SRAD

Hello, everyone. Thank you for joining the Sportradar Q1 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Jim Bombassei, Head of Investor Relations and Corporate Finance.

Thank you, operator. Hello, everyone, and thank you for joining us for Sportradar's Earnings Call for the First Quarter of 2026. Please note that the slides we will reference during this presentation can be accessed via the webcast on our website at investors.sportradar.com, and will be posted on our website at the conclusion of this call. A replay of today's call will also be available on our website. After our prepared remarks, we will open the call to questions from analysts and investors. In the interest of time, please limit yourself to one question and one follow-up. Please note that some of the information you will hear during our discussion today will consist of forward-looking statements, including without limitation, those regarding revenue and future business outlook. These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast.

For more information to the risk factors discussed in our annual report on Form 20-F and Form 6-K filed with the SEC along with the associated earnings release. We assume no obligation to update any forward-looking statements or information we speak as of their respective dates. Also, during today's call, we will present IFRS and non-IFRS financial measures and operating metrics. Additional disclosures regarding these measures and metrics, including a reconciliation of IFRS and non-IFRS measures, are included in the earnings release, supplemental slides and our filings with the SEC, each of which is posted to our investor relations website. We may also discuss certain forward-looking non-IFRS financial measures that cannot be reconciled to the most directly comparable IFRS financial measure without unreasonable efforts. Joining me today are Carsten Koerl, our CEO, and Craig Felenstein, our CFO. Now I'll turn the call over to Carsten.

Good morning, everyone, and thanks for joining us. Today, I will discuss our Q1 results and operations, which reflect our premier position as a scale leader in the expanding global sports data ecosystem. I will also highlight the accelerating business momentum we anticipate over the course of this year. The appointment of Sameer Deen as COO, the enhanced open market repurchase program, and reaffirming of our 2026 full-year financial outlook. This reflects the great confidence we have in our business model, the integrity of our people and operations, and our company's very bright prospectus for profitable growth and outsized value creation. Before we get into the results, I want to address directly the recent self-interested reports published by known short sellers with the intent of driving down our company's stock price.

For more than four years as a public company and over the past two and a half decades before that, we have built Sportradar to give bookmakers and fans the tools they need to engage with and wager safely on their favorite sports markets. To be clear, Sportradar and I reject the unfounded and misinformed allegations contained in the reports. As the global leader in sports technology, trusted by leagues, operators and regulators around the world, we place integrity, transparency, professionalism at the heart of everything we do. For 25 years, Sportradar has maintained regulatory licenses in jurisdictions around the world. In order to maintain the respect and trust of our stakeholders and ensure the long-term vitality of our industry, we continue to conduct our business in a manner consistent with the highest standards.

Unfortunately, these actors strive on misinformation and repackaging historical allegations to drive down company stock prices at the expense of long-term focused investors. The company takes very seriously our obligation to our stakeholders. To be clear, the company maintains a robust compliance framework with oversight from the board of directors that is designed to assist the company and its officers to navigating the complex business and regulatory landscape. This morning, we filed a 6-K that speaks to our strong compliance and KYC framework. We encourage investors to read it for additional details. Given our strong conviction in the long-term value of our business, during quarter one, we repurchased approximately $90 million shares, bringing our total repurchases since inception of the program through last week to approximately $228 million.

Also this morning, we announced that we have entered into a 250 million enhanced open market repurchase program to be executed under our previously authorized $1 billion share repurchase program. I believe the company's current valuation does not reflect the strength of our business and our long-term prospects, and I am confident in the path we are on. Accordingly, I intend to personally purchase $10 million worth of shares in Sportradar when our trading window opens. Before turning to our results, I want to take a moment to welcome Sameer Deen, who will be joining Sportradar as Chief Operating Officer on May 18th. Sameer brings extensive experience across sports betting, gaming, and digital media, including most recently from his time at Entain, where he served as Chief Commercial Officer.

The executive leadership team and I look forward to partnering with Sameer, who will be instrumental in driving our commercial efforts and optimizing our operations. Turning to our first quarter results. Sportradar delivered Q1 revenues of EUR 347 million, an 11% increase year-over-year. This was driven by strong performance in betting and gaming content, including continued strong progress monetizing IMG ARENA rights. We generated adjusted EBITDA of EUR 66 million, which translated to a margin of 19%. From a bottom line perspective, we continued to drive strong free cash flow as we expanded cash conversion to 67% in the quarter. In terms of our competitive position, we are the sports technology leader covering over 1 million matches annually.

