Great. Good morning, everyone. My name is Bernie McTernan, internet and consumer tech analyst here at Needham & Company. Sorry for the delay here, some technical challenges on my end, but thrilled to introduce, to start the day in our third annual conference, Nick Taylor, CFO of Genius Sports. Nick, thank you so much for joining. Oh, it's a pleasure, Bernie, and thanks, thanks for everybody else. Nice to see you all. Great. Maybe just to start, you know, current environment, everyone, you know, interested to see how the NFL's going. So any kind of... I know you just had earnings recently, but any kind of update on the season or, or how it's going in general? I'm, look, I'm always loathe to give NFL advice to a room full of broadly American people with a British accent, Bernie, so I'll do my best. But, look, I think from a sportsbook perspective, I think it's been a good start to the NFL, I think, hasn't it? It's been as a, you know, as a healthy growth across all areas, as, as from what we can see from across parlays, across pre-match, in-play as well. You know, I think the margins have held up well. You know, and I think, Bernie, from a Genius perspective, I think we, you know, we're also continuing to deepen our relationships with the NFL and its stakeholders, as a lot of people will know, you know, through our sort of broadcast augmentation, through NFL+, BetVision, free-to-play games, and so on. So yeah, it's been a good start to the 2023, 2024 season. Great. And how about competitive dynamics? You know, obviously Fanatics starting the year as a new entrant into the foray, but with ESPN Bet launching, you know, this past week, any thoughts on the competitive dynamics and how that's impacting Genius? Yeah, I mean, and we've always said it's true that we're relatively agnostic, really, in how the market is divided. You know, our B2B play is such that we take a, as you know, a variable percentage of gaming revenue, that to some extent, you know, we're agnostic of who actually wins market share. Having said that, Bernie, new entrants, you know, some deep balance sheets, some big statements made from sportsbooks, you know, that can only be good news. You know, profitable, sustainable sportsbooks is good news for Genius and, you know, and that's on the betting side. And of course, as you know, we've got a fast-growing programmatic media business as well. Again, new entrants into that, you know, they're gonna be looking to acquire customers, the new entrants. You know, that's, you know, that's how we help and do it very efficiently. But also, those who have been playing in the market for, you know, for the last three or four years, they're not the guys who are gonna wanna lose market share to any new entrants. And therefore, again, we, that's also good news for Genius from a media perspective. Yeah. No, understood. And then maybe, you know, across the pond where you are. So EPL, like, generally, I think the favorites have been winning more, and like, I've actually heard people tell me that there's like they think it's like structural reasons why favorites are actually winning more, and, and I'm not gonna, I am gonna go into that detail. But does that impact you at all if that hold is lower for the sports books overseas? Yeah, look, I'm in, I'm on safer territory here now, Bernie, as a Newcastle United fan. A more exciting competition just naturally means more eyeballs on the tournament. That is good news for sports books and tends to be, you know, by extension, good news for Genius. You're absolutely right, though. Where sports books really, their operating margin really starts coming to play is where favorites lose. That's what you need to be happening. Now, from a Genius perspective, particularly in Europe, and you're right, a couple of the European sports books called it out in their Q3 earnings for September. It doesn't really impact us in Genius, 'cause if the way we go to market in Europe tends to be on what we call a fixed fee basis, which it's not fixed in the fact there are lots of levers and upside, but what it does mean is that we're not exposed to any particular fixture in terms of win operating, win margins. It tends to be more like a SaaS-style subscription kind of base. So certainly, when we get any favorites winning, you know, Manchester City or Arsenal the like in the UK soccer, that doesn't really impact our numbers. Okay, understood. And maybe... Well, if there's ever a question to filibuster on, that would've been it, but... maybe- I can come back to that for you, Bernie, later. Maybe just moving over to BetVision, what's the latest and greatest? Obviously, just signing up FanDuel the day after the earnings period was an exciting announcement, but I'm just— is that the NFL only right now, and the EPL's coming? Just a status in terms of, like, where that product is being rolled out and maybe how we should expect that to evolve in the future. Yeah, of course. I mean, it was quite odd announcing it sort of the day after our earnings, 'cause we spent the whole of the earnings call with people saying, "Hey, how, you know, when does FanDuel sign up?" And I'm like, literally my cell phone's beeping saying, "Yeah, we can announce it tomorrow morning." So it's quite a strange experience, Bernie. But yeah, yeah, it is. It's just the look, the NFL's our launch partner for this. And for those of you who are on the call who haven't seen it, it's really, you know, it's kind of the next generation of sportsbook product, and it's combining... You know, there's always been streaming for a long time, but this is NFL streaming, and it's now it, it's like almost zero latency, you know, one or two seconds, so considerably ahead of broadcast. And then what we're doing there is overlaying the graphics, overlaying the