Genius Brands sees Marvel transaction at 'transformational' 09:23 GNUS Genius Brands… Genius Brands International, Inc. (GNUS) @75 cents...... 0.7751+0.0882(+12.84%)<------------ At close: May 18 04:00PM EDT 0.7530-0.02(-2.85%)<----------------------- Pre-Market:09:25AM EDT Vol yest- 82 million! Volume 82,085,254 <------- Avg. Volume 4,440,708
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THE BEST RECESSION PROOF STOCK? The game data provider Sportradar SRAD–0.10% Group continues to break away from the pack of the sports betting industry– and the fast-growing tech companies of the recent bull market. Revenue rose 31% in the Swiss company’s March quarter, despite an impact from Russia’s war on Ukraine. And unlike other former favorites of the bull market, Sportradar is generating free cash flow. Revenue grew 124% in the U.S., a new market where Sportradarsupplies bookmakers with game statisticsfor professional baseball, basketball and hockey. Chief executive Carsten Koerl told earnings call listeners Wednesday morning that Sportradar is negotiating with college sports conferences about data deals, with the blessing of the National Collegiate Athletic Association. Sportradar shares (ticker: SRAD) were down a hair in Wednesday morning trading, to $10.20, in a market where the Nasdaq Composite Index was dropping 2%. The stock has fallen far sinceits September 2021 debutat $27. Yet Sportradar’s business is thriving. March quarter revenue was $186 million, compared with $152 million in March 2021 (when the company’s reporting currency of the euro was worth more). Revenue in the U.S. grew 124%, to $29 million. Even a recession won’t be bad for betting businesses, said Koerl. “Our business in the U.S. is growing like a rocket,” financial chief Alex Gersh toldBarron’safter the earnings call. U.S. bookmakers are spending more to acquire customers – throughcommercials and billboards– than bookmakers in the rest of the world. That unsustainable spending creates an opportunity for Sportradar, which offers online ads that are targeted to individual betters. Revenues in Sportradar’s ad business grew 71% in the March quarter. Other opportunities in the U.S. will come from a shift from pregame bets to live betting during a game. Most U.S. betters today place pregame bets, said Gersh. In the rest of the world, live betting predominates, and the betting is bigger. Another growth area for the company is getting bookmakers to outsource their bet handling. Sportradar offers computerized services to set odds and take bets, leaving the bookmaker to focus on marketing. In the March quarter, Sportradar’s managed bookmaking services grew 51%, worldwide. CEO Koerl said the amount of bets handled by his company put it in the world’s top five bookmakers. One of Sportradar’s rivals, Genius Sports(GENI) has the exclusive data rights to games of the National Football League.Geniusrevenue rose 60% in the March quarter, to $86 million, with a $3 million loss before interest, taxes, depreciation and amortization. Its shares have fallen from $25 to $3.17 in the past year. Investors have lost patience with unprofitable growth stocks like the bookmaker DraftKings(DKNG),which lost $468 millionon $417 million in March quarter revenue. The vortex of falling growth stock spulled down Sportradar, even though the data vendor is generating cash. In the March quarter, Sportradar had $30 million in Ebitda (adjusted for noncash charges like stock compensation and foreign exchange). After capital spending, half of that cash flow was free cash flow. Chief executive Koerl told conference call listeners that the war in Ukraine was hurting June quarter revenue growth. But the company thinks it can make up the revenue losses by year end, and maintained guidance for 2022 revenue growth of 18% to 25%, and growth in adjusted-Ebitda of 21% to 30%. In addition to the cash it is generating, Sportradar has about $870 million in available funds to grow its business, says CEO Gersh. “People put us in the same category as the highfliers who have revenue growth, but no profitability and no cash generation,” said Gersh. “We have a tremendous war chest.” LADIES AND GENTLEMAN BUY SRAD AND PUT IT AWAY! WE ARE NUMBER 1 THREAD AND I WANT YOU TO HAVE A # 1 IDEA.