Genius Sports‘ share price remains stable in the face of a widened loss during Q2 trading.
The sportstech’s shares on the NYSE stand at $8.48 (£6.29) at the time of writing, having finished at $8.30 at the close of trading yesterday afternoon.
It has particularly benefited from signing back-to-back deals with Polymarket and Kalshi, the two biggest prediction market platforms globally, making good on leadership’s ambitions to expand in this sector as outlined earlier in the year.
Q2 ended on a mixed note for the company, however. The firm’s net loss rose significantly by 42% from $53.9m to $76.7m (£56.8m), while for the H1 the loss rose 112.7% to $132.2m (£62.1m).
Investment costs will be one reason for this. Genius’ unaudited financials show an increase in investment from £32.6m to £40.8m.The biggest impact is the lingering effects of the $1.2bn acquisition of sports media group Legend in Q1.
Genius management has attributed the loss to non-recurring transaction-related expenses – $28.9m to be exact, with $13.8m of net interest expenses as a result of loan financing and an $8m loss on fair value remeasurement of contingent consideration.
A more positive sign is the group’s EBITDA. While Genius’ loss widened, Q2 adjusted EBITDA rose 54% from $34.1m to $52.6m while the H1 figure rose 42% from £53.9m to £76.6m.
Looking ahead to the year end, the firm upgraded its adjusted EBITDA to between $285m-$295m from previous guidance of $270-$280m.
“We continue to realise the benefits of the infrastructure we’ve spent years building,” said Marke Locke, founder and Chief Executive Officer of Genius Sports.
“Advertisers are placing greater value on our combination of official data and audience, prediction markets are opening an entirely new avenue for growth, and our core Betting business continues to outperform.”
Leadership keeps faith in GeniusIQ
Revenue growth paints a much more positive picture for Genius, building on EBITDA.
Group revenue was up 64.7% from $118.7m to $195.5m in Q2, and up by 46% from $262.7m to $383.4m in H1.
The betting technology, content and services division saw revenue rise 27.5% in Q2 to $117m ($92m) and 30.6% to $263.6m ($201.7m) in H1.
Finally, the media technology, content and services division saw Q2 revenue increase an enormous 192.8% from $26.7m to $78.1m and H1 revenue jump 96.6% from $61m to $119.9m.
While Genius’ share price still hasn’t quite recovered from the loss of market confidence following the Legend acquisition, something some analysts speaking to SBC News didn’t think was entirely fair on the firm, leadership has a lot of confidence.
The continued integration of Legend after the May closure of the acquisition and rollout of the GeniusIQ artificial intelligence product in European football, the latter falling under the media technology division, are cited as particularly significant by company leadership.
“As we continue to scale GeniusIQ, that foundation positions Genius to deliver durable long-term growth, profitability and cash generation,” Locke continued.
“In our first quarter as a combined business, we exceeded our guidance on revenue, Adjusted EBITDA and cash, raised our full-year outlook, and are already seeing the benefits of the Legend integration.”