Genius Sports - Earnings Call - Q2 2025

Transcript

Speaker 1

Thank you for standing by. My name is Van and I will be your conference operator today. At this time I would like to welcome everyone to the Genius Sports second quarter 2025 earnings results call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press R followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star one again. Thank you. I would now like to turn the call over to Genius Sports. Please go ahead. Thank you and good morning.

Before we begin, we'd like to remind you that certain statements made during this call may constitute forward-looking statements that are subject to risks that could cause our actual results to differ materially from our historical results or from our forecast. We assume no responsibility for updating forward-looking statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our annual report on Form 20-F filed with the SEC on March 14, 2025. During the call, management will also discuss certain non-GAAP measures that we believe may be useful in evaluating Genius Sports operating performance. These measures should not be considered in isolation or as a substitute for Genius Sports financial results prepared in accordance with U.S. GAAP. A reconciliation of these non-GAAP measures to the most directly comparable U.S.

GAAP measures is available in our earnings press release and earnings presentation which can be found on our website at investors.geniussports.com. With that, I'll now turn the call over to our CEO, Mark Locke. Good morning everyone and I hope you're enjoying the summer. Today I'm pleased to report another quarter of strong financial results, further demonstrating the operating leverage and predictability of our business model. In the second quarter we achieved a 24% growth in group revenue and a record high group adjusted EBITDA margin of 29%. We are also excited to share that we're raising our full year guidance this quarter, driven by continued momentum in the underlying business as well as a few major deals we've announced recently. We now expect to generate group revenue and adjusted EBITDA of $645 million and $135 million, respectively. These recent commercial wins highlight our favorable Mrs.

Bottle and reflect a strong validation of our strategy and the progress we've made executing against it. Over the last few years, I've been clear about my ambition to distribute our technology across the globe in as many stadiums and with as many leagues as possible and why it is so strategically important. The recent successes from this quarter are clear examples of how we're shaping the future of league partnerships and why we are even more confident about our path forward. First, our GeniusIQ platform was on full display for the FIBA Under 19 Basketball World Cup last month. As part of our longstanding partnership with FIBA dating over 20 years, we're now delivering computer vision and AI technology to power the next generation of fan engagement.

For instance, this tournament included real-time optical tracking data, augmented broadcasts to deliver immersive viewing experiences for fans, and rich performance insights for coaches and players to optimize training and game strategies. GeniusIQ is a single platform utilizing computer vision, AI, and machine learning to power many solutions for leagues and teams, sportsbooks, broadcasters, and advertisers. This technology is integral to FIBA's operations and plays a critical role in unlocking new monetization opportunities for the next 10 years of our exclusive partnership with global basketball. GeniusIQ is also playing an increasingly central role in the world of soccer. Whether it's powering coaching tools, broadcast augmentations, BetVision, or Semi-Automated Offside Technology (SAOT), our technology is helping to modernize the game. We're addressing critical needs for leagues and rapidly scaling these innovations across the globe.

It is also what makes us an indispensable partner to leagues and federations and extremely difficult to replace. This technology is a clear differentiator and a key reason why we have won major rights deals in the last few weeks. I'll quickly highlight a few high-profile examples to demonstrate how our strategy is working. First, we've just won the exclusive data and streaming rights to Serie A, the top professional soccer league in Italy and among the highest quality content globally. For those less familiar with the European sports betting landscape, Italy is the largest market in Europe in terms of annual GGR, making Serie A one of the most valuable rights in Europe. These rights became available after Stats Perform withdrew from its contract last year. Serie A ultimately chose Genius Sports based on a more holistic partnership centered around technology capabilities rather than rights fees alone.

For instance, we now plan to launch BetVision for Serie A, driving even greater fan engagement and betting volume through a differentiated immersive interface. This further illustrates the difference in our strategic approach and why we are winning major rights deals on a cost-effective basis. We've also just signed a deal to provide Belgium Pro League with Semi-Automated Offside Technology, further expanding our global distribution of GeniusIQ. This deal also marked an important launch pad to a much larger partnership with the European Leagues, which brings me to the next major announcement. Our technology has just won us the exclusive rights to the European Leagues from IMG Arena. There are several reasons why I'm excited about this and why we believe it marks a critical turning point for Genius Sports. First, this gives us exclusive rights to thousands of top-tier soccer events spanning 18 different member competitions across Europe.

