News Classic

CHICAGO, Nov. 07, 2024 (GLOBE NEWSWIRE) — GoHealth, Inc. GOCO (“GoHealth” or the “Company”), a leading health insurance marketplace and Medicare-focused digital health company, today announced financial results for the three and nine months ended September 30, 2024.

Third Quarter Highlights

• Third quarter 2024 net revenues of $118.3 million, a $13.7 million decrease compared to $132.0 million in the prior year period.
• Third quarter 2024 Submissions were 166,195, a 2.9% increase compared to 161,550 Submissions in the prior year period, with strong contributions from GoHealth’s internal captive agents, partially offset by a decline in Submissions from the external GoPartner Solutions (“GPS”) agents.
• Third quarter 2024 net income of $15.4 million, an improvement of $71.6 million compared to a net loss of $56.2 million in the prior year period.
• Third quarter 2024 Adjusted EBITDA⁽¹⁾ of negative $12.1 million, a decrease of $0.6 million compared to negative $11.5 million in the prior year period.
• Third quarter 2024 trailing twelve months (“TTM”) positive cash flow from operations of $35.1 million, an increase of $38.3 million compared to TTM negative cash flow from operations of $3.2 million in the prior year period.
• Refinanced Credit Facility, establishing new five-year term with new lender group.
• Completed the strategic acquisition of e-TeleQuote Insurance, Inc. (“e-TeleQuote”), adding approximately $90.5 million in contract assets and $22.5 million in cash (inclusive of the Company’s initial $5.0 million investment), and recording a $77.4 million gain on bargain purchase, reinforcing GoHealth’s aspirations to expand its market leadership and operational capacity.
• Achieved an 11.0% improvement in Direct Operating Cost per Submission⁽²⁾ in the third quarter of 2024 compared to the prior year period, through advancements in artificial intelligence (“AI”), automation, and marketing efficiencies, along with targeted operational improvements.
• Appointed Brendan Shanahan as Chief Financial Officer, who brings over 30 years of healthcare and financial strategy expertise to GoHealth.

“Our third-quarter results underscore the strength of our ongoing transformation into a Medicare engagement company. We’ve helped over 650,000 consumers navigate Medicare options through tools like PlanFit CheckUp, and with the addition of e-TeleQuote’s 400 agents, we’re prepared to efficiently serve the demand surge we are seeing in this year’s Medicare Annual Enrollment Period (“AEP”). We believe these developments reinforce GoHealth’s leadership in the eBroker space, positioning us for sustained growth and profitability,” said Vijay Kotte, CEO of GoHealth.

“The acquisition of e-TeleQuote not only added $90.5 million in contract assets and $22.5 million in cash (inclusive of our initial $5.0 million investment), but also provided a substantial gain on bargain purchase of $77.4 million, boosting our financial position,” Kotte continued. “This strategic move expanded our agent capacity ahead of a pivotal AEP, which we believe will enable us to capitalize on market demand. As the competitive landscape shifts, GoHealth aims to stand out, ready to support the millions of consumers facing benefit reductions or coverage losses.”

“GoHealth’s third-quarter results reflect disciplined cost management, as we reduced our Direct Operating Cost per Submission⁽²⁾ by 11.0%, despite broader market challenges. These efficiency gains and a focus on high-quality lead generation underscore our commitment to driving profitable growth, especially as we progress through AEP,” said Brendan Shanahan, CFO of GoHealth. “With over $77 million gained through the e-TeleQuote acquisition, we believe we’re positioned with the liquidity and flexibility needed to drive long-term value, even as we expand our agent base during this critical AEP.”

“This AEP, we’re seeing unprecedented disruption, with over two million consumers losing coverage and more than six million experiencing reduced benefits. We believe GoHealth’s investments in AI-driven technology, an expanded agent network, and our focus on consumer engagement uniquely position us to lead through these market changes, delivering both growth and improved customer experience,” said Kotte.

Conference Call Details

The Company will host a conference call today, Thursday, November 7, 2024 at 8:00 a.m. (ET) to discuss its financial results. A live audio webcast of the conference call will be available via GoHealth’s Investor Relations website, https://investors.gohealth.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call.