The unique breadth of our offering powers more data and odds generation, enables us to stream more videos than our peers, and helps grow our MTS trading liquidity. It is this scale and expertise, as well as the depth of our global client base, that is enabling us to make great progress integrating the IMG rights portfolio and capitalizing on revenue synergies. Demand across our global client base has been strong with more than 75% of our core betting clients now consuming IMG content, including all tier one operators. Of our clients who were previously not customers of IMG, nearly 60% are now purchasing IMG content from us. Our partnership expansion with Hard Rock Bet to include official content from the PGA Tour and UFC is a clear example for this.

We are excited to continue unlocking incremental value through cross-selling, giving our tremendous operating leverage as we capitalize on our existing infrastructure and capabilities. From a product perspective, we have integrated IMG content into our core product suite and are now integrating it into our next gen offerings for both golf and the tennis Grand Slams. The continued strong progress and rapid integration underscore our ability to monetize sport rights across our larger global client base and product suite to deliver significant accretive revenue growth. Our increased sports coverage, combined with our product innovation and the deeper engagement this foster is helping to boost our streaming activities. Last year, we streamed over 525,000 matches globally, and in 2026 we anticipate to stream over 700,000 across our global footprint. Switching to our Managed Trading Services.

We continue to scale the business with turnover up 24% in the quarter. While turnover was strong, our revenues in the quarter were impacted by player-friendly outcomes. Trading margins should normalize over the time given the diversity of our clients and sports coverage on the platform, and we expect the business will continue to be a core growth driver for us going forward. Turning into iGaming. We recently launched PlayRadar, our dedicated iGaming brand, which will serve us as a natural extension for our core business. PlayRadar capitalizes on our unique position as well as our sports data expertise to offer hybrid products that blend the sports betting and iGaming experiences. We are doing this organically and cost-effectively using existing resources.

We are already live across Latin America, including Brazil, and over the remainder of the year, anticipate launching in a number of European markets, including the U.K., Greece, Sweden, and Denmark, as well as several U.S. states and Canada. Touching on the prediction markets in light of the evolving environment and moderating U.S. market growth. We see prediction markets as a significant opportunity, where Sportradar is uniquely positioned to lead given our premium content, global scale, and unmatched product portfolio. Prediction markets expand the U.S. TAM by opening up new states, attracting new demographies, and increasing engagement with sports. Similar to our position in online sports betting, we will power key players in the prediction market ecosystem.

Sportradar Prediction Services will provide our exclusive data products and services to exchanges, market makers, and brokers. For Sportradar, this opportunity diversifies our customer base, expands our SAM, and promotes a shift to live engagement, all of which should drive higher revenue over time. We are in an active commercial discussion with a number of prediction market players for the use of official data and products related to MLB, NHL, MLS, and UFC, amongst other global leagues and competitions. While we expect to announce agreements soon, we are being deliberate in our discussions to ensure we maximize economics given the value we will bring to this ecosystem. Turning to the remainder of the year. We see a number of drivers for our business. The FIFA World Cup in June is expected to generate significant betting turnover, which should contribute to our MTS business.

With our new visualization and with operators expecting to take advantage of the event to launch marketing campaigns, this should also contribute to our performance. Additionally, as we progress through the year, we believe we will increasingly benefit from prediction markets as we enter into agreements with exchanges, market makers, and brokers. All of this contributes to confidence in our full-year's guidance and increasing momentum in our business over the course of the year. In closing, Sportradar is well-positioned to take advantage of an evolving sports market and has momentum heading into the rest of the year. We are uniquely positioned to benefit from both online sports betting and prediction markets by leveraging our long-term rights as agreements and unmatched product portfolio.

We will continue to drive innovation across our business, uphold the highest levels of integrity and transparency while delivering increasing value to our clients, our partners, and our shareholders. The underlying fundamentals of the business remain strong, and we are confident in our growth strategy and the opportunities ahead. Thank you. I will now hand over the call to Craig, who will discuss our financial results in greater detail.

Thanks, Carsten, and thank you everyone for joining us this morning. We are a week earlier than originally anticipated, as we wanted to discuss our financial and operating results as soon as possible, so we can better capitalize on the opportunity provided by the company's current share price. Importantly, our focus remains the same: delivering durable and consistent revenue growth while leveraging a stable and predictable cost base so we can deliver significant multi-year margin expansion and what ultimately matters most, free cash flow generation. The value we are creating for our sports media technology and betting partners continues to translate into significant top-line growth. While there were some headwinds during the quarter, which I will discuss in a moment, full-year expectations remain unchanged as our expanded best-in-class content and product suite is further resonating across our existing leading global distribution network and new platform opportunities.

