Get started here, with the next session. It's my pleasure to have on stage with me, Mark Locke, Co-founder and CEO of Genius Sports. Mark, thanks for being at the conference. Thanks for having me. Sure, so maybe just to start, for those less familiar with the story, why don't you just set the table around introducing the Genius Sports story, talk about the different businesses that you've built, and how Genius fits into the broader sports ecosystem? Sure. Genius Sports is a technology company at heart. We've worked in the sports betting sector for you know, north of 20 years, and initially as a you know, a startup in the most traditional senses. Fundamentally, our business is about collecting and distributing live sports data. We work with global leagues and global sports. We collect data from hundreds of thousands of sporting events every year, and we do that in various different ways. We do it either manually by sending people to games. We've got a network of about 7,000 agents that we work with globally. All the way through now to much more sophisticated data collection methodologies, which we've developed through computer vision and AI machine learning. So the data that we collect, we bring into the business, we then package that up. We either build products off of it, or we distribute that data to various different industries, one of which is sports betting. So we provide the bookmakers with a lot of the data that allows them to manage their events. We also combine that often with prices and risk management services. But we also service the media sector. So we have a DSP and platform that we work with leagues, and we work with the bookmakers, and we work with brands who are interested in accessing a sports audience. So we use that data to make better buying decisions for them so that their returns are higher. And then we also work with, you know, broadcasters and again, the sports themselves. We take that data and send it back to them. So we've got various, different ways of monetizing underlying sports data that we collect. Got it. Maybe just sticking on the data rights side, just talk about the portfolio of sports rights that you've built, you know, over time, and the different sports that you're exposed to. And then we can get into maybe some of the specific agreements that you've recently expanded. Sure. Yeah, so it's actually quite an interesting journey, that the sports data rights market hasn't always existed, but obviously, the betting markets have. So historically, the bookmakers collected data wherever they could. They went out into the market, and there were lots and lots of different suppliers of various different bits of sports data. The big change came when, and you know, we're starting to see this in America, this huge change, this massive shift to in-play betting. But the big change came when the sports betting industry started to offer in-game betting or in-play betting. And obviously, to offer in-game betting, where you're able to bet on the next event, you know, it might be the next down, it might be the next goal in a soccer match, whatever it is, you've got to have live data. Otherwise, you can't, you know, result a bet, and you actually can't change the lines, or change the odds, as we call them in Europe. And so the need for live data coming from the grounds became, you know, very clear. So we built a set of products off of that, and then we started to work with a lot of the leagues to create an official model for that. So we created this official data rights model by working with some of the global sports leagues that took off. We spent a long time building up a large portfolio of rights. We spent, you know, maybe 10 years doing that, and then we secured a deal with UK Football, and you know, our business is very global. We work, you know, within all regulated betting markets. Obviously, Europe's the, you know, the largest and, you know, the original market, so we worked in that sector, and we secured a deal with UK Football. UK Football is the biggest betting sport in the world. Off the back of that, we then started to work to get the bookmakers to understand the value of official data, understand that, you know, they know that the data that they're using to result their events is accurate, comes from an official source, is sanctioned by the leagues. As a result of that, our business kinda grew. I guess the sort of highlight of the last few years was a deal that we secured with the NFL to provide them with a bunch of technology and, in exchange, for technology and obviously cash as well. We have a deal with them, which allows us to distribute their data into the betting markets, as well as actually supporting a lot of our media products, which I'm sure I'll come on to later. Great. And you recently, you know, renewed and extended your partnerships with the NFL and recently, Football DataCo. Yes. Maybe just talk about, to the extent you can, the structure of those deals, the kind of how far out they go, and what that does in terms of visibility into the model going forward. Yeah, I mean, that's the key. So the beauty about our business model is we know what our costs are gonna be a long way out because, you know, the biggest variable factor in, you know, I guess historically for our business was not knowing, what our, renewal costs would be for the main deals that we've got, which is, as you know, from just the NFL and UK Football. The last, you know, year or so, we've renegotiated and secured both those deals out till, you know, the 2028-2029 season. And, as a result of that, we've got complete visibility over our cost base. You know, we know. I mean, we know what our rights fees are gonna be. We know how that evolves. Obviously, we've got a you know, huge