About GoHealth, Inc.

GoHealth is a leading health insurance marketplace and Medicare-focused digital health company whose purpose is to compassionately ensure consumers’ peace of mind when making healthcare decisions so they can focus on living life. For many of these consumers, enrolling in a health insurance plan is confusing and difficult, and seemingly small differences between health plans may lead to significant out-of-pocket costs or lack of access to critical providers and medicines. GoHealth’s proprietary technology platform leverages modern machine-learning algorithms, powered by over two decades of insurance purchasing behavior, to reimagine the process of matching a health plan to a consumer’s specific needs. Its unbiased, technology-driven marketplace coupled with highly skilled licensed agents has facilitated the enrollment of millions of consumers in Medicare plans since GoHealth’s inception. For more information, visit https://www.gohealth.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are made in reliance upon the safe harbor provision of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release may be forward-looking statements. Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding our expected growth, future capital expenditures, debt service obligations, adoption and use of artificial intelligence technologies, the impact on our business from the acquisition of e-TeleQuote Insurance, Inc. (“e-TeleQuote”) and our ability to successfully integrate e-TeleQuote’s operations, technologies and employees into our business, are forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “aims,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “likely,” “future” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this press release are only predictions, projections and other statements about future events that are based on current expectations and assumptions. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

These forward-looking statements speak only as of the date of this press release and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described in the sections titled “Summary Risk Factors,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report on Form 10-K”) and in our other filings with the Securities and Exchange Commission. The factors described in our 2023 Annual Report on Form 10-K should not be construed as exhaustive and should be read together with the other cautionary statements included in this press release, as well as the cautionary statements and other risk factors set forth in the Quarterly Report on Form 10-Q for the first fiscal quarter ended March 31, 2024, the Quarterly Report on Form 10-Q for the second fiscal quarter ended June 30, 2024, the forthcoming Quarterly Report on Form 10-Q for the third quarter ended September 30, 2024 and in our other filings with the Securities and Exchange Commission.

You should read this press release and the documents that we reference in this press release completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

Non-GAAP Financial Measures

Throughout this press release, we use a number of non-GAAP financial measures. Non-GAAP financial measures are supplemental measures of our performance that are derived from our consolidated financial information, but which are not presented in our Condensed Consolidated Financial Statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). We define these non-GAAP financial measures as follows:

• “Adjusted EBITDA” represents, as applicable for the period, EBITDA as further adjusted for certain items summarized in the table furnished below in this press release.
   
• “Adjusted EBITDA Margin” refers to Adjusted EBITDA divided by net revenues.
   
• “EBITDA” represents net income (loss) before interest expense, income tax expense (benefit) and depreciation and amortization expense.

We believe that excluding certain items from our GAAP results allows management to better understand our consolidated financial performance from period to period and better project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period to period comparisons. Adjusted EBITDA is the primary financial performance measure used by management to evaluate the business and monitor the results of operations, as well as a basis for certain compensation programs sponsored by the Company. There are limitations to the use of the non-GAAP financial measures presented in this press release. For example, our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for the most directly comparable financial measures prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of each of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to its most directly comparable GAAP financial measure are presented in the tables furnished below in this press release. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items and may include other expenses, costs and non-routine items.

Key Performance Indicators

In addition to traditional financial metrics, we rely upon certain business and operating metrics to evaluate our business performance and facilitate our operations. The most relevant business and operating metrics are as follows:

• “Direct Operating Cost of Submission” is an operating metric that represents costs directly attributable to Submissions generated during a particular period and excludes costs that are indirect or fixed. Direct Operating Cost of Submission is comprised of the portion of the respective operating expenses for revenue share, marketing and advertising and consumer care and enrollment that are directly related to the Submissions generated in the particular period. Direct Operating Cost of Submission, most recently referred to as “Direct Cost of Submission,” reflects a name change only.
   
