Genius Sports slips to full-year loss as staffing costs rise

14 October 2019

Genius Sports Group has posted a loss of £7.6m (€8.7m/$9.5m) for 2018, despite also reporting a 23.9% year-on-year rise in revenue for the 12-month period.

Revenue for the year ended December 31, 2018, amounted to £65.8m, up from £53.1m in the previous year.

Genius experienced significant growth in its rest of world business, with revenue up from £20m to £31.3m. UK revenue also climbed from £6.1m to £7.3m, while rest of Europe revenue increased slightly from £26.9m to £27.2m.

However, Genius also noted an increase in expenses for the year, with the cost of sales rising 52.4% from £18.4m to £28.0m and administrative expenses up from £23.3m to £29.5m.

Higher staffing costs particularly hit Genius, with this jumping from £22.3m to £29.7m as the business increased its employee headcount from 669 to 901 in the year.

These increased costs pushed Genius from an operating profit of £5.9m in 2017 to an operating loss of £4.2m for the full year, while loss before tax amounted to £5.8m, compared to a profit of £4.2m. Loss for the full year stood at £7.6m, down from a profit of £4.8m in 2017

Reported earnings before interest, tax, depreciation and amortisation slipped from £11.3m to £8.4m, with total comprehensive income for year coming in at negative £7.6m, compared to a positive figure of £5.3m last year.

Analysing the results, Regulus Partners said that Genius’s historical pattern of growing revenue at the expense of profitability also need to be transformed in order to deliver sustainable potential.

Regulus noted two significant events for Genius in the past year, including the acquisition of a controlling stake by Apax in the third quarter, which Regulus said will improve firepower and discipline.

Analysts at Regulus also highlighted Genius’s acquisition of English and Scottish football official betting data from what is now Stats Perform, saying that this is “transformational to Genius and potentially transformational to the betting as well as sports rights sectors”.