data that we get from our subsidiary Second Spectrum that, you know, people are already getting used to seeing it on places like Amazon Prime or CBS Prime Vision. And then it's just gonna be a series of product launches and enhancements as we go. You know, at the moment it's, you're right, but it's just the NFL. It's not a huge technology play to roll out similar products for other sports. You know, soccer, as we've already talked about, is a significant sport for us, so it would be a natural next step for us to roll it out. But as I say, this is not only replicating in other sports, but it's also about deepening the product as well. I mean, the way we're really looking at this is it's really a smart technology platform, I guess. Very nascent. Get that distribution out far and wide, get people using it. And then once we've got it out there, it's then introducing new functionality, which will help drive engagement, drive betting volumes, drive monetization for sports books. Understood. And then I know you won't want to get into the, too much of the nuances of the contract with FanDuel, but just was this part of a broader renewal with them, or was this just adding... 'Cause I remember that FanDuel wasn't one of the sports books that you announced, like, right before the NFL season last, a couple of years ago, and you said that you already had an agreement with them, and that's why we didn't see that announcement. So is this part of, like... So I think that renewal timeline might match up, but, so is this a renewal of the contract or just adding BetVision to the existing one? No, it's adding BetVision to the existing contract. Okay. It's a specific contract, which then goes to co-terminus with the overarching FanDuel contract. You know, which I believe is to be renewed at some point during 2024. Okay, got it. Okay. And then, when will the product be- was it up and running this weekend on FanDuel? It's actually been up and running, I think, for a couple of weekends, Bernie. Oh, okay. So it was up and running the weekend before announcement. I think everybody wanted to make sure that it landed well, a soft landing, without any sort of the big bells and whistles of any announcements, and it was. Yeah, it was running all the way through the weekend. And look, you know, it's probably a question for FanDuel rather than for us, but from what we can see, you know, very early stages, we're very encouraged by the launch. Got it. And then maybe another unfair question, but in your view, what got them over the edge to actually-'cause you rolled out with three partners originally, and then, so what like... You know, what, yeah, what got them over the edge to wanna, you know, have this product at this point in the season? Yeah, of course. Again, probably Bernie, probably want more from my friends at FanDuel to answer than from us. But look, they were always going to take the product. This isn't suddenly a new decision from FanDuel once it was launched. It was always like they're gonna take the product, you know, because for the reasons we believe it's a high quality value-add product that's going to change the way sports books, or at least enhance the way sports books look after, you know, interact with their customers. We launched with 3, but it was always all these negotiations, commercial decisions, either by us or sports books. So, you know, they all run at their own pace, and therefore, we were always very confident that FanDuel would sign. It would just take its natural time for FanDuel, you know, the legal and commercial processes to work through it. Okay. And then just lastly here, how should investors think about how you guys monetize BetVision? If it's, is it, you know, fixed fee? Is it, you know, does it add to the take rate? Like, and I know that, you know, as betting inherently moves more in play because of BetVision, that benefits you as well, too. Yeah. I'm sure there's some sort of, like, discrete payment on top of that. Yeah. I guess I'd call it the compound effect really, Bernie. So the actual how we get paid directly for it is there's a license fee, is there's a technology service partner. And to be clear, we pay, and we won the RFP rights from the NFL earlier this calendar year, and we pay a separate fee for that. And then we are charging a license fee to now to the four sportsbooks that have it. And it's absolutely our intention is to sign up more sportsbooks for BetVision. I said earlier, this is about getting this getting, distributing the product far and wide. But you're absolutely right to call out. Actually, the really exciting bit for us isn't the license fee, although you know, I'm a CFO, so it all helps, Bernie. But the really interesting thing for us is actually what the product does for the sports books. And that, you know, and then that, you know, we believe is going to drive higher handle, greater volumes, and you've hit the nail on the head in terms of in-play sports betting as well. But turn the dial for that, and we've always said in-play sports betting in the U.S. is gonna be a product-led evolution, and this is just an example of one of the products that we think this will help drive it. And you're right to call out from a Genius perspective, because the way our commercial model works in the U.S is we're on a variable take rate, and our take rate is broadly 3x times on an in-play bet as on a pre-play bet. So you put $10, Bernie, on the Giants. Apologies, I don't know who your team is, but you put $10- It's the opposite, but ...... Let's not go there. You put $10 on them to win before the game, and we'll take a set percentage, and we're out in the market, you know, saying that's broadly about 1.5% of gaming revenue. You put exactly the same bet, and it doesn't need to be a micro bet, it can