• “Direct Operating Cost per Submission” is an operating metric that represents the average performance of Submissions generated during a particular period. Direct Operating Cost per Submission refers to (x) Direct Operating Cost of Submission for a particular period divided by (y) the number of Submissions generated for such period. Direct Operating Cost per Submission, most recently referred to as “Direct Cost per Submission” reflects a name change only.
   
• “Sales/Direct Operating Cost of Submission” represents (x) the numerator of Sales per Submission, as defined below, divided by (y) Direct Operating Cost of Submission. Sales/Direct Operating Cost of Submission, most recently referred to as “Sales/Direct Cost of Submission” reflects a name change only.
   
• “Sales per Submission” is an operating metric that represents the average performance of Submissions generated during a particular period. Sales per Submission measures revenues only from the Submissions generated in the period and excludes items that are unrelated to such Submissions, including any impact of revenue adjustments recorded in the period, but relating to performance obligations satisfied in prior periods. Sales per Submission equals (x) the sum of (i) agency revenues, comprised of the expected amount of initial commission revenue and any renewal commissions to be paid from the health plan partners on such placement as long as the policyholder remains with the same insurance product, as well as partner marketing and other revenue and (ii) non-agency revenues, comprised of the enrollment and engagement services for which cash is collected in advance or in close proximity to the point in time revenue is recognized, divided by (y) the number of Submissions generated for such period.
   
• “Submission” refers to either (i) a completed application with our licensed agent that is submitted to the health plan partner and subsequently approved by the health plan partner during the indicated period, excluding applications through our Non-Encompass BPO Services or (ii) a transfer by our agent to the health plan partner through the Encompass operating model during the indicated period.

Direct Operating Cost of Submission, Direct Operating Cost per Submission, Sales/Direct Operating Cost of Submission, Sales per Submission and Submissions are key operating metrics we use to understand our underlying financial performance and trends.

Certain Definitions and Key Terms

As used in this press release, unless the context otherwise requires:

• “LTV” refers to the Lifetime Value of Commissions, which we define as aggregate commissions estimated to be collected over the estimated life of all commissionable Submissions for the relevant period based on multiple factors, including but not limited to, contracted commission rates, health plan partner mix and expected policy persistency with applied constraints.
   
• “Non-Encompass BPO Services” refer to programs in which GoHealth-employed agents are dedicated to certain health plans and agencies we partner with outside of the Encompass operating model.

The following tables set forth the components of our results of operations for the periods indicated (unaudited):

NM = Not meaningful

NM = Not meaningful

The following tables set forth the reconciliations of GAAP net income (loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for the periods indicated (unaudited):

The table below depicts the disaggregation of revenue and is consistent with how the Company evaluates its financial performance (unaudited):

The following table summarizes share-based compensation expense (benefit) by operating function for the periods indicated (unaudited):

The following table sets forth our balance sheets for the periods indicated (unaudited):

The following table sets forth the net cash provided by (used in) operating activities for the periods presented (unaudited):

In addition to traditional financial metrics, we rely upon certain business and operating metrics to evaluate our business performance and facilitate our operations. Below are the most relevant business and operating metrics for our single operating and reportable segment.

The following table presents the number of Submissions for the periods presented:

The following table presents the Sales per Submission for the periods presented:

The following table presents the Direct Operating Cost per Submission for the periods presented:

The following are our Direct Operating Cost of Submission (in thousands) and Sales/Direct Operating Cost of Submission for the periods presented:

Third Quarter 2024 Highlights

• Revenue increased 27% to €255 million
• Profit for the period increased €33 million to €37 million and expanded to 14.5% as a percentage of revenue
• Adjusted EBITDA¹ increased 30% to €66 million and Adjusted EBITDA margin¹ expanded to 25.8%
• Net cash generated from operating activities increased 55% to €118 million and Free cash flow¹ increased 192% to €62 million
• Customer Net Retention Rate¹ increased to 126%
• Repurchased $8.3 million of shares
• Further raised full year guidance to revenue growth of at least 24% to €1,090 million and Adjusted EBITDA growth of at least 29% to €216 million

ST. GALLEN, Switzerland, Nov. 07, 2024 (GLOBE NEWSWIRE) — Sportradar Group AG SRAD (“Sportradar” or the “Company”), a leading global sports technology company focused on creating immersive experiences for sports fans and bettors, today announced financial results for its third quarter ended September 30, 2024.

