter,” said Mark Locke, Genius co-founder and CEO.

“We are confident that 2022 will be another strong and profitable year as we capitalize on the growth opportunities ahead and continue to expand our services around the world.”

Genius published its projections for 2022 in January, noting that it expects positive EBITDA and revenue.

For its fourth quarter, Genius reported revenue of $84.0m, up 78.7% year-on-year. Betting technology, content and services accounted for $53.9m of this, up 52.9%, while media technology, content and services made up $17.0m – a rise of 127.5%.

Sports technology and services revenue grew by 206.1%, making up the remaining $13.0m.

Costs of revenue for the quarter were $109.4m, up 218%, bringing Genius’ gross loss to $25.4m.

Operating expenses more than doubled to $50.9m. Much of this – $30.7m – was from general and administrative costs, which almost tripled year-on-year. Sales and marketing expenses were $10.3m, and research and development costs were $6.5m. The remaining $3.2m came from transaction expenses.

These expenses brought the loss from operations to $76.3m, ten times more than in 2020.

Total other income resulted in a gain of $11.6m for Genius, up by $13.1m.

After income tax benefit at $11.3m, the total net loss for the quarter amounted to $53.2m, almost four times that in 2020.

Author: Raymond Fleming