amount of control over the rest of our cost base, you know, business people and property and, you know, all the other things. So, you know, the really exciting thing that we've got now is a long-term runway, complete control of our costs, total visibility, so we can be very confident in the way that we forecast. You know, we know how the business is going to grow, both you know, in terms of the rate of growth of some of those cost lines, because there are some escalators in there. But fundamentally, we've got great visibility. Great. And we'll get into the international dynamic and exposure of the business. When we think about the data rights portfolio as it stands today, are there any holes that you, you know, think that you need or want to fill from specific sports for Genius specifically? And then at an industry level, maybe just talk about how you see the potential for consolidation of data rights over time and what the competitive landscape looks like. Yeah, it's interesting. The data rights market, I guess, went through a bit of a boom, you know, a few years ago. There was a lot of competition for a lot of rights. And from our point of view, the most important rights that we have, we've already touched upon two of them, the NFL and UK Football, but also, there's a handful of others that give us a large product portfolio, including FIBA in basketball, which covers, you know, somewhere sort of 60,000-90, 000 events on a global basis. So, you know, we think often as a business, in terms of the number of events we cover, having twenty-four hour, seven day a week offering, you know, think of a shop front that's always available with new products in it. So, when we think about our business, we are very happy with our data rights portfolio. And ultimately, what you're, you know, the question where the question goes to is, you know, what does it do to your data rights cost line in the business? And it means that we don't have any need to do any deals on the data side over the next, you know, five years, unless there was a particular particularly attractive financial model. It is effectively going to be highly profitable for us. We wouldn't really consider doing it because we have, ultimately, all of the data that we need, and we have all of the leverage that we need through the relationships that we've got. Yep. And you talked earlier just about how the relationships with the leagues go beyond simply the data rights, right? So talk about, you know, how you've positioned yourself as an important technology partner and provider for leagues and what that looks like. Yeah. So, I mean, generally, the space—I mean, as I said right at the beginning, we're a technology company. That's our DNA, that's where we come from. And, so our strategy has always been to partner with leagues and federations to give technology in exchange for rights. Originally, it's because we didn't have any money, so we couldn't afford to buy them. But, actually, another reason that it's been such a successful model for us is it gives us a lot of longevity in those leagues. So if you look in the, you know, U.S. market, for example, we work with, you know, college. We have technology in every single, you know, pretty much every single U.S. college where we're collecting data and again, distributing that to various different parties, and as I said, we work with FIBA in every single one of these basketball games, somewhere between 60,000 and 90,000 games a year in 150 countries. We've got technology in there that's collecting that data. So we have a wide distribution of data. So I think from our point of view, we're in a place where... Sorry, the original part of the question was? Just the technology partnerships that you developed with the leagues. Yeah. So the technologies are really allowing us to sort of effectively have more than just a rights buying and selling relationship that often you see in this market. We're much more of an integral partner, and we're adding a lot more value to the leagues. And what that sort of proves out is when you look at some of the renewals that we've done, the most important deals that we've done recently, including, you know, especially actually, you know, UK Football. We announced a deal where we renewed UK football, but also announced a deal where we developed and distributed something called SAOT, which is... It's funny, actually, if I was in the U.K., everyone would be asking about this, but the audience is slightly different here. It doesn't hit as well, but the SAOT is called Semi-Automated Offside Tracking, and what it is, it's a computer vision product that watches the game, understands the game, and highlights when offside, which is a, you know, particular event that happens in soccer, and basically informs the referees, and the reason that that's so important is because we're going to automated refereeing, and there's been a lot of controversy in the U.K., especially over bad offside calls with old technology. So when the leagues look at doing those deals with us, and they look at renewing those relationships, the fact that we can offer those sorts of technology services and solve what is fundamentally a very big problem for them is a very attractive part of our business offering. Great. And maybe just shifting to the sportsbook side of the business and the relationships. You've talked on prior earnings calls about being in the process of renewing several contracts with sportsbook partners. Just talk about that relationship, how those conversations have gone, and how those long-term partnerships kind of fit, and the sportsbooks view you as a partner- Sure. ... within their businesses. Yeah. So again, you know, we sit at the heart of this ecosystem that connects the sportsbooks