This, along with Serie A and our existing portfolio including the English Premier League and several others, has tipped the scales and given Genius Sports a leading position in European soccer. We've won these rights because of our differentiated technology, resulting in reduced rights fees that are just a fraction of what IMG Arena had previously paid. This also sets the foundation for a long-term collaborative partnership with the European Leagues as GeniusIQ will become the new technology infrastructure to support several future initiatives. As our technology is deployed across hundreds of venues, these leagues and teams will begin to rely more heavily on this, making GeniusIQ incredibly sticky and difficult to replace. This creates a sustainable long-term model with high barriers to entry and lays the groundwork for additional monetization opportunities for many years. This partnership further demonstrates how we are fundamentally transforming the traditional rights model.

By leveraging our technology to secure rights deals, we are reducing rights costs while deepening our competitive moat and paving the way for future technological advancements. The evolution of the rights market is shifting the competitive dynamics in our favor and these deals continue to validate our strategy. Finally, we've also extended and expanded our partnership with the NFL over the last four years. We've delivered on several tech initiatives, and we continue to expand our product roadmap to support some of the NFL's next strategic opportunities. This reflects our strong relationship that we've built over the past four years and represents a natural evolution of our continued collaboration. This deal now extends our exclusive betting data rights through to the 2030 Super Bowl.

We've also extended our watch and bet rights for in-market and national NFL games on phone and tablet to be coterminous with our data rights, allowing us to continue providing BetVision to the global sports betting market for at least the next five NFL seasons. BetVision has proven to drive more interactive engagement and live betting over the last two seasons, and we're excited to continue innovating this product even further. On that note, this expanded partnership also gives us exclusive rights to sell select in-game advertising inventory on BetVision. This unique inventory can only be accessed through FanHub and further strengthens our value proposition to advertisers. In fact, this inventory has already been sold out up front of the upcoming NFL season, a clear signal of demand for this type of offering.

We are now feeling more confident than ever about FanHub's continued growth potential in the second half of this year. As such, we now expect full-year media revenue growth of at least 20%, up from our initial forecast for low to mid-teens growth for the full year. We continue to make key advancements to the FanHub platform, giving advertisers more tools to manage and measure digital advertising campaigns and targeting sports audiences. Additionally, we've maintained a consistent presence at industry events and even hosted our own NewFront in New York City, attracting over 300 attendees including several agencies and direct brands. As a result, we've signed several deals with well-known brands this year including Walmart, Pepsi, Dairy Queen, and Yeti, just to name a few.

We've also just announced a major deal with a major advertising agency, PMG, who represents some of the biggest brands in the world including Apple, Nike, Best Western, TurboTax, Beats by Dre, and several others. Our media business has substantial long-term growth potential as we continue to broaden our customer base to include non-betting brands and agencies. FanHub is gaining significant traction as evidenced by our recently announced partnerships with advertisers increasingly allocating budgets to live sports. Genius is well positioned to capitalize on this growing market opportunity. In summary, the key takeaways from this quarter are simple. We're seeing strong momentum across all aspects of the business. We've won major deals that will drive additional revenue in both betting and media, allowing us to raise our guidance for the year.

We're leveraging our technology to win key rights deals in a cost effective manner while shifting the competitive dynamics in our favor and widening the competitive moat. Our technology is differentiated and difficult to displace, further solidifying our long term position with leagues and federations on a global scale. This technology is also unlocking additional monetization opportunities, enabling us to maintain consistent long term revenue growth, and we now have certainty of our largest fixed costs over a multi year period, paving a clear path for continued EBITDA margin expansion to our long term target of at least 30%. We are well positioned for continued near term and long term financial success, and I will now turn to Nick to discuss the quarter's results in more detail. First, I'd like to acknowledge the CFO transition we announced this morning.

As we have indicated in the last few calls, the gravitational center of the business is shifting to New York as the U.S. becomes an increasingly important part of our strategy. We have expanded our U.S. Senior leadership team as previously announced, and we're excited to now welcome Brian Castellani, who will join Genius Sports in New York as Chief Financial Officer. Brian brings over 20 years of experience across some of the most distinguished media organizations in the world, including ESPN, The Walt Disney Company, and more recently Warner Music Group, where he served as CFO. I'd like to sincerely thank Nick for his dedication to Genius Sports over the last six years, as he has been an integral part of our growth and transformation as a public company. Nick will remain actively engaged to help facilitate a smooth and orderly transition.

We wish Nick the best of luck in his next endeavor and look forward to formally introducing Brian on our next call. Thank you, Mark. The past six years have been an incredible journey and I'm really confident that Brian and the entire team are well equipped to drive continued growth, operating excellence, and long-term value creation for the shareholders. Now, continuing to the results, Q2 is typically a straightforward quarter for us given the quieter sporting calendar this time of year. As such, most revenue in the quarter was derived from fixed fee sportsbook contracts outside of the U.S. where we have much higher predictability, so our results were largely in line with expectations. Betting revenue increased 30% year on year to $88 million.

