Sportradar’s Post

Transcript

OK, we're proud to be got this one. Regular viewers know that I'm a big believer in the online sports betting place. Things like DraftKings. Remember, we have flood recently. They've been hammered lately. But don't worry about it. I think there's a lot of money to be made in this business. So when someone called in to ask me about Sport Radar, a company that supplies sports book operators with the data they need to make the odds, well, I got right back to them. Gave the stock my blessing. Now you know, that was the end of October and since then I said this is an amazing sport. Radar rallied from $12.00 to just shy of 22. Large today now earlier today these guys hosted an investor day where they rolled out some encouraging long term really good financial growth targets. So let's take a closer look with costs and Carl Carson is the founder and CEO of sport radar Mr. Carl, welcome to mad money thanks for having me Well, this is very exciting because we when I got the call what we did at Ben Stone ice research tracker, we said Oh my God, how did we not know this company? This is the company behind so many of the companies that we do know you really. Are the engine of sports betting we are we are looking at what we collected now over the last 20 years is a breadth and depth of data which nobody can match we have more than one million matches every year life we cover this we have all the historical database and we are working with the three big leagues only the NFL is missing right that's true who knows what will happen there but I thought one of the most interesting thing is you are you cover the three most wagered sports and I asked. Everybody which one and people didn't know it, but it's well, I'll let you tell people because it's really exciting. Look, it's tennis. Tennis is something which is very fast moving. So from a betting perspective, tennis is the best sport. Soccer worldwide is the biggest sport. So of course we have that and basketball. So these are our three key sports. Baseball is very, very good. Hockey is very, very good from a US perspective. But those three sports collective because we were thinking, it seems like when we started thinking about tennis, you had something every week. Right. There's a big tennis match every week around the world. There is not only every every week, it's every day around the globe. Oh my God. Well, that is so exciting. Now tell me about the expanded baseball partnership. Well, we are. We are really, we worked hard on that partnership. It took us a time, but finally we are super happy that we could extend it. Now we have baseball as the last one in our portfolio and all the rights which we have are more than six years with the major leagues and baseball. He is now this extension and baseball is global and right. The interesting one in baseball is Taiwan is a big market for us. Korea is a big market for us. Japan is a market where we believe there are nice chances and they are mad about baseball. Mexico is mad about baseball and here too. Yes, it fits perfectly to the portfolio. Well, speaking about international, I saw you seated next to one of my idols, one of the most brilliant people in in sports business, Adam Silver and he. He gets a kick out of you guys, doesn't he? Today I had two commissioners on stage for the investor. Yeah, I was a little bit nervous, but they're doing so. It was getting Gary Batman and Adam Silver balls together and and they are great partners. And what we told today to the market is what we really live. We live a partnership. We try to understand sport, try to understand how can we help. It's not only sports betting monetization. Those boys want to go to the digital sport fan. They want to create value there and footprint now. I was confused initially, and then I started reading into it. This IMG Arena deal is a tremendous deal for you. Isn't that interesting? Yeah, so. Itself, we get money paid and it's something where the structure of the deal is, it's fitting perfectly from a portfolio for us and we had to repair a couple of deals which they did, which commercially are not that favorable. So we could manage this together. And now the deal is subject to antitrust. But in six months we believe we can close it. They pay us 225 million and the deal is margin accretive from the first moment onwards, we are very excited. Perfect now one of the things that you guys did that is a great service is you you detect suspicious matches and special and suspicious gambling. You're in some ways the SEC for for for gambling. Well DSC or the FBI or the well we know what that but also you also sounds like you can can you lay off like. Let's say Jason was with Jason was really they kept the favorite kept winning yeah and he said he didn't wanna like because then maybe something could change but. If I wanted to lay off my odds, you could do it for me. Look, we are monitoring the movements of the arts and the movements of the arts. They are going with the liquidity in the background, right? So we are running our own model and we are monitoring the market. If we see there is an inconsistency, we have a good evidence for this, then we begin to dig into it. We are sitting on the deep data with sport for performance. We are matching the performance on the pitch to what we see in the market, right? And then we create evidence. What we did last year is we had been helpful. On 104 cases where which had been leading to prosecution in sport, it was all over the place. 104 matches for 1,000,000 is not much, but it's too much. And this is where we help support, yes, and we joked before about it, but it's about law enforcement agencies trying to help them, to educate them, trying to help support to make this happen. And you know what, no sports betting if the integrity of the game is is in in danger, so can't happen. So that is for us. Essentially well and I don't wanna bury the lead. I mean you've got EBITDA, the the composite a compound annual growth of 27%. I mean this you're a juggernaut. I I'd be spent a lot of time talking about the soft stuff out the numbers you're really pretty great. Well, we are happy. So the year which we closed is a 26% top line growth has 33% growth in the avatar. Now we gave the guidance of staying in the next three years, we've seen average minimum 15% growth over every year we see 700 basis point. In the next three years where we improve the margin and the margin is one thing and you know that the cash matters. So that's the same, So 700 basis point also from a cash conversion. So we're feeling pretty strong. We're sitting now on screen at 50 million cash in three years we are sitting on a billion and and that's a good starting point for the next expansion step. And you are the steadier of the ones. I mean I recommend all of them because I think they have great sites and I I like the parlays and stuff, but you're the consistent one. You're kind of you're the real house. Well, look, people are comparing it with the pigs and shuffle, so if that's a great way to view it, yeah, that's actually the great way to do it. And I've always favored those when it came to gold. Maybe I should favor those when it comes to gambling. That's Carsten Curl. He's the founder and CEO of a sport radar. And I want to thank our our viewer that came to us with this because because holy cow, this one's a gem. They have monies back from break. Coming up, Kramer takes your calls and the skies the limit.