Article: Sportradar's Q1 Preliminary Results and Stock Moves
Sportradar Faces Setback Following Initial Q1 Projections Announcement
Last Updated: April 22, 2025, 05:48h.
Author: Todd Shriber, The ETF Guru
Categories: Gaming, Business, Mergers & Acquisitions, Finance
It's April 22nd, and Sportradar (NASDAQ: SRAD) shares took a bit of a dive after-hours, shedding some of the gains it made earlier in the day, following the release of its preliminary Q1 financial results.
Here's a quick breakdown: The Swiss sports betting data provider expects to report revenue of €307 million to €311 million, along with an adjusted EBITDA of €56 million to €58 million and a profit of €20 million to €24 million for the first quarter. But remember, the independent auditor hasn't reviewed or endorsed these numbers yet - we'll get the official deets on May 12th.
Sportradar's Q1 guidance comes three weeks after the company told us it expects revenue and EBITDA to grow at a 15% and 27% compound annual growth rate, respectively, through 2027. You guessed it - those projections are what helped push the stock up 12.19% over the past month.
Does the Shrinkage Mean We Should Fret?
Well, maybe not. That after-hours plunge might simply be the result of profit-taking in a stock that's up an impressive 23.11% over the last 90 days. It's fair to say that both Sportradar and fellow gaming heavyweight Genius Sports (NYSE: GENI) have shown some serious resilience against the broader economic headwinds, which have been hauling harsh on the consumer-facing side of the industry.
And what's this? Wall Street seems to be coming around to the Sportradar bandwagon. Earlier today, Bank of America analyst Shaun Kelley stepped up to "buy" from "underperform," citing factors like rising clarity on costs and potential benefits from the recent IMG Arena acquisition. The word is that increased margins and consistent revenues should make Sportradar's recent price boost sustainable.
Unlocking Potential Cost Savings and Benefits
Speaking of the IMG Arena acquisition, let's talk about cost savings and potential benefits. Through this deal, Sportradar aims to streamline operations, enhance product offerings, and expand market position, all while capitalizing on IMG's expertise in delivering innovative sports content.
Share Sales on the Horizon
As for the after-hours slump, it might have something to do with news that an affiliate of the Canada Pension Plan Investment Board, an affiliate of Technology Crossover Ventures, and CEO Carsten Koerl plan to offload 23 million shares in a public offering. No worries, though – the underwriters have a 30-day window to snap up an additional 3.45 million shares, and some of that supply will be absorbed by Sportradar, thanks to its $200 million share repurchase program.
In fact, it's worth noting that the share repurchase plan is part of an existing buyback initiative, designed to give the company some much-needed liquidity without diluting existing shareholders. Notably, underwriters won't pocket any fees for the shares repurchased by Sportradar.
It's All About the Data, Sports Fans
Whether you're an investor or a sports enthusiast, the intricacies of the data business are what really drive companies like Genius Sports and Sportradar. In recent years, both firms have faced mounting costs for acquiring sports data rights behind the scenes.
But the good news is that those whopping expenditures seem to have stabilized, so it's unlikely they'll hit the highs of previous years. As analyst Shaun Kelley points out, Sportradar stands a solid chance of witnessing increased margins in the coming years, courtesy of multiple rights renewals in 2023-2024.
With all this being said, it’s worth keeping an eye on Sportradar's final audited Q1 results, set to roll out on May 12th, to get a clearer picture of the company's financial performance.
- The preliminary Q1 financial results of Sportradar showed a revenue range of €307 million to €311 million, with an adjusted EBITDA of €56 million to €58 million and a profit of €20 million to €24 million.
- Although Sportradar's shares tumbled after-hours on April 22nd following the release of these results, they had earlier made significant gains, suggesting profit-taking may be a factor.
- Wall Street appears to be showing increasing support for Sportradar, with Bank of America analyst Shaun Kelley recently upgrading the stock from 'underperform' to 'buy'.
- The potential benefits from the IMG Arena acquisition, including cost savings, enhanced product offerings, and expanded market position, are expected to contribute to Sportradar's sustainability.
- An affiliate of the Canada Pension Plan Investment Board, an affiliate of Technology Crossover Ventures, and CEO Carsten Koerl plan to sell 23 million shares in a public offering, with some of the supply to be absorbed by Sportradar's $200 million share repurchase program.
- As a key player in the sports data sector, Sportradar continues to navigate challenges related to data rights costs, but analysts predict increased margins due to multiple rights renewals in 2023-2024.