This increase was largely the result of price increases from contract renewals and expansion of value-added services and products like BetVision for soccer, for example, which was launched in the quarter. Media revenue returned to growth this quarter, increasing 4% year on year to $19 million. Again, given the quieter sporting calendar in the summer months, we expect most of this year's growth will occur in the second half during the peak season for major sporting events. As Mark highlighted, we've also just signed an exciting new deal with PMG, which should contribute near-term revenue and further support this growth. With this in mind, we are now tracking above our initial expectations of low to mid-teens media revenue growth for the full year, and we now expect growth in the low 20s. Our sports tech revenue increased 22% year on year to $13 million.

As you've heard Mark discuss, leagues and federations across the globe are utilizing GeniusIQ to empower many key objectives ranging from automated officiating, coaching tools, broadcasting technology, and much more. This technology is gaining strong momentum and is now driving meaningful revenue growth as we continue to scale this globally. Turning quickly to costs, we continue to take a disciplined approach in managing cash operating expenses. That said, you will see a one-time increase in stock-based compensation in the second quarter, primarily tied to the tranche of warrants issued to the NFL as part of our expanded partnership, which vested upon announcement. To be clear, the equity component of our NFL partnership is unique, and we do not expect to offer equity to any other leagues in the future.

Otherwise, we want to emphasize that this is a non-recurring increase, and our cost base remains well controlled, and we continue to demonstrate strong operating leverage. To further illustrate our operating leverage, we have now generated over $47 million of group revenue and added $26 million of group adjusted EBITDA through the first half of the year, representing a 55% incremental margin in Q2. Specifically, our group revenue growth contributed to adjusted EBITDA at a 57% incremental margin. This resulted in group adjusted EBITDA growth of 64% year on year to $34 million. This also translated to 700 bps of margin expansion, setting a new quarterly record margin of 29%. Given the exciting developments you've heard from Mark, we are now raising our group revenue and adjusted EBITDA guidance to $645 million and $135 million, respectively.

This equates to 26% group revenue growth, 57% group growth in adjusted EBITDA, and over 400 basis points of EBITDA margin expansion to 21%. To be clear, as it relates to FX, our reiterated guidance from the Q1 earnings call in May assumed some level of appreciation of the sterling against the U.S. Dollar through the year, based on our current forecast. The difference in our estimates using today's exchange rate is immaterial, and therefore our increased guidance is a function of our newly announced partnership and the strong underlying business performance rather than any FX impact. Our increased guidance for the year is primarily driven by betting and media. As I said, we expect our full year media revenue to increase year on year to below 20% range and our betting revenue to increase by about 30%, consistent with the last two years.

We also expect to increase our annual cash flow in the year, with most of the cash inflow occurring in the second half of the year, which again is consistent with prior years. As we conclude our prepared remarks, it is worth reiterating our confidence in both the near term and long term model. We remain very well positioned for continued margin expansion and cash flow growth for the next several years, especially as we've just extended our largest rights agreement through the end of the decade on a fixed cost basis. This gives us even greater visibility and predictability moving forward. We are also continuing to validate our core strategy through consistent execution, giving us strong momentum as we enter the peak sporting calendar in just a couple of months. We look forward to updating you again next quarter.

In the meantime, we now conclude our remarks and open the line to Q and A. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Please limit your question to one and one follow up. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Jordan Bender from Citizens. Please go ahead, everyone. Good morning. I assume the tie up between ESPN and the NFL can have some sort of positive impact on the business. Mark, I'm wondering if you can maybe give your view on where you believe it enhances any of your technology offerings. Thank you. Yeah.

Speaker 0

Clearly, we see this as a positive thing for the business. We've been investing heavily in media tech around this space for a long time. Obviously, it's pretty early days, so we don't want to comment too far, but clearly the areas of our investment, what you've seen through things like BetVision, some of the augmentation that we've done, as well as some of the ad provisioning that we've been investing in and monetizing recently, we expect to be having positive conversations with them around that.

Speaker 1

Great, thank you. I just want to follow up on FanHub and the marketing platform. I think people generally have a hard time translating maybe the earnings power of some of the recent announcements with FanHub to the business in the medium and long term. I was wondering if you can maybe just elaborate on that revenue potential, whether it's the size of the opportunity over time or how big of that piece can be the overall part of your business. Just any color that can kind of help us kind of model that out over the next couple years.

Speaker 2

Sure, yeah.