Looking at the first quarter, Sportradar generated revenues of EUR 347 million, an increase of EUR 35 million or 11% compared with the first quarter of 2025. Driven by the strong uptake of IMG content and the continued cross-sell and upsell of our products and solutions to existing clients, as demonstrated by our customer net retention rate of 108%. It is important to note the NRR growth excludes the utilization of IMG content by existing customers, but does include the impact of foreign currency headwinds, particularly from the U.S. dollar relative to the euro. Overall, our revenue growth in the first quarter would have been 16% on a constant currency basis, excluding the impact of FX movements.

Turning to our individual product groupings, growth was driven by our betting technology and solutions products, with revenue of EUR 288 million, increasing 15% versus the first quarter a year ago. This growth was led by a 20% increase in betting and gaming content revenues, driven by strong demand for IMG content across our client base and continued growth in both our streaming and betting engagement products, as well as odds and live data products, despite slower growth from U.S. sportsbooks. We continue to capitalize on the revenue synergies related to IMG by leveraging this content across our global scale and integrating it further into our extensive product suite. We fully anticipate exceeding the 25% synergy target we discussed last quarter.

Managed Trading Services was down slightly in the quarter as increased turnover at Managed Trading Services was offset by unfavorable sporting outcomes, most notably during February on European soccer, which we expect to normalize over the course of the year. Moving to our other product group, sports content, technology and services products delivered revenues of EUR 59 million, a decrease of 4% year-on-year, predominantly driven by reduced spending on marketing campaigns during the quarter and foreign currency headwinds, partially offset by media upsells to technology companies and increased contributions from Integrity Services as we expand our league partnerships. The growth in the quarter was once again geographically broad-based, with rest of world revenue increasing 14%, while U.S. revenue was up 4% on a reported basis.

Headwinds from foreign currency movements, and to a lesser extent, the timing of marketing campaigns, significantly impacted U.S. reported revenue, which would have increased approximately 17% on a constant currency basis. Turning to adjusted EBITDA, our continued focus on cost efficiencies, along with our stable sports right portfolio, delivered slight margin expansion in the quarter, with adjusted EBITDA of EUR 66 million, up 12% year-on-year. As anticipated, the IMG acquisition continues to be margin accretive as we scale the business and realize cost synergies in areas such as engineering, scouting, audiovisual production, and personnel. Looking at the individual cost buckets, I will be speaking to adjusted expenses to provide a breakdown of the expenses that impact adjusted EBITDA. We have detailed in the earnings release and the financial section of the earnings presentation the bridge from IFRS amounts.

This past quarter, sports rights expense increased 18% year-over-year to EUR 122 million, due primarily to the addition of IMG. As we have said previously, all of our major rights deals are locked in long-term, so we have significant visibility on sports rights costs moving forward, giving us high confidence in our ability to drive operating leverage as we capitalize on the value of our high-demand sports portfolio and the premium products we have developed for our global customer base. Adjusted personnel expenses were EUR 84 million in the quarter, up 5% year-over-year, predominantly driven by the inclusion of IMG headcount, with slower growth across our existing workforce, even as we drive new growth opportunities.

Importantly, personnel expenses continued to decline as a percentage of revenue, down 144 basis points versus last year, as we further capitalize on efficiencies provided by technology advancements and focus resources on the most profitable growth opportunities. Adjusted Purchase Services were EUR 46 million, up 5% year-on-year, primarily due to the inclusion of IMG as well as higher cloud spending. Overall, Adjusted Purchase Services declined by 84 basis points as a percentage of revenue as we further leverage our existing infrastructure. Adjusted Other Operating Expenses of EUR 28 million in the quarter were up 16% year-on-year, with the increase predominantly driven by costs related to IMG.

Overall, we continue to anticipate meaningful margin expansion over the long-term, given the inherent scale we have in our business and our long-term cost visibility, including the benefits of sports rights being amortized on a straight line basis. At the same time, we have recently initiated steps to further streamline our business and drive additional cost efficiencies. We anticipate these steps, which are expected to result in restructuring charges of between EUR 13 million-EUR 18 million during the remainder of the year, will drive additional operating leverage and optimize our organizational structure for sustained value creation.