Carsten Koerl, Chief Executive Officer of Sportradar, said: “Our competitive advantages within the sports ecosystem, coupled with our growth-oriented strategy, is driving broad-based outperformance. We continue to deliver more value to our clients and partners, building shareholder value. We are at an important inflection point to drive operational leverage and cash generation, demonstrated by our expanding EBITDA margin and strong cash flow this past quarter. The significant cash flow has further strengthened our balance sheet and we are deploying our capital to execute on our growth strategy while returning capital to shareholders. Additionally, we continue to show strong momentum in the US, which we expect to be further bolstered by the growth of in-game betting and with the start of the NBA and NHL seasons.”

THIRD QUARTER AND YEAR TO DATE FINANCIAL RESULTS

Revenue

Total revenue for the third quarter was €255 million, up €54 million, or 27% year-over-year driven by 32% growth in Betting Technology & Solutions and 8% growth in Sports Content, Technology & Services.

Betting Technology & Solutions revenues of €210 million were up 32% year-over-year primarily driven by a 37% increase in Betting & Gaming Content benefiting from existing and new customer uptake of our products and premium pricing, as well as from the strong U.S. market growth. Additionally, Managed Betting Services grew 18% year-over-year, primarily driven by strong growth in Managed Trading Services from higher trading margins and increased betting activity from existing and new customers.

Sports Content, Technology & Services revenues of €45 million, increased 8% year-over-year primarily driven by 10% growth in Marketing & Media Services with strong growth in both European and North America ad:s revenue as several sportsbooks launched marketing campaigns.

The Company generated strong revenue growth globally with Rest of World up 23% and the United States up 46%. As a percentage of total Company revenues, United States revenue represented 20% of total Company revenue in the third quarter as compared to 17% in the prior year quarter due to market growth, additional customer uptake of our products and premium pricing.

Customer Net Retention Rate of 126% increased sequentially and from the prior year quarter demonstrating the strength in cross selling and upselling to clients most notably due to the new ATP rights deal and market growth in the United States.

Profit for the period from continuing operations

Profit for the period from continuing operations in the third quarter was €37 million, up €32 million, compared to €5 million in the same quarter a year ago. The increase was primarily driven by the strong operating results as well as €21 million in net foreign currency gains due to strengthening of the Euro against the U.S. dollar and €15 million of prior year one-time losses related to impairment on goodwill and intangible assets related to the impact of changes related to our business strategy and disposal of an equity-accounted investee. These increases were partially offset by higher financing costs of €14 million driven by the new ATP, NBA, and Bundesliga partnership deals.

Adjusted EBITDA

Third quarter Adjusted EBITDA was €66 million, up €15 million, compared to €50 million in the same quarter a year ago. The increase was primarily driven by the 27% revenue growth, partially offset by increased sport rights costs primarily related to the ATP partnership deal, higher purchased services driven by investments in developing our product portfolio, increased personnel expenses due to headcount growth and a higher bonus accrual in the current year.

Additional Business Highlights

• In conjunction with our partnership with the NBA, Sportradar has launched a suite of next generation products and solutions for the 2024 – 2025 season. Leveraging products such as 4Sight Streaming, emBET, Live Match Tracker and advanced visualizations, Sportradar can harness hundreds of thousands of data points per game to redefine the standards of fan engagement.
• Sportradar introduced micro markets for ATP tennis matches in collaboration with Tennis Data Innovations, expanding this cutting-edge product to tennis from other popular sports such as soccer and table tennis. The eight distinct micro markets are expected to generate approximately 1,500 new betting opportunities per match, opening fresh revenue streams for operators.
• Sportradar added paid search to its ad:s marketing service, allowing operators to more effectively reach and acquire customers searching betting and gaming-related topics online.
• Sportradar received several industry awards, including the Best Live Betting Product at SBC Summit 2024. In addition, Sportradar was recognized in two prestigious categories at the 2024 American Gambling Awards, winning Betting Product of the Year for its 4Sight technology and the Data Service Provider of the Year.