to the leagues, as well as media companies, advertisers, broadcasters. And a lot of our relationships, a lot of our deals have been based off of, you know, contract terms that, you know, fundamentally around the products that we've launched before, including the NFL. So a large number of our deals came to an end this year. So we've been in a renewal process, which has been fairly highly publicized with a lot of these bookmakers. And it's gone extremely well. One of the things that we've been saying for a very long time, and if you've ever just sort of listened to any of the stuff that, you know, we've spoken about Genius, is we sort of say the data is very undervalued. If you look at the, you know, the, I guess, similar industries, if you look at something like a casino or a blackjack table offered by some of the big suppliers to the sports books, they'll be charging somewhere between 9%-13% for that. And data is charged at a much lower percentage of GGR, and that's a much, much, much higher percentage of GGR than is charged for data at the moment. So we've always seen this huge ability to grow our share of the wallet and effectively increase our take rate. And so as part of these renewals, and obviously with the support of our, you know, our renewed partnerships, you know, one of the things we've been keen to do is to sort of have a conversation with the market about how those values change and the value of data in the market and maybe different ways of looking at adding value, providing more products, but in exchange for taking a better share of GGR. So those conversations have gone extremely well. I mean, I would say people ask me how they go a lot, and I would say, they've actually gone almost exactly as I thought they would, and probably a little faster than I thought they would. So we're in a very, you know, very happy place with our relationships and our partnerships, and, you know, we're excited to be working with the bookmakers, also the sports books, to provide them with, you know, a lot of the new products that we've been investing in and, you know, hopefully, you know, growing together in partnership as we have for years. So we feel good about it. Understood. That's very clear. And I mentioned kinda the international scope of the business, so maybe just give a lay of the land. Obviously, there's a lot of focus at a conference like this on the U.S. opportunity- Yep. But maybe just talk about the international scope of the business, number one, as it sits today, and number two, you know, I think you've also talked in the past about the opportunity with Brazil specifically. Yeah. Right. So, just talk about that opportunity and your latest thinking about Brazil as an emerging growth area. Yeah, sure. So, I mean, the global sports betting market is interesting. It's still growing very nicely. I mean, you know better than I do, and you know, our part of that market is very important. Again, coming back to the data rights, and I guess what's been the theme of this conversation so far, you know, best sports - sorry, soccer is such a big part of that, and our position in soccer is so strong that you know, as part of our renewal process, it's not only in the States, we've been renewing a lot of our European books, and the European market is growing, our share of that market is growing, so overall, you know, we're seeing that business developing very nicely. It's highly, highly cash generative for us, on our U.S. business. So, we're feeling, you know, we're feeling very optimistic about a number of the opportunities that we're seeing outside of the U.S. You know, Brazil, I mean, we as Genius were there last week for the NFL game with the NFL. It's a big market. There's a lot of launch. We have close partnerships down there. We work very closely with the governments down there. And we think there is a massive opportunity down in Brazil. I mean, I think I've cautioned in a few of the chats about how quickly that will happen. I think everyone got quite excited about it happening middle of this year, and it's not. You know, people are saying, you know, end of this year, early next year. I'm cautioned a little bit on the speed of that, and certainly when we're doing our forecasting, we're a bit more cautious than that, for sure. So, but it doesn't take away from the fact that the opportunity there is massive. You know, there's a big drive from, you know, as I said, the fact that the NFL had a Brazil game and had a game in Brazil last week is a really big deal. So, you know, there's a lot of growth opportunities down there, and we're excited about it. Great. So in addition to the growth opportunity from just the adoption of sports betting on a global basis, you also benefit from the rise of interactive betting and in-play betting. Yeah. So just talk about the benefits of in-play betting for you and frankly your customers, right, the sportsbooks, and what that means for unit economics and profitability for the business. Yeah. Yeah. So, I mean, in-play betting is probably the most important thing that we can talk about. And in fact, it's going to be the most important thing in the world of sports books over the next few years, especially in the States, so in-play betting is, you know, in the European market, say 70% of all bets are made during the game, in play. In the U.S., call it 25%. You know, you can argue about the numbers, but around 25%. And one of the things that's so interesting about in-play betting versus pre-match betting is the margin that the bookmakers make. They make, you know, for ease of math, double the margin on in-play bets than they do on pre-match bets. The other thing that's so interesting about the sports books is they have much more engaged customers. If