Speaker 0

I mean, it's pretty simple. The way we think about it is we think about it in terms of spend and customers. So the number of customers that we've got exposure to and the amount of spend that the advertising community want to put through to their specific sports fans. The media business is performing, as you can see, much better than the last quarter. I think we were a little behind where we wanted to be, if we're honest. That's rebounded back very nicely. We're seeing strong growth coming out of that over the rest of the year. We expect the media business, size wise, to be at least the same size and, frankly, longer term in excess of the size of the betting business on a medium to long term basis.

Speaker 1

Great, thank you and Nick, best of luck. Your next question comes from the line of Barry Jonas from Truist. Let's go ahead. Hey, guys. Yesterday a competitor noted they couldn't make the math work for Serie A in the European Leagues. Appreciate the very helpful comments so far on the call, but maybe walk through a little more your financial or ROI expectations for those contracts. Thanks.

Speaker 0

Yeah, look, I mean, we've got a pretty high bar for making these deals give us a positive return. We've been pretty clear historically that we've got all the rights that we need, and we only enter into deals if those rights deals generate positive returns. We've had that focus. The specific deal that I think you're referring to meets all of those criteria, and it's something that we feel very positive about. Clearly, the business has invested a lot over the last few years in technology, and we've been pretty clear that over the course of that investment, we would be seeing reduction in rights fees and our ability to trade technology for improved commercial deals. It's something that we're starting to see across all of the rights deals that we're doing and all of the relationships with the sports leagues that we're having.

We feel very positive about the deals that we've done. They meet the criteria that we've been very, very clear about with you guys in the past. It's pushing up our EBITDA, it's pushing up our revenue, and they're immediately accretive. It really is proving the model that we've been championing for a long time and the investments that we've been making in that technology and our ability to secure those deals on very favorable terms.

Speaker 1

Got it. That's really helpful. Just given the flurry of announcements that have come out, curious, are there any other material rights deals you're eyeing to compete on in the near term? No.

Speaker 0

I mean, you sort of don't want to really repeat myself, but we've got everything that we really need and we have had for a while. We'll always look at new rights deals. There's quite an interesting dynamic in the market. The market has consolidated quite a lot over the last while. Obviously, IMG and Stats and really the duopolistic nature of the market I think has become very clear to everybody. Obviously, reading the commentary and a lot of the press that's out there from you guys is showing that that's become really well understood. I think as time goes on, the rights become even more rational. I think it's rationalized a lot recently. I think we and our competitor have shown good financial discipline in the rights deals that we've done and I suspect that will continue over the coming future.

Speaker 1

Your next question comes from the line of Ryan Sigdahl from Craig Hallum Capital Group. Let's go ahead. Hey, good day guys and all the best, Nick. Want to stay kind of on the new awards. Appreciate all the commentary about the economics and what you guys are providing versus previous. Can you comment? The guidance increase assumes 40% incremental margins on the upside. Several of those seasons are starting, I think, in the back half of this year and will impact. Guess how much is in guidance for Serie A and the European Leagues. We'll maybe start there.

Speaker 2

Hey Ryan, thanks. I mean effectively all those three announcements that we've made this week are in guide together with the underlying momentum within the business. You're right. Some of the Euro leagues have actually already kicked off and Serie A starts in a couple of weeks. The commercial guys have got some fun and games over the next month or so. Yeah, they're all built into the guide and as you say, it's at a 40% drop through. Just to reiterate what Mark said actually a second ago in relation to those new deals, they are immediately accretive to us from an EBITDA perspective. You're seeing that in the updated guide that we've just given.

Speaker 1

Very good. You mentioned that the NFL ad inventory is sold out ahead of the season already. That's fantastic. At this point, curious how much more opportunity there is to add more placement slots or kind of build on that, or is it kind of what sold is sold at this point?

Speaker 0

Yeah, it's a really good question. It's obviously a focus for us as that product develops. There are a couple of levers for growth there. One is around additional sports and scale. We're adding, as you would have seen, new sports to that product set and that rollout, as you can see from some of the deals that we've recently announced, is looking very positive. The specific NFL inventory is something that we're obviously very aware of. We're working closely with our partners to find additional ways of making sure that we're creating monetization opportunities through that. Suffice to say it's a fairly large focus for the team to make sure that we're optimizing those relationships and the products that we've got.

Speaker 1

Thanks, Mark. Best wishes, Nick, and very nice job, guys. Your next question comes from the line of Ben Miller from Goldman Sachs. Please go ahead. Taking the questions just on the updated guidance. Again, I'm just curious if you could expand on the bridge for the increased guidance. How much of that is specifically related to the new league partnerships versus just broader organic trends you're expecting in the betting segment in the back half, and then obviously the strong second half media segment expectations?