Balance Sheet and Liquidity

The Company’s cash and cash equivalents were €368 million as of September 30, 2024 as compared with €277 million as of December 31, 2023. The increase was primarily driven by net cash generated from operating activities of €271 million due to the strong operating performance, partially offset by net cash used in investing activities of €152 million, primarily from the acquisition of additional sports rights, most notably our new NBA and ATP deals, and from net cash used in financing activities of €26 million, due primarily to share repurchases. Free cash flow for the nine-months ended September 30, 2024 was €122 million, an increase of €71 million from the €51 million in the same period a year ago.

Including the undrawn credit facility, the Company had total liquidity of €588 million at September 30, 2024 as compared to €510 million as of September 30, 2023, and no debt outstanding.

2024 Annual Financial Outlook

Sportradar is further raising its fiscal 2024 outlook for revenue and Adjusted EBITDA as follows:

• Revenue of at least €1,090 million, up 24% year-over-year, compared with prior outlook of €1,070 million.
• Adjusted EBITDA of at least €216 million, up 29% year-over-year, compared with prior outlook of €204 million.
• Adjusted EBITDA margin of approximately 20%.

Share Repurchase Program

In March of this year the Board of Directors approved a $200 million share repurchase program and commenced purchases during the second quarter. During the current quarter, the Company repurchased approximately 721,000 shares for a total of $8.3 million. Year to date through November 1, 2024, the Company has repurchased 1.7 million shares under the plan for a total of approximately $20 million.

Conference Call and Webcast Information

Sportradar will host a conference call to discuss the third quarter 2024 results today, November 7, 2024, at 8:00 a.m. Eastern Time. Those wishing to participate via webcast should access the earnings call through Sportradar’s Investor Relations website. An archived webcast with the accompanying slides will be available at the Company’s Investor Relations website for one year after the conclusion of the live event.

About Sportradar

Sportradar Group AG SRAD, founded in 2001, is a leading global sports technology company creating immersive experiences for sports fans and bettors. Positioned at the intersection of the sports, media and betting industries, the Company provides sports federations, news media, consumer platforms and sports betting operators with a best-in-class range of solutions to help grow their business. As the trusted partner of organizations like the ATP, NBA, NHL, MLB, NASCAR, UEFA, FIFA, and Bundesliga, Sportradar covers close to a million events annually across all major sports. With deep industry relationships and expertise, Sportradar is not just redefining the sports fan experience, it also safeguards sports through its Integrity Services division and advocacy for an integrity-driven environment for all involved.

For more information about Sportradar, please visit www.sportradar.com

_______________________________________________________________________

¹ Non-IFRS measure. See the sections captioned “Non-IFRS Financial Measures and Operating Metric” and “IFRS to Non-IFRS reconciliations” for more details.

CONTACT:

Investor Relations:
Jim Bombassei
j.bombassei@sportradar.com

Media:
Sandra Lee
press@sportradar.com

Non-IFRS Financial Measures and Operating Metric

We have provided in this press release financial information that has not been prepared in accordance with IFRS, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted purchased services, Adjusted personnel expenses, Adjusted other operating expenses, and Free cash flow, as well as our operating metric, Customer Net Retention Rate. We use these non-IFRS financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to IFRS measures, in evaluating our ongoing operational performance. We believe that the use of these non-IFRS financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-IFRS financial measures to investors.

Non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. Investors are encouraged to review the reconciliation of these non-IFRS financial measures to their most directly comparable IFRS financial measures provided in the financial statement tables included below in this press release.

