Why Genius Sports Shares Are Falling Today

Genius Sports Ltd GENI shares are trading lower by around 8% after the company reported Q3 FY23 results.

Sales grew 29.3% Y/Y to $101.73 million, beating the consensus of $100.38 million.

Segment Revenue: Betting Technology, Content & Services increased by 34.1% Y/Y, Media Technology, Content & Services rose by 27.9% Y/Y, and Sports Technology & Services gained 11.3% Y/Y.

Loss from operations narrowed to $(8.9) million from $(33.4) million loss a year ago, driven by improved underlying performance. 

Group Adjusted (non-GAAP) EBITDA was $17.7 million in the quarter, up 131% Y/Y.

EPS loss of $(0.06) missed the street view of $(0.04).

As of quarter end, the company held $92.0 million in cash and cash equivalents.

"Our consistent outperformance reflects the execution of our core strategy as we continue to develop and distribute innovative technology across the sports ecosystem, enabling success for our partners, and further solidifying our long-term strategic position," said Mark Locke, Co-Founder and CEO.

"We have reached a critical turning point in our business as we have realized consistent margin expansion in each quarter this year and now have much higher visibility into our long-term model following the renewals and extensions of key rights partnerships," added Locke.

Outlook: Genius Sports raised its outlook for FY23 revenue to $412 million from $410 million (consensus $410.47 million) and adjusted EBITDA to $53 million from $52 million earlier.

GENI sees Q4 revenue of $126 million (consensus $126.48 million) and adjusted EBITDA of $11 million.

The company also reaffirmed its expectation to generate positive free cash flow in the second half of 2023.

Price Action: GENI shares are down 6% at $4.95 on the last check Monday.