Speaker 2

Yeah. Hey, Ben, I mean I think we said in the prepared remarks certainly if we look at it, I think there's clearly some momentum in the second half of the year with our media business. Not just the deals that we've announced, including the PMG deal that we announced last week, but also as Mark talked about in the prepared remarks in relation to the additional products and the inventories that came in the back of the NFL extension. It says both effectively and what we've said is we expect media as a whole to be low 20% grower for the year, which obviously is where we sit today is an acceleration and we talked about it earlier in the year and obviously we've got more visibility of that position today on the betting side.

You can see that the betting in H1 shows significant momentum with the growth, 30% growth in the first half of the year. We always said that that growth would slow down a little bit in the second half because if you remember, we were growing at sort of 45%, 46% at the back end of 2024. These new deals, as I said in the early question to Ryan, I think is that they're immediately accretive and therefore expecting betting as a whole to be around about 30% up when you look across the year.

Speaker 1

Great. Just as a follow up on the commentary around the expansion of value added services and products, can you provide any color on what attach rates look like today and where you think that can get to to help frame the potential for further monetization aside from the like for like price increases that might come through over time.

Speaker 2

Yeah. Hey Ben, I guess as you know we have a huge suite of products, and as you've seen from our announcements, they continue to grow week by week. I mean, taking BetVision that obviously we've talked to you guys a lot about, is a really good example when you talk about adoption rates. As you know, within the U.S. we've had some significant success with our NFL BetVision product over the last two years, and we're very excited about the upcoming season and all the product advances that you'll see through the 2025, 2026 NFL season. For that, as we've talked about in the prepared remarks and indeed across the last couple of months, we're also very excited about where we're allowed to BetVision for other sports and much more sort of mass participation and higher number of events.

Obviously, specifically talking about soccer and basketball, we're beginning to see some really good uptake there. That's where we expect to see some real rubber hitting the road effectively on those two sports over the course of the next six months. I'd anticipate seeing a lot more uptake on BetVision for those two sports for the rest of 2025.

Speaker 1

Great, thanks so much. Your next question comes from the line of Jed Kelly from Oppenheimer. Please go ahead. Hey, great, thanks for taking my question. Just on the recent contract wins, you know, you've obviously boosted your European football portfolio. Is there a timeline on when you do negotiations with some of the European sportsbook operators we should be watching? I have a follow up question.

Speaker 2

Yeah.

Speaker 0

Hey Jed. Yeah. We're obviously under contract with, you know, I'll say most of the operators in Europe. If the question is related to the sort of, you know, the way that revenue flows through, these contracts are additional to the existing contracts that we've got. Whilst there's a sort of, I guess a mother contract if you like, these are additional products that we'll be selling to those sports books. That comes as part of the new deals that we've just announced and is happening as Nick said now.

Speaker 1

Great. Just as a follow up on some of the new FanHub contracts, is that going to be more of the traditional managed spend or is it going to be more self service? Will it be kind of booked on the financials as net revenue versus gross? Thanks.

Speaker 2

Thank you, Nick. Firstly, obviously we're very excited about announcing the agency deals, as we said before, that this is really unlocking incremental media spend from customers. It's a really good proof point about how we're progressing on that basis. I think as Mark said earlier, one of the key things is innovative opportunities in sports are becoming increasingly important to brands, therefore all the major agencies are looking at how they can target the sports customers in new ways. Obviously we, Jed, sit right at the heart of that in terms of that specific deal. If you talk about the PMG deal, it was only announced last week. We're talking with them and their brands about really the whole suite of our media products and obviously on an ongoing basis. Once we get some of those months behind us.

Just from an accounting perspective, Jed, if that's what you're alluding to, when we get into the self serve, that's likely to be on a net basis and when we continue to do some programmatic marketing on a managed basis, that would be on the gross basis. That's how we've always accounted for.

Speaker 0

I think strategically from our point of view, Nick used the word proof point. I think that's a really important focus. As a business, we've been working hard on developing the product set, and the goal has been the distribution of this product set to the brands. The best way to do that is in partnership with the agencies. This is a very important deal, it's a very important step in our growth as it allows those major brands that we mentioned to have access to the inventory and to our portfolio of products, which clearly from a strategic point of view and frankly a future revenue point of view is critically important. We're very, very excited about this. It's a really good proof point, and it puts us in a very strong position with our new product set.