Looking at the full P&L, we generated a net loss for the quarter of EUR 6 million, versus a profit of EUR 24 million in the first quarter a year ago, as our operating growth year-on-year was offset predominantly by unrecognized foreign currency losses of EUR 9 million, primarily associated with our U.S. Dollar denominated sports rights, versus a gain of EUR 28 million in the same period a year ago. Turning to the balance sheet, Sportradar remains in a very strong liquidity position, closing the quarter with EUR 322 million in cash and cash equivalents and no debt outstanding. In the first quarter, the company generated free cash flow of EUR 44 million, an increase of 38% from the first quarter a year ago.

We continue to convert more of each dollar of EBITDA into free cash flow, as demonstrated by free cash flow conversion rate of 67% versus 54% a year ago. Looking forward, we continue to anticipate strong free cash flow growth for the full-year and a conversion rate above last year's rate of 56%. Cash and cash equivalents declined EUR 44 million from the end of 2025, as the strong free cash flow generation was offset primarily by share repurchases of EUR 90 million during the quarter. Our priority with regards to capital allocation remains investing in the long-term growth of the company. Given the significant discount between the current share price and the fundamental strength of our business, we believe there is currently no better use of capital than investing in Sportradar shares.

Last quarter, the board approved a significant increase in our share repurchase program, raising the total plan by an additional EUR 700 million to bring the total authorization to EUR 1 billion. This quarter, under this expanded authorization, the board has approved a EUR 250 million enhanced open market repurchase program, with purchases to commence when our trading window opens and with the expected completion within approximately three months, subject to trading volumes. This reflects our conviction in the durable growth trajectory of our business and the multitude of value creation opportunities ahead. Turning to our expectations for the year, we are reaffirming our full-year 2026 outlook.

While there have been some short-term headwinds, there are also a variety of opportunities for the remainder of the year that we expect to capitalize on, such as further IMG synergies, the prediction market ecosystem, and global customer renewals. As such, we still anticipate constant currency revenue growth of 23%-25%, which at current FX rates is expected to be between EUR 1.56 billion-EUR 1.58 billion reported. We expect to drive significant operating leverage on this revenue growth with adjusted EBITDA growth of 34%-37% on a constant currency basis, which at current FX rates is expected to be EUR 390 million to EUR 400 million reported, with approximately 200 basis points-225 basis points of margin expansion in 2026.

As a reminder, we expect the strongest revenue growth to occur in the second and third quarters, given the timing of sporting events and the inclusion of IMG content. Additionally, given the weakening of the U.S. dollar throughout 2025, at current currency rates, the FX headwinds will still be significant in Q2. Overall, we are very excited about the opportunity Sportradar has moving forward. The investments we have made in content, technology and products, along with an unmatched global customer base, has us well-positioned to deliver durable revenue growth as the market expands and additional opportunities arise. At the same time, we are becoming even more efficient with our cost structure. With strong visibility regarding sports rights, we fully expect to deliver significant margin expansion and further ramp free cash flow, delivering additional value for our shareholders in the months and years ahead.

Thank you for your time this morning, and now Carsten and I will be happy to answer any questions you may have.

We will now begin the question-and-answer session. If you have a question, please press star one. If you would like to redact your question, please press star one again. Please give us a moment to organize the Q&A. Your first question comes from Ryan Sigdahl with Craig-Hallum Capital Group. Your line is open. Please go ahead.

Hey, good day, guys. Good to see positive business momentum despite some of those transitory impacts in the quarter. I wanna start with marketing services just to dig in there, 'cause that was where most of the miss was versus ours, and I think generally street expectations. Been a good growth business. It was down 9% in the quarter. Can you talk about what specifically happened in the quarter, and if there's been a structural change in spend from your operator customers, or if it was really a timing of spend? Kind of along that lines, reiterating the guidance, given that softer start to the year, what gives you confidence to reiterate that?

Sure. Thanks, Ryan. Appreciate the question. When you look at marketing services, listen, it's always been a very choppy revenue line item, right? It really depends on what operators wanna do in any given quarter, and they can shift their spending, I would say up to the last minute with regards to when they wanna spend. Sometimes they keep it in the current quarter, sometimes they push it out, and sometimes they don't spend at all. What I think happened in the first quarter is you did have some people pull back, given some of the uncertainty in the space. I think you did also had some people who were saving some of their spend heading into the World Cup, which you should see come back in the second and third quarter.