you're betting and you're betting on the next goal, the next down, the next whatever your you know half time full time score whatever it is, you're a much more engaged player. It means you've got the ability to sell them more products. You know, problem gambling actually reduces. All of those things are very very positive for the bookmaker. So there's a big focus, and you know I was listening to Jason Robins the other day talking about it on his he had a fireside chat, and you know that's a very very big focus for them DraftKings, and you know again we are a huge proponent of that growth, and again it's where we come from. We come from providing live data for these sports books to be able to do that, and I think the interesting, you know, not only the economics really interesting, from the bookmaker's point of view, obviously, they're even more interesting from our point of view, so we, as a business, you know, take a share of GGR, as I said, and if you think about the compounding effect of going from 25% at the moment of the U.S. markets bets being in play to, say, up to 50%, 75%.... We are obviously taking a slice of that. On top of that, our share of in-play bets, we get paid more for a share, about three times what we do on the pre-match bets. So that's a compounding effect, plus the margins are better. So the effect of in-play betting is really, really good for the industry and really, really good for the bookmakers, but it's really good for us because, you know, that compounding effect has a huge effect on our business. So the other part of that which is really interesting is the rollout of this new product called BetVision. So one of the things that's always said about the U.S. market is why is it only 25% versus 70%? Does that mean the U.S. market doesn't want it, or does that mean that people are skeptical about it? And the answer has always been very much around the product. You know, the product in the UK has been very much focused around live betting, and the product in the U.S. hasn't always been, hasn't always been focused because it's a new market. And that's really changing. We launched a product, a year ago called BetVision. We launched it with FanDuel and a number of the other U.S. sportsbooks, which is where we're taking a live, near live, five-second delay, NFL game, and we're streaming it into their platform, and we're overlaying and integrating, you know, some of the technology that we've got through our Second Spectrum acquisition through computer vision AI, effectively putting bets in front of people so you can engage with the game in a, on a live basis. Now, that BetVision product, I encourage you all to go to any of the sportsbooks in the U.S., if you're able to, and just watch a live game and use BetVision. That is driving people to an in-play model. There was an investor day, I think, last year or two years ago, where FanDuel came out and said that I think it was 63% of all of their bets on the NFL were made from the homepage, okay? So they weren't getting people to go on a journey through their site. And then again, you know, most of the bets are pre-match. When you look at our BetVision products, some of the indicative results we had last year were showing that 76% of bets were actually made in-play. So you're going from a base of 25% at the moment, when you put the right product in front of the audience, you integrate betting in the right way, you market it the right way, you can get up to 57.6% of bets being made in play. So we're really excited about this product set. All of our new deals have include the use and the distribution of BetVision. Again, you know, while we're definitely increasing our share of wallet, we're adding a lot of value by adding new products and then rolling them out to our partners. So we're feeling really good about this opportunity, and that's really where the big drivers come. And again, I listened to Jason, I listened to Peter at Flutter. You know, they're all saying the same thing. It's what the industry's focused on, and it's gonna make a huge difference to how it evolves. Great. And it seems to be, you know, rolling out over time to various sportsbooks. You know, you mentioned, you know, some early adopters about a year ago or so. Talk about the path to getting more adoption by more sportsbooks, from here, right? I think DraftKings has talked about this. DraftKings have gone live with it. Right. Yeah, it went live with DraftKings last week. Just talk about the path for not only new sportsbook adoption of the BetVision product, but also the ability to start to integrate different sports other than the NFL into the BetVision product. Yeah, so that's obviously a key part of it. I mean, at the moment, you go to a sports betting site, and you bet through the normal bet slip interface. This is an evolution of that. You're watching the game, it's integrated, you can click on the events. In fact, a lot of the new product that we launched this year in BetVision is you're able to click on the players and get the stats up and really interact with the game in a much more, you know, on a, you know, more full basis. So, clearly, the evolution of that is additional sports. The reason that we have a unique position in this market, and the reason that we can do this and, you know, quite often people sort of miss this, but it's because we developed and we spent, you know, I think, you know, so over $400 million over the last 10 years on computer vision, AI, and machine learning business that we bought and have been investing called Second Spectrum. What that business does is it watches and it understands the game. Now, because it understands the game, we can recognize players, we can put overlays, and that's fundamentally what this BetVision