Speaker 1

Thank you. Your next question comes from the line of Bernie McTernan from Nedum. Please go ahead. Great, thanks for taking questions and just first Nick, it's been great working with you and all the best. Wanted to follow up on media. I know some of the big folks of the call, but back of the envelope numbers suggest media revenue should be up about 60% in the back half of the year. Mark, given your comments that eventually over the long term you think media could be larger than betting revenue, how linear should we expect media to be from here and are there any major bottlenecks, whether it's ad inventory or anything else we should be thinking about in order to get to those ultimate goals?

Speaker 2

Hey Ben, it's Nate. Thanks for your comments. Just so everyone's aware, obviously I'm around really and I'm delighted Brian's joining. You've seen his experience. He's going to add enormous amount of value to this organization. You haven't quite got rid of me yet. I'm going to be around until certainly through the fall and indeed probably attending some of your conferences in that time. Anyway, onto the more important stuff around your media question. You're right, Bernie, your back of the envelope maths is impressive. I think we're looking at around Q3 and Q4 both at around a 60% media increase year on year. In the short term that's really a layering impact of all the tailwinds that we're seeing in there. As you know, we're always back half and we said in last quarter we're going to be back half loaded.

As you know we always start with a really good base of minimum media contracts through our sportsbook deals. Of course we're entering those second year of those deals in the kickoff of the season shortly on NFL. It's not just that. We've talked about the agency deals, Mark's just talked about that and the importance of those that we've just announced and the inventory we talked, I think in Ryan's question in relation to all the products and all the inventory. If you layer all of those, you really start seeing that acceleration of growth on the media position for 2025 on a long term basis. I'll hand over to Mark in a second to add any color on this. On a long term basis we are extremely well set up from a technology perspective, from a partnership perspective and from a sports perspective.

Sport in itself, as I'm sure, as you guys know when you're speaking to brands themselves, is absolutely in the sweet spot of where people are wanting to advertise and looking for innovative ways to reach the sports target audience. Genius is absolutely at the thick of that. We've seen that when we did our new front event, which I think a few of you attended back in May, we saw that when we were attending Cannes Lion this early in this year. We're feeling very good about it.

Speaker 1

Your next question comes from the line of Steve Vittala from Deutsche Bank. The mix of betting tech revenue, though the fixed revenue did accelerate materially in the quarter. Can you talk about how we should think about the fixed revenue growth moving forward?

Speaker 2

Hey Steve, it's Nick. Q2 specifically, obviously is a little bit more weighted to the non-U.S. because of the sports calendar, and as you know, traditionally and continuing to do outside of the U.S., we tend to have more SaaS-style, all-you-can-eat style contracts. You're seeing that growth coming through from Europe. You'll see that in European numbers. It's worth reminding everyone on the call that I know we concentrate a lot on our U.S. deals, and we've seen a significant ability to take price and indeed provide additional products to European sportsbooks as well on the back of not just our NFL deals, but our extension of things like U.K. soccer that we now have until the decade.

Speaker 1

Okay, thanks. Just to follow up on the balance sheet, I think you have about $222 million of cash now plus positive free cash flow moving forward. Can you talk about the options of what you're going to do with that?

Speaker 2

Yeah, hey Steve, it's Nick again. As I reiterated in the prepared remarks earlier, we expect it to be positive cash position. Now what are we looking at? We were very clear around potential M&A positions for 2025. We're continuing to be very disciplined in that area and looking to get the right product. We are absolutely looking right now, albeit as we said to you before, Steve, we don't need anything. We're just looking at things that we feel can accelerate the growth of our business. That's absolutely the key focus of our cash positions as housekeeping. We also announced a share buyback position last quarter. As I said, that's far less of a priority than M&A, but it's something that's another string to our play that we have.

Speaker 0

Yeah, it's probably worth mentioning on this sort of M&A. We are pretty busy looking at quite a lot of businesses, as you would expect over the period. The bar, however, that we have is extremely high for these deals. There's not a lot of businesses that meet our growth requirements and, frankly, the cash flow and EBITDA requirements that we have for the business. There aren't a huge number of those businesses that actually achieve that. It is a focus for the business. I think the other thing to say is that our organic investment is working. You're seeing that in the reduced rights fee.

I guess the change in this sort of interest is just the structure of the rights deals that we're starting to see and the change in the way that those models are operating with that investment that we've been making in the business over the years is coming through. We're feeling good about our ability to invest with the right level of ROI and have a high bar and a high focus on getting the right returns on that basis as well.

Speaker 1

Okay, great. Appreciate it. Your next question comes from the line of Josh Linforth from B. Riley Securities. Please go ahead. Yeah, great to see the accretive league partnerships and the raised guidance here for 2025. I just wanted to ask, how do you think, how much exactly has the company's market share really increased now with these new partnerships when you look at European software relative to what it was, and how long is it going to take to get GeniusIQ fully deployed across all these new European leagues? Are there any key kind of milestones we should be tracking as you progress on that front?