When we look at the marketing spend line for the full-year, we still expect it to deliver really nice growth. Our ads business is in really healthy shape, and we know the value that we bring to our sportsbook partners and our iGaming partners, and we see a significant opportunity to grow this line moving forward. When you think about the guidance for the full-year and what we expect, we do expect marketing services to grow, definitely more in line with what it's done historically, excluding any one-time items. Some of the other things that we look at with regards to guidance for the full-year that gives us confidence that we'll ultimately get to where we guided to at the start of the year, one would be the marketing that we just talked about.

Two would be the continued success that we're seeing with IMG and how it's resonating with our customers. The third, and probably the biggest, is we have really good sight lines right now we think with regards to some prediction market revenue opportunity that's gonna happen in the predominantly back half of the year. Those three things give us confidence that we're gonna hit our guidance for 2026.

Helpful. For my follow-up, just given the recent news flow kind of over the past handful of days here. From our standpoint, there's a big difference between licensed gray market operators and black market illegal operators. Curious if you're willing to quantify and say with confidence what your revenue mix is for operators in black illegal markets. If there would be ways for those operators to get Sportradar data without having a direct relationship with the company. Lastly with that, how you think about licensed gray market operators. Thanks. Good luck, guys.

Hi, Ryan, this is Carsten. The first point is the black market and the gray market. We do not work with black market operators. For the gray market, we have a solid compliance structure in place, and we only work with licensed operators. The measurements which we apply here is a risk assessment, and irrespective of the licensing and jurisdictions, we support only business which has a license. The team is constructed out of legal experts, compliance and risk personnel together with external advisors. We take this very, very serious, and we are running a very rigid KYC process, which I think I explain later on. Maybe we jump now to the second part of your question to define what is the pocket sitting in this gray market.

Overall, Sorry. It is a low-to mid-single-digit number, so 5%-13%. That's the range which we have. We are drilling this down from our operational business. For this, I hand over to Craig that he can give you these numbers.

Sure. Thanks, Carsten. When you think, Ryan, about ultimately our revenues, obviously, we looked to come up with those numbers at a bottoms-up approach on a client-by-client basis. Let me talk to you a little bit about what is out there from an information that you guys can see, which can frame ultimately what this exposure could be. First, you have to look at our overall revenue. When you think about our overall revenue, there's really two big buckets. You have the betting technology and solutions part of our business, and then the sports content technology and services part of our business. The sports content technology and services part of our business makes up a little over 20% of our revenues, and that is certainly non-betting related.

When you break down the other 78% of our business in the Betting Technology and Solutions products, Betting and Gaming Content and Managed Trading Services are what make up that kind of product group. Within the Betting and Gaming Content side of that, the primary exposure is from our data and odds business. The other products in this group are our fan engagement tools, which is predominantly made up of AV streaming, which is not related. Within the Managed Trading Services part of our business, the primary exposure from that is from our MTS business. When you think about kind of the pieces that I just laid out that are exposed to potential gray markets, you're really talking about the data and odds business and the MTS business.

When you add those pieces together, you're talking about somewhere in the mid 40% of our overall revenues. Out of that 40%, mid 40%, you need to exclude the U.S. revenues which are generated. When you do that, the potential exposure gets reduced to somewhere in the mid 30% range. On top of that, there's obviously some large global providers that are in there. When you remove those out of the equation, and you apply what I would say are public estimates with regards to what gray markets are, you can see that the math takes you back down to that low to mid-single-digit exposure with regards to gray markets overall.

Extremely helpful, guys. Appreciate the top down and bottoms up numbers there. Good luck, guys.

Operator, we'll take our next question.

Your next question comes from Chad Beynon with Macquarie. Your line is open. Please go ahead.

Hi, good morning. Thanks for taking my question. Slide eight was really helpful in terms of outlining the prediction market ecosystem. Craig, you talked about, you know, the guidance includes some of that ramp in the back half. Carsten, you said that there's really good conversations. Is there any other, you know, any other touch points that you can help us with just in terms of thinking about the ramp or which one of those constituents, you know, FCM, DCM or market makers is the most important and where we could see, you know, some activity in the back half? Thank you.