be for the Jets or the Giants to win, and it's just after the, you know, in the first quarter, for example, and we take about 5% of that bet. So it's 3x revenue and not a single cent extra in terms of cost. There's no additional cost in terms of actually servicing that bet. So, you know, yeah, I'm in a very fortunate position to have a lot of tailwinds and different opportunities and levers for growth in this business. Yet, the move from pre-play to in-play sports betting is definitely one of them. ... Yep, yep. Understood. All right, well, maybe, you know, we'll stay on betting technology, but move off of BetVision. If we just take, you know, the 10,000 foot view and think about, you know, where you are relative to the sportsbooks, you know, with this upcoming renewal versus where you were a couple of years ago, just how do you think about your relative leverage in terms of, you know, ability to take price, you know, going forward? Yeah, of course. Yeah, we, you know, just on the earnings call last week, we talked quite a lot about, you know, taking price on sportsbooks. I guess it's worth just... I guess we need to be a little bit careful we don't overplay it, the significance of next year. You know, in our European business and, you know, other areas, mature markets like Australia, you know, we, we've been renegotiating contracts for years, and every single time we've been doing that, there's been an element of taking prices as the whole markets mature. And that's the same for the U.S. next year in 2024. You know, to be clear, we have long, good working relationships with our sportsbook customers, and we'll continue to have those working strong partnerships really for many, many years. But in terms of, you mentioned the word leverage, Bernie, I won't use that word, but you know, it, you know, we are fundamental to sportsbooks, enabling for the sportsbook to offer a legal in-play sports bet, not just on the NFL or March Madness or the English Premier League, but on the other 200,000 events that we provide into the market. You know, so, you know, we're one of the very few suppliers, if you think about a sportsbook, where we are absolutely essential for that sportsbook to be able to do its job properly. So, you know, we believe that our data is still very under-monetized in the market, particularly given that importance. So we're very confident about our relationships with sportsbooks. We're very confident that we'll continue to have really deep and deepening relationships with those sportsbooks for many, many years. Part of that will be increasing the value of those contracts over time, but sometimes that isn't just about raising prices. Some of that is about things like BetVision that we just talked about, Bernie. It's about layering those value-enhancing products that we're doing, like BetVision, like our media work, like our free-to-play games, additional content- Yeah ... outsourced bookmaking. You know, take your pick, Bernie. You know, they're all levers which ultimately end up meaning the value of our contracts grow. Yeah. And not, I mean, maybe as a follow-up there, just how do you think... You, you mentioned that you think you're under-monetized. Is there a way to think about, you know, how much you're making per dollar of bet from the consumer in the U.S. right now versus the U.K. or Australia, just to think about kind of where that relative rate could go over time? Yeah, I mean, we always compare ourselves. We look at some of the content providers in sort of sister industries. So you look at, you know, content providers to casino industries, for example. You know, they're charging somewhere in the region of probably three times what we're charging, anywhere between sort of 10% to 12% of gaming revenues. Now, I'm not even remotely suggesting, Bernie, we're going to be charging that in the next, you know, next 12 months. But it gives you an indication of the sort of journey that we're on over a long period of time, remembering as well that, you know, the competitive landscape in our world is different to the competitive landscape and in terms of gaming with official rights and the portfolio of the 200 and 1,000 events that we provide into the market. So, but we think we've got a lot of runway. But I, you know, to reiterate, this is also about being strong long-term partners with our sportsbooks and getting deeper relations with them across all of our technology suite. And as I say, I called out just a few examples of things that we're already doing for most of our global sportsbooks, whether that's in media or whether that's BetVision, because that's obviously a fresh topic, or free-to-play games or so on. Right. And so I think a pushback I've heard to the iCasino comparison is that, well, they're paying for IP, like Wheel of Fortune and things like that. But I think your response, given what you just said, is, "Well, yeah, but you're also paying for the NFL and the EPL, and those are high-quality brands as well, too," and- Well, that's exactly right, Bernie. And as I say, but it's also not just data, it's technology. And, you know, the deals that we did with sportsbooks three years ago was the first time really we had done overarching umbrella contracts that weren't just plain data deals. You know, media, you know, we did $120 million of minimum spend across the three years for the main U.S. sportsbooks for programmatic media spend. That's the first time we'd wrapped those that service in with the same contracts. And, you know, we've had real success in that, as you can see from our growth in our media revenues. And that's a part... That, that's been about not forcing sports books to spend that. That's been about, introducing them to that spend, getting them in to spend, and then delivering on that