Speaker 2

Hey Josh, it's Nick. Market share is always a difficult one to answer because, you know, different peers have different products and sports books work with all of us. I think you raise a good point though in terms of soccer, particularly European soccer. We're in a very strong position there. When you think about what our portfolio adds and the European Leagues as well as Serie A, European Leagues add also significant quantity of events, around about 8,000 events as well. We're really happy with that position. That is undoubtedly helping our relationships with the European sports books in terms of rollout. You're right to call that out as an important part of the deal. On the European deals, we have now the ability, I think it's north of 400 stadiums on a European soccer basis, to put GeniusIQ in there.

What I would say is we have the ability to do that at the pace that we choose to do it, which I think is an important part so we can manage that effectively where we get it right strategically. At the same point in time, we are managing investors' expectations, street's expectations, and investment expectations. I would be expecting us to start rolling that out back end of this year. We're very excited about what the technology rollout will be able to bring us on a long-term basis.

Speaker 0

I think on market share, it's also sort of just, I benched it early. Kind of reiterating here is, you know, the market is consolidating to the sort of very dual ballist focus here. You know, market share by definition is something that is increasing, and you're seeing that coming through the numbers. I think the focus that we've had around the data rights deals, you know, the EPFL, Serie A, is that data is a prerequisite, you need to have the data. It's not a nice to have, it's a must have. We feel good about our position in terms of the way that market share is increasing.

Speaker 1

Thank you. Last question for me. As you start to deploy GeniusIQ across all these European stadiums, what do you think is the highest value opportunity in terms of incremental platform service revenue beyond this core betting data? Typically, how do those unit economics compare to traditional betting fees that you guys get?

Speaker 2

Yeah. Hey, Josh. I mean the great thing about the technology is the technology we're putting in GeniusIQ has so many different use cases. You've heard us talk about some of the things we do in relation to broadcasters and augmentation, what we do in relation to clubs and performance, what we're doing in terms of coaching tools with leagues, indeed what we're doing with Semi-Automated Offside Technology with the Premier League, for example. The great news for us is that all of those use cases come off the back of the same technology and therefore there'll be some leagues who we think certain products are more appropriate than to other leagues and some that are more cost effective for us to use than other leagues. It's not one size fits all. What I'd say is getting that, you've heard Mark before about getting that out there.

Getting our tech into these stadiums is an important proof point of us again over the course of the next 18 months. This is a great deal where we can effectively capture large parts of the European stock market.

Speaker 1

Appreciate the context. Thank you. Your next question comes from the line of Mike Hickey from Benchmark. Please go ahead. Hey Mark, Nick, Brandon, Charles, nice quarter guys and great guidelines. Two topics from us. First on the CFO departure, obviously Nick, glad to see you go. Clearly you've been a steady hand here and strong partner for all of us during a very pivotal phase here for Genius. Good luck to you and thank you. That said, Mark, what skill set or experience were you most focused on in selecting Brian as the new CFO and how do you see his background helping Genius in the next chapter here? Another follow up.

Speaker 2

Yeah.

Speaker 0

Hey Mike, I'll let Nick give his swan song in a second.

Speaker 2

But look.

Speaker 0

We're super excited about Brian's joining us. His background in media is something that was a big focus of it. Nick sort of mentioned this before. There's been quite a shift to the U.S. Nick, I think, is, I've heard him a thousand times say that at some point we'll see a New York-based CFO and that's indeed his prediction of the future was correct. That's exactly what we're seeing. Brian's history, media coming from Warner Music Group and The Walt Disney Company. He's got a very strong understanding of the global rights market, understanding of the media space, you'd understand, obviously, work with ESPN and good understanding of that history. That just sort of consolidates a lot of our strategy that we've got. On top of that, he's got a ton of experience. He's obviously worked in the public markets.

One of the phrases, when we look at our business is, we always want to be better and we always want to know what good looks like and he certainly knows what good looks like coming from some of the business that he has. We're very excited about the next step in the evolution of the business that Brian can bring.

Speaker 2

His.

Speaker 0

Transition with Nick we think will be over a sort of two, three month period. I'll let Nick.

Speaker 2

Yeah, nothing to add to that. Thanks. Mike's favorite time to say that, and as I said earlier, I think to Bernie, you know, I'm not going anywhere. I'm around for several months, and there'll be a very smooth transition. I'll be interested as a shareholder of Genius Sports and a massive supporter of Mark, Charles, Brandon, and the team, Brian, to see where the business goes.