• “Adjusted EBITDA” represents earnings for the period from continuing operations adjusted for finance income and finance costs, income tax expense or benefit, depreciation and amortization (excluding amortization of capitalized sport rights licenses), foreign currency gains or losses, and other items that are non-recurring or not related to the Company’s revenue-generating operations, including share-based compensation, impairment charges or income, management restructuring costs, non-routine litigation costs, losses related to equity-accounted investee (SportTech AG), and professional fees for the Sarbanes-Oxley Act of 2002 and enterprise resource planning implementations.
  License fees relating to sport rights are a key component of how we generate revenue and one of our main operating expenses. Only licenses that meet the recognition criteria of IAS 38 are capitalized. The primary distinction for whether a license is capitalized or not capitalized is the contracted length of the applicable license. Therefore, the type of license we enter into can have a significant impact on our results of operations depending on whether we are able to capitalize the relevant license. As such, our presentation of Adjusted EBITDA reflects the full costs of our sport right’s licenses. Management believes that, by including amortization of sport rights in its calculation of Adjusted EBITDA, the result is a financial metric that is both more meaningful and comparable for management and our investors while also being more indicative of our ongoing operating performance.
  We present Adjusted EBITDA because management believes that some items excluded are non-recurring in nature and this information is relevant in evaluating the results relative to other entities that operate in the same industry. Management believes Adjusted EBITDA is useful to investors for evaluating Sportradar’s operating performance against competitors, which commonly disclose similar performance measures. However, Sportradar’s calculation of Adjusted EBITDA may not be comparable to other similarly titled performance measures of other companies. Adjusted EBITDA is not intended to be a substitute for any IFRS financial measure.
  Items excluded from Adjusted EBITDA include significant components in understanding and assessing financial performance. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation, or as an alternative to, or a substitute for, profit for the period, revenue or other financial statement data presented in our consolidated financial statements as indicators of financial performance. We compensate for these limitations by relying primarily on our IFRS results and using Adjusted EBITDA only as a supplemental measure.

• “Adjusted EBITDA margin” is the ratio of Adjusted EBITDA to revenue.
  The Company is unable to provide a reconciliation of Adjusted EBITDA guidance to profit (loss) for the period, its most directly comparable IFRS financial measure, on a forward-looking basis without unreasonable effort because items that impact this IFRS financial measure are not within the Company’s control and/or cannot be reasonably predicted. These items may include but are not limited to foreign exchange gains and losses. Such information may have a significant, and potentially unpredictable, impact on the Company’s future financial results.

We present Adjusted purchased services, Adjusted personnel expenses, and Adjusted other operating expenses (“Non-IFRS expenses”) because management utilizes these financial measures to manage its business on a day-to-day basis and believes that they are the most relevant measures of expenses. Management believes these adjusted expense measures provide expanded insight to assess revenue and cost performance, in addition to the standard IFRS-based financial measures. Management believes these adjusted expense measures are useful to investors for evaluating Sportradar’s operating performance against competitors. However, Sportradar’s calculation of adjusted expense measures may not be comparable to other similarly titled performance measures of other companies. These adjusted expense measures are not intended to be a substitute for any IFRS financial measure.

• “Adjusted purchased services” represents purchased services less capitalized external development costs.
• “Adjusted personnel expenses” represents personnel expenses less share-based compensation awarded to employees, management restructuring costs, and capitalized personnel compensation.
• “Adjusted other operating expenses” represents other operating expenses plus impairment loss on trade receivables, less non-routine litigation, share-based compensation awarded to third parties, and certain professional fees.

We consider Free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchase of property and equipment, the purchase of intangible assets and payment of lease liabilities, which can then be used, among other things, to invest in our business and make strategic acquisitions. A limitation of the utility of Free cash flow as a measure of liquidity is that it does not represent the total increase or decrease in our cash balance for the year.

• “Free cash flow” represents net cash from operating activities adjusted for payments for lease liabilities, acquisition of property and equipment, and acquisition of intangible assets.

In addition, we define the following operating metric as follows:

• “Customer Net Retention Rate” is calculated for a given period by starting with the reported Trailing Twelve Month revenue from our top 200 customers as of twelve months prior to such period end, or prior period revenue. We then calculate the reported trailing twelve-month revenue from the same customer cohort as of the current period end, or current period revenue. Current period revenue includes any upsells and is net of contraction and attrition over the trailing twelve months but excludes revenue from new customers in the current period. We then divide the total current period revenue by the total prior period revenue to arrive at our Net Retention Rate.