spend, and delivering, the ROI that the sports books require, so that the sports books are spending significantly ahead of any of the minimum spend that they have in their contracts. ... understood. And when we normally, you know, talk about product and, you know, technology with you guys, it's very, like, AI-focused. We're talking about, like, BetVision, and then Dragon, Second Spectrum. It's all Second Spectrum-based generally, but kind of like core, just like, you know, like DraftKings was using you guys, I think, for Same Game Parlay. Like, how should we think about how many, like, tech enhancements you guys are adding, just on, like, the core, like, maybe call it nuts and bolts part of the product? Yeah, we certainly, in our perhaps longer term relationships with the non-U.S sportsbooks, there were very, very few. I can think of probably only one where we're not providing a significant layer of technology to the sportsbooks. So various things, as I say, outsourced bookmaking, odds setting. As sportsbooks move to an in-play model, of which, you know, the UK market, for example, has been the case for a number of years now, the actual odds setting for sportsbooks becomes more of a commodity, Bernie. Because the reality is you've chosen to bet on whichever sportsbook you're betting on because of the bonusing engine or because of the customer journey or how they look after you as a customer. You're not necessarily, at this point, when it's in-play sports betting, switching between different sportsbooks to see what better odds you're getting. So what you find in the more mature markets is a lot of that kind of odds making and odd setting is actually outsourced. You know, we and some of our peers do a lot of that on behalf of the sportsbooks. And that's just one example of the technology we lay. You remember, we actually started off as a technology business. That's where Mark Locke and the team founded this business. So there's a whole product suite of technology that we provide to sports in the first place. As you know, from a which makes us very sticky with the 400 to 500 sports and federations that we're working with. So that's in our DNA. And you're right, obviously went out and bought Second Spectrum and FanHub, that massively enhanced our free-to-play offering that we offer both to sports and sportsbooks, you know, probably 2 to 3 years ago now. So, but that's massively exciting for us. And you're absolutely right, we talk about it that it's that exciting layer on things like BetVision and all the broadcast and, you know, that we talk about. But the technology we have ingrained throughout the business is significantly valuable to us. Yeah. No, that's great. And just a reminder, as we're approaching the last couple minutes, if anyone has any questions, please, type them into the portal. We'll be sure to get to them. But maybe just the last line on, on betting technology. So, you know, in your, it's not the tube, it's the 6-K, I think, you provide all these, you know, different drivers of what's happening with betting technology revenue. I just wanted to run through them quickly just so we understand. So, like, new customer acquisition has been, like, a major source of growth, which, you know, at this point, like, the U.S. is already... You know, the U.S. has been around for a while. So, like, where, like, where should we think about the new- those new customers coming from there? That's been a major driver of growth in the past years. Yeah, we've had a really good year in 2023, Bernie. You're absolutely right on that. They tend to be outside of the U.S., most of them in reality. You know, a good example, I guess, looking over the next 12 months, will be LatAm. You know, we've talked about LatAm as another significant area of growth for us over the next 36 months. And you'll get some of the more familiar sportsbooks will no doubt have brands that trade in LatAm, and we obviously have those relations. But there'll also be local heroes that scale in these particular markets, and that—it's those kind of people we're still winning for exactly the same reasons we're working with U.S. or U.K. sportsbooks or European sportsbooks. You know, our 200,000 events are global events. And it doesn't matter where you sit as a sportsbook, you know, they're still absolutely fundamental if you want to be offering a, you know, a viable and competitive sportsbook in whichever industry, whichever geography you're sitting in. So yeah, we're really pleased with that. You know, I think we said, you know, I think quarter-over-quarter, our European business grew 30% year-over-year. So, you know, really good growth there. Yeah. No, that's great. And then customer utilization, I mean, that was- that's been picking up as being a driver as well as price increases as well, too. Like, where should we think about... Or I guess, what's driving that, and then is in-play betting, like, part of that? Like, if we see higher betting penetration of in-play in the U.S., is that where it would show up in your financial? Yeah, that's absolutely one of the drivers in there, Bernie. That's exactly where that shows up. The other is back to my comment around fixed-fee contracts in the European market. What happens is most of those customers are also on what, you know, we term the overage, which means that, you know, if you, if you've signed up a deal for 100,000 events and you start taking 101,000 events, 102,000 events, you start paying me overage. So, again, that's where that shows up. So, that's also about getting more customers taking more events from us. Okay, understood. Data rights, anything interesting coming up in the next year or two that has your eye? Yeah. Yeah, we've got what we need, Bernie, to execute on the plan that we have. So, you