Speaker 1

Nice. Good luck, Nick, and we'll be excited to see where you head in the future. Next topic. Mark, Nick on endgame. As we sort of head pretty soon here, we've got a month and we're in the NFL season. I think we're all really excited. Endgame is obviously, you know, ending last year. There was a lot of energy, a lot of growth there, and you were a big part of that with your BetVision product. I think, Nick, you expressed sort of, maybe it was last call, rather modest growth expectations in endgame despite that enthusiasm from operators and certainly also from players.

Just checking on your updated guidance here, if that's still the case, and then depending upon sort of how you approach that modeling opportunity, do you see a scenario here where if that energy we saw at the end of last season in terms of in-game participation from players, if that stronger engagement in part through BetVision could drive upside to your current performance expectations. Thank you, guys. Yeah.

Speaker 2

Hey, Mike. I think you quite rightly call out, we've been saying this for a number of years that effectively in-game betting is coming, but it needs to be a product-led evolution. We've seen that and we continue to see that. The last NFL season was very successful for us, as you say, from BetVision. We're in the vanguard of that move and we expect that to continue through the 2025, 2026 season as we add more product down the pipes to the U.S. sportsbooks. You know me, I've been relatively conservative in the guide that we've just given you. Obviously, if it moves significantly in the end of this season, then there'll be upside to Genius Sports at that point. Let's wait and see. We'll know a little bit more in about four weeks.

Speaker 1

Thank you, guys. Good luck. Your next question comes from the line of Chad Beynon from Macquarie. Let's go ahead. Good morning. Thanks for taking my question and best of luck. Nick, just one for me. We've talked a lot about some of the recent wins and some of these major mature or mature but growing leagues and markets. One thing we haven't talked about is some of the emerging markets that you've discussed in the past, whether it's India or Africa or Brazil. Where are we with some of these emerging markets? Are there still big opportunities for you to implement your technology into those and do what you've done in some of the bigger ones? Thank you.

Speaker 0

Yeah, it's a good question. I mean, as you'll see, I think I can't remember what slide it was, but that, you know, we put it out there as a 43% slide. There is 43% growth from rest of world in revenue. We see big opportunities in those markets. Obviously Brazil, you know, we've talked about sort of fill it ad infinitum. It's a big opportunity. There's a lot of the same sportsbooks. We have relationships with a lot of those guys and that's something that is obviously a focus for the business and I think we've talked about historically. On a global basis, with a strong eye on regulated markets, there's interesting developments and again, we're seeing strong growth from that. You can see from the numbers and we expect that to continue. Coming back to Europe, Europe is still a very big focus for us.

We're seeing 26% growth in Europe. We see a lot of opportunity, an awful lot of opportunity actually in Europe for continued growth and continued product distribution and investment. It's an exciting market. I know we always spend a lot of time talking about America, but we do have a lot of focus on that European growth metric as well.

Speaker 1

Thank you, Mark. Appreciate it. Your last question comes from the line of Greg Givas from Northland Securities. Please go ahead. Hey, Mark and Nick, thanks for taking the questions. Congrats on the results and the recent rights deals. You know, wanted to ask on the estimated timing of BetVision rollout for additional sports and, you know, whether maybe your guidance assumes its launch for anything incremental in the back half regarding, you know, growth in the number of BetVision events. Yeah.

Speaker 2

Hey, Greg, soccer's live right now. Obviously, some of the announcements we've made over the last week or so, we're expecting, I would anticipate BetVision to be rolled out to Serie A, for example, as really important content for European sportsbooks. Anything like that is effectively built into the guide. It's part of the accretion and the guide. Basketball, I think we're going live in this quarter. Expect to hear more through this quarter and probably at the Q3 earnings announcement.

Speaker 1

Okay, great. A quick follow up. Just regarding your commentary on changes in FX related impacts, could you maybe specify or remind me kind of the dollar impact or so on the change and your assumptions?

Speaker 2

Yeah. Greg, is that, are you talking about in the quarter that's just been, or in the forecast going forward?

Speaker 1

In the forecast, please.

Speaker 2

Yeah. We updated actually the market at the end of last quarter. We had assumed an appreciation of the sterling against dollar in that forecast and again, have done for the second half of the year. Therefore, effectively, the current spot rate is effectively what we've used going forward and has always been in our guide. What we're seeing is that that 25% revenue increase and the 10% EBITDA increase are effectively outside of foreign exchange and all about momentum in the end of our business.

Speaker 1

Understood. Thanks very much, ladies and gentlemen. That concludes today's call. Thank you all for joining. You may now disconnect.