product is. It's an overlay and an integration of the technology into a video stream, combined with the ability to bet. So, you know, as long as we've taught a computer to understand the particular sport, like we have with the NFL, and we have with soccer, and we have with basketball, you're able to roll that experience out. So, what we're doing now is applying it to soccer in a very material way, and we're applying it to basketball in a very material way as well. So, we're going to be seeing a lot more events coming through that over time. Great. And it wouldn't be a tech conference if we didn't talk about AI. Yep. And you touched on Second Spectrum. So, maybe just share kinda what Second Spectrum is, and how you're deploying that technology today in your products. Yeah. Second Spectrum is a technology company that we bought three years ago, I think it was. We'd just gone public. It was, you know, it was and still is the absolute leader in this market. What it had done, which is, you know, unique or fairly unique anyway, I don't know anyone else who's done it, is taught computers to understand sport. What it does is it watches games, and we can watch them either through our own technology that we've deployed, called Dragon, which I'll talk about a bit more in a minute, or you can watch it through video streams that are freely available. The computer can understand what's going on in the event. So it can recognize players fairly simply, but it can also recognize plays. It can, you know, track players on a game. You can work out how high someone's jumped, how fast the ball's gone. You understand the types of play. So in basketball, you'll have lots of defensive, offensive plays. It will recognize those plays. It really understands sport. You know, that's the semantic layer that we've built. And so that business, when we bought it, had a large amount of money invested in it. You know, they'd done very, very well with the technology, and you know, the rationale for us buying at the time was very much around our ability to monetize it in a sort of much wider way. So we've got lots of relationships with sports leagues, and most of our major sports league relationships, including the UK, have got a rollout of the Second Spectrum technology, basketball again. But also, we're able to use that to collect rich data and create new betting opportunities for the sports books, and new opportunities for them to monetize that data. So from our point of view, that was a very good acquisition. We then invested, you know, more aggressively in that business over the last few years, which sometimes was a bit. We came under a little bit of pressure for doing so. But off the back of that, we, you know, we've managed to launch a number of new products this year. As I said, BetVision's out there, but there's SAOT, the Semi-Automated Offside Technology. And again, that's given us more of a position with the leagues and allowed us to be, you know, to be a better partner and to ultimately negotiate, you know, very beneficial relationships with these guys. So it's been a very good experience for us. Great. BetVision, Second Spectrum, all of what we talked about, I think, kind of aligns with things we're watching around the convergence of sports content, technology, where you sit, and sports betting. So I'm just curious, what is your view on kind of what the big unlocks are from here to kind of get that flywheel going around the those convergence, number one? And then the second part of that is, do you think this primarily will show up in driving more engagement with the larger, more popular sports, or could this kind of expand the engagement to the long tail of sports over time and kind of expand the pie? Yeah, so it's interesting. I mean, the answer, I mean, the biggest driver and the thing that unlocks it is going to be live betting. And I've talked a lot about why live betting is so important for the sports betting industry, but I haven't really touched upon why it's so important for the sports industry, and I think this is really worth just thinking about for a second. If you're a sports league or a federation, your biggest challenge these days is really engaging your fan. It's engaging your next generation of fan. I mean, if you're a franchise owner, if you own, you know, one of the major, you know, NFL teams or soccer teams or anything like that, what do you really care about? You care about your franchise value, and your franchise value comes from whether you've got people watching your sport, buying tickets and engaging with you. And that really, that fan engagement piece, I can't underestimate, sorry, overestimate how important that is. It's critically important. And where this sort of harmony comes and why there's this sort of great, you know, symbiosis, I guess, between the sports leagues, the sports betting companies, and us, that's sitting in the heart of this and connecting those is that what we're doing is we're really providing an engaging product for a sports fan. So the leagues and the owners of the leagues, they're happy because people are engaging and watching it, and the way they're doing it is they're engaging it in a very gentle basis through live betting. And that's become a really big part of the sort of story. And ultimately, that's what we're gonna be seeing, you know, unlocks, you know, a lot of the opportunity and potential going forward. Great. So maybe just pulling this all together and kind of moving down the P&L a little bit, you know, we talked about the data rights cost being, you know, having a lot of visibility. You are a technology company, so you are investing in products. How should we think about the key investment priorities for you from here, number one, and the