Sportradar Forecasts Significant Earnings and Revenue Growth

Sportradar Forecasts Big Earnings, Revenue Growth

Sportradar (NASDAQ: SRAD) closed higher on Tuesday after revealing to shareholders its expectations for significant earnings and revenue growth through 2027. The Swiss sports betting data provider announced these projections during its investor day, where it forecasted 2027 revenue of $1.83 billion, along with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $492.32 million. This suggests compound annual growth rates (CAGR) of 15% and 27%, respectively. The company noted that new products and innovations will play a vital role in enhancing its long-term take rate.

Sportradar believes it is well-positioned to surpass industry growth and capture an increasing share of in-play betting, thanks to its market-leading product portfolio designed to engage sports fans deeply. The company’s commercial strategy also focuses on addressing the evolving needs of its clients. In-game, or live betting, is recognized as one of the fastest-growing segments in the domestic sports wagering landscape, heavily dependent on technology. This evolving demand could bode well for Sportradar in the long run.

Furthermore, Sportradar anticipates that artificial intelligence (AI) will be a significant growth driver as it enhances its technology products and services available to sportsbook clients. “A robust tech stack and deep AI capabilities enable the Company to improve efficiencies, accelerate innovation and provide an opportunity to lower growth barriers for partners and clients in the sports ecosystem,” the company stated in its press release. This commentary follows an announcement made last November regarding the rollout of an AI-based audio advertising platform for casino and sportsbook clients. Through this platform, gaming companies can create customized advertisements during live games that could be relevant to bettors, potentially increasing betting handle.

The broader application of AI and its adoption by clients could assist Sportradar in expanding its EBITDA margin by 700 basis points by 2027. Additionally, the company anticipates lifting its free cash flow to approximately $300 million and boosting its free cash flow conversion rate to 60% by that same year.

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In addition to its strengths in sports wagering, Sportradar sees potential growth opportunities in iGaming, particularly in the US, where penetration for this form of wagering is still limited. The company, which has strong relationships with some of the largest sports leagues in the world, is frequently viewed as a technology play within the sports betting industry.

While this perspective holds true, Sportradar also acknowledges significant possibilities in adjacent markets. “The Company will continue to look at opportunities in adjacent markets, including leveraging its existing 360-degree marketing services capabilities in the adjacent online casino market, opening up a potential $2 billion serviceable addressable market (SAM),” the firm added in its statement.