Safe Harbor for Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking” statements and information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events, including, without limitation, statements regarding future financial or operating performance, planned activities and objectives, anticipated growth resulting therefrom, market opportunities, strategies and other expectations, and our guidance and outlook, including expected performance for the full year 2024. In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “projects”, “continue,” “contemplate,” “confident,” “possible” or similar words. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the following: economy downturns and political and market conditions beyond our control, including the impact of the Russia/Ukraine and other military conflicts and foreign exchange rate fluctuations; pandemics, such as the global COVID-19 pandemic, could have an adverse effect on our business; dependence on our strategic relationships with our sports league partners; effect of social responsibility concerns and public opinion on responsible gaming requirements on our reputation; potential adverse changes in public and consumer tastes and preferences and industry trends; potential changes in competitive landscape, including new market entrants or disintermediation; potential inability to anticipate and adopt new technology; potential errors, failures or bugs in our products; inability to protect our systems and data from continually evolving cybersecurity risks, security breaches or other technological risks; potential interruptions and failures in our systems or infrastructure; our ability to comply with governmental laws, rules, regulations, and other legal obligations, related to data privacy, protection and security; ability to comply with the variety of unsettled and developing U.S. and foreign laws on sports betting; dependence on jurisdictions with uncertain regulatory frameworks for our revenue; changes in the legal and regulatory status of real money gambling and betting legislation on us and our customers; our inability to maintain or obtain regulatory compliance in the jurisdictions in which we conduct our business; our ability to obtain, maintain, protect, enforce and defend our intellectual property rights; our ability to obtain and maintain sufficient data rights from major sports leagues, including exclusive rights; any material weaknesses identified in our internal control over financial reporting; inability to secure additional financing in a timely manner, or at all, to meet our long-term future capital needs; risks related to future acquisitions; and other risk factors set forth in the section titled “Risk Factors” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, and other documents filed with or furnished to the SEC, accessible on the SEC’s website at www.sec.gov and on our website at https://investors.sportradar.com. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this press release. One should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

SPORTRADAR GROUP AG
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
(Unaudited)

SPORTRADAR GROUP AG
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)

SPORTRADAR GROUP AG
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Change in presentation related to sport rights expenses

During the third quarter, the Company has changed the presentation of expenses related to sport rights in its Statement of profit or loss and other comprehensive income. Previously, these expenses were split between ‘Purchased services and licenses (excluding depreciation and amortization)’, representing the portion of related sport rights expenses which were not eligible for capitalization and ‘Depreciation and amortization’, representing the portion of related sport rights expenses which were capitalized. However, starting this quarter, the expenses are combined and presented under a new line item titled ‘Sport rights expenses (including amortization of capitalized licenses)’.

The change in presentation intends to provide more relevant and reliable information to the users of our financial statements. This reclassification aligns the presentation of sport rights expenses with the nature of the costs and the way they are managed internally.

There is no change to the Company’s disclosures, measurement or recognition of non-capitalized costs and capitalized sport rights licenses in accordance with IAS 38 Intangible Assets reported in its Annual Report on Form 20-F for the year ended December 31, 2023.

The following table shows the reclassification of sport rights expenses (unaudited):

¹ Approximately €1.2 million and €7.2 million of sport rights expenses has been reclassified from amortization to purchased services and licenses for the three-month and nine-month periods ended September 30, 2023 as previously reported in the Company’s Form 6-K dated November 1, 2023.

Additional disclosures related to sport rights expenses

The following table shows the composition of sport rights expenses (unaudited):

IFRS to Non-IFRS Reconciliations

The following table reconciles Adjusted EBITDA to the most directly comparable IFRS financial performance measure, which is Profit for the period from continuing operations (unaudited):

The most directly comparable IFRS measure of Adjusted EBITDA margin is Profit for the period from continuing operations as a percentage of revenue as disclosed below (unaudited):

The most directly comparable IFRS measure of Free cash flow is Net cash from operating activities as disclosed below (unaudited):

The following tables show reconciliations of IFRS expenses included in profit for the period from continuing operations to expenses included in Adjusted EBITDA (unaudited):