know, we, we don't need anything that is coming up. Having said that, there's always interesting rights coming up, Bernie, and there's a lot of interesting stuff that we'll be honored to work with sports on, on, on data rights. What I would say is we're at a position now, it's fortunate position, to be able to say, "You know, it has to work for us financially, any new data rights deals." And that either means on a standalone basis, or as you're seeing more and more, on a sort of wider technology partnership basis. So it's a bit of a yes and no answer. Yes, there's always things that are interesting, and there's some great things coming up, but we don't need them to deliver on where we are today. Got it. Okay. And then just lastly here, just, you know, dovetailing off that thought on data rights, just incremental margins for, you know, 2023, I think is gonna end up being about 50%. Just how we should think about 2024, and then even the longer term as well, too. Like, what's the best way for investors to be thinking about that incremental EBITDA margin? Yeah, of course. But we're expecting EBITDA margins to continue to expand in 2024. I mean, it's the headline. I mean, we will give guidance and it seems to be traditional that we're giving it in the sort of turn of the year, so I expect us to do so again. So we'll put a bit of color on that. You know, fundamentally, the reasons why, you know, our EBITDA margin got, like, from about 5% in 2022, I think this year, I think implied guidance is around about 13%, isn't it? I think in 2023. Look, the dynamics that are fueling that, you know, strong double-digit revenue growth, relatively fixed cost base, very visible cost base, you know, those things don't stop at the 31st of December this year. You know, those dynamics are running through 2024, and indeed 2025 and 2026 and beyond. Now, what that drop through... As I say, we'll give a bit more detail. But, you know, that visible cost base continues next year. You know, we set out some time ago, didn't we? I think we said, "You know, this is a business that's gonna generate north of 30% EBITDA margins." And every quarter that ticks by, we get increasingly confident that that's the case. You know, we aspirationally said, "You know, we'd wanna hit 40% EBITDA margins." You know, and given the profile we're seeing and given the line of sight that we see, given our visibility of our cost base, not just for 2024, but beyond, you know, we get ever more confident that we'll achieve it. Right. And then that conversion of EBITDA to free cash flow, you know, just CapEx, working capital, like NOLs, you guys are working through, like how we should think about that conversion over the next couple of years as well, too. And then also importantly, what do you plan on... You know, it seems like this question was never gonna happen for a lot of our coverage, but now it's like, "Well, then what are you gonna do with the cash?" Like, is M&A- Love that question, Bernie. Look, I mean, for a free cash flow, I would think of it's pretty close to a kind of, sort of EBITDA less kind of capitalized software is the way to think about it. So, you know, our capitalized software's been running broadly around about $10 million a quarter, I think, for the last probably 8-10 quarters. So, you know, it's not grown in line with revenue. I'm expecting that number probably to come off a little bit over the course of the next, you know, it's probably about $10 million for this quarter we're currently in, and then probably to start reducing as we get through the back end of 2024. Therefore, between that and free cash flow, there'll be a little bit of working capital. It's a bit seasonal, depending on when rights fall and mix of revenues, but in the year, it broadly washes out. It's probably marginally negative in the year simply because we're growing, Bernie, and we need... You know, you've got a company growing at, you know, what we were, 28% revenue growth or 29% revenue growth last quarter. Naturally, working capital works slightly against you. So I don't make no apologies for that. But yeah, if you're thinking about it as broadly a sort of EBITDA less that CapEx number, you're gonna get... You're not too far off the way we're thinking about it internally. In terms of what we're gonna do with that? Look, I'll go back to a little bit on the right answer that I gave Bernie a second ago, is that, you know, we've got everything we need. We've got everything we need from a technology perspective. You know, we're spending that R&D I've just talked about. We're investing. You know, there's a huge amount of investment being made in things like Second Spectrum, you know, $250 million over the course of the last, you know, 15 years since it existed. So, you know, we're not starting with a blank piece of paper looking to having to develop now. There's been a huge, you know, fortune spent on this technology with things like Second Spectrum for many years. We will continue to look at some M&A potentially. But again, it's a bit like the rights. It would have to work for us. It would have to be relatively immediately accretive. It's probably more likely to be a sort of, I guess, a tuck-in technology, something interesting. The classic sort of buy-build analogy of whether it'd be better to go out and buy something at the right price, because we've got the distribution network, either to sports or sports books, or indeed, increasingly broadcasters and media companies as well. So that's kind of how we're thinking about it. Great. Well, Nick, I don't see any more questions from the audience, so let's leave it there. Thanks again for the time, and talk soon. Appreciate everyone being here this morning. Yeah, thanks so much, Bernie. Have a good day. All right, thanks. Thank you, too.