incremental margin and operating leverage that you see in the business? Sure. So, I mean, like you say, you know, our cost base is well understood for a very long time and well under control. We invest a very healthy amount of money in R&D, you know, about $40 million-$45 million of CapEx. So, but, you know, we feel very good about that number. It's not going to grow significantly or at all, really. And in fact, you may even see a sort of you know, pull back on that a little bit as time goes on. So from our cost point of view, you know, we feel good about the level of investment we're making, and we feel good about where we are. We're seeing, you know, as I said, we've had long-term margin targets that we've put out there in excess of 30%. You know, we feel very good about them. We've seen very strong margin growth. I mean, eight hundred basis points of growth between Q3 and Q4 this year. So, we're feeling very good about the way that our margin is improving. You know, overall margin went from 12% to 17%, and again, we expect to see, you know, that grow over time. So overall, you know, all the indicators and the journey and the path that our margin's gone on has been in the right direction. So yeah, we you know cash generation again cash narrative this year. And again that's something that's gonna come through very aggressively over time. Great. And if Nick was here, I'd probably direct this one to him. But you mentioned that you are expecting to generate free cash flow this year. You have visibility kind of into the margin expansion path on a multi-year view. So, you know, philosophically, how do you think about capital allocation priorities for the company between, you know, investing in some of the technology, you know, products and services, versus, you know, potentially returning capital to shareholders over time? Yeah, look, I mean, we have an absolutely massive opportunity ahead of us. I mean, the thing we focused on today is really around the betting and the data piece. But you know, we have a media business that we've been growing very, very strongly, 60% up, you know, which is around the DSP. I mentioned it earlier in the conversation. And that you know, we launched a new something called a self-serve product, you know, last month, which you know allows us to offer a service very similar, in case you guys know Trade Desk. That's a very interesting move for us because we have this unique data sets where, you know, and our ability to own and control a lot of the media space in the sports sector, as well as knowing what a sports fan is, gives us the ability to go after an entirely new TAM for us. So a lot of the investment that we're now making, and again, this isn't something we need to grow, but that what we're now making is really gonna be focused around that media business. It's growing that platform, you know, and, you know, really accessing this, this new TAM that's available to us, and an engagement that we've been making with a lot of the brands and the agencies as well. Other than that, you know, we've been executing. There is an open question on capital allocation. Obviously, everyone knows there's a couple of parties in the market at the moment in our space that are for sale and, you know, but equally, we don't really need anything. We don't really need to do any deals. You know, we feel very good about the business on a standalone basis. At the moment, our focus is executing, making sure we get the renewals over the line, making sure our new product launches have gone as well as we can, making sure we're converting people to self-serve, we're accessing these new TAMs. I think, you know, in the beginning of 2025, you know, we'll probably lift our head up a little bit from that and start looking a bit more widely about other ways to allocate capital. I think the way, at the level of investment that we're making in the business in terms of R&D and OpEx and CapEx, in terms of our systems and technology, is at a level that I'm very comfortable with, and I don't feel the need to be more aggressive with. Great, and maybe in the last few minutes here, bring us home. Maybe just talk about what you're most excited about executing against at Genius over the next 12 to 24 months. So the thing I'm most excited about is the self-serve platform now. You know, we've spent a lot of time working on this. You know, the rollout Second Spectrum has been good, and you know, we know it works, we know people are buying it, and that's now kind of just part of the machine of Genius. But the thing that we're really excited about is self-serve. So a lot of our renewal conversations with the sports books involve an adoption of self-serve, which is very exciting. Again, this is the product that puts us in the trade desk space, gives us access to that TAM, gives us the ability to go, you know, into the brands and the agencies in a much more aggressive way, and really introduce sports fans to big brands, you know, whether it's Heineken or Gatorade or Amex, whoever it is. So that's an area I feel very, very bullish about. You know, as I said, the size of that opportunity is colossal. It really, really changes and pivots the way that we think about the business and the way that we are able to deploy a lot of the data and the underlying value that we've got in our business already at a very, very, very high margin, because, you know, again, there's no incremental cost to us doing a lot of this. So we feel really excited about that opportunity, and yeah, I expect to be talking a lot more about that over time. Great. Well, Mark, thanks so much for being at the conference. Thank you. Really enjoyed the conversation. That's great. Please join me in thanking the team from Genius for being at the conference.