Hi, Chad. This is Carsten. As you know, we got the green light from NHL, UFC, MLS and MLB that we can start the marketing here, and we created services for this. There are different needs. Exchanges and market makers, they have a fundamental different need when it comes to the ultra-low-latency data and video feeds. Market makers are interested in prediction models based on deep data. How can we forecast the next couple of seconds? This is really very important for them. Very different to online sports betting operators, where you have a big importance on the result. It must be 100% right because it triggers a payout. For market makers, it stimulates liquidity in those directions. We develop products meanwhile for serving this, so that was good for us that we had some time.

If we're looking now to the exchanges, you know that we already have fan engagement tools and customer acquisition here, and we are speaking with all the players in the market. As Craig said, we are very confident that we will see very soon some bigger news and announcements around this. We think that the NBA is also thinking about prediction markets and how to enter. We are in close partnership with the NBA, as you know, and in enhanced conversations. Looking to the brokers, it's the segment where we have the customer acquisition, some visualization tools, and of course for both exchanges, we have the Integrity Services. If you look to the business model what we are running here, it's pretty similar to online sports betting.

We have a fixed fee and a revenue share with a minimum guarantee, and that's at the moment in intensive negotiations.

That's great. Thank you very much. Then with respect to AI at the Investor Day last year, you guys outlined, you know, some of the opportunities on the product development side of things. Can you talk about additional AI implementations either on the revenue-driving side or on the cost containment side, given the restructuring? Thanks.

We are on both sides. As told in the last call, the engineering is the prime part of our business. We are one of the very first companies to set KPIs for the engineers, how they use the prompt, and how they're working with it. It was leading already to a lead time reduction of 20%. We are accelerating on this. We see excellent results from an engineering perspective. Operational-wise, more and more sports will be automatized. That's simply a trend, we are doubling and tripling down to deploy AI and GenAI. Looking now into finance and legal, the opportunities are really big. There are really things where we can accelerate client contracting processes for the different regions, we are actively deploying this. We are training our people on AI, GenAI. We want them to use agentic agents.

I think that's a job every company has to do. We said we wanna be the front runner on this. Within this process, of course, we will see efficiency gains. We change structures, and we change processes in the company to the benefit of being more efficient and delivering faster and better quality. Looking to the products, micro markets, 4Sight, the Foundation Model and the Bettor Sense, our product which we developed, speaking very clearly on the deployment of GenAI and how we use this already with products. This is continuing, and we double and triple down on this trend.

Thank you.

Your next call comes from Barry Jonas with Truist. Your line is open. Please go ahead.

Hey, guys. Good morning. Just curious, since the reports came out, if you've had any discussions with league partners or gaming regulators. Curious what the interactions there have been.

Hi, Barry. Carsten here. The feedback so far is overwhelming to me. I get a lot of support from all sides, our partners, our clients, the industry, some commissioners. From a regulator perspective, we are in contact with some regulators on a very frequent basis. Some of them contacted our teams. We're explaining them the situation, and that's an ongoing process. Overall, the response was, for me, overwhelming that I got so much support and feedback on these allegations.

That's great. Then, just a follow-up question on prediction markets. You know, given some of the ongoing U.S. state-by-state legal nuances, let's say, do you expect to have any limitations on the offerings for prediction market operators? Thank you.

Asking me about this is really a tricky territory. There are so many cases ongoing. At the moment, we don't see limitations. That is something which we leave to the regulators figuring out the way here. What we can do is we are working hands-on and very quick on the best possible product to serve our partners on the prediction markets. Our partners, as you know, can be also online sports betting operators which are switching into this segment. We are fully focusing on this, and we try to deliver here the best quality product.

Thank you very much.

Your next question comes from Jeff Stantial with Stifel. Your line is open. Please go ahead.

Great. Good morning, everyone. Thanks for taking our questions. You know, maybe just starting off, you know, on the marketing business. You know, Carsten, you talked about this a little bit, but just curious to get your latest thoughts on sort of the cadence of commercialization of more of the user acquisition services to predictions. Specifically, how material was this of a growth driver in Q1? As we think about Q2 and into the back half, have you been able to further deepen relationships with the exchanges, now that they do seem to be spending on user acquisition quite aggressively? Just any sort of thoughts there on that process and how you see that playing out through the remainder of the year would be great. Thanks.

Yeah. Listen, I think as Carsten highlighted, and thanks for the question, you know, we're still very early days, right? We have done, I would say, some collaboration with the prediction markets as they ramp-up, and we continue to do work with the traditional OSBs as they continue to potentially enter that space as well as grow their existing business. I would say there's been some work in that space, but certainly not of scale compared to what is our traditional, marketing business.

That's great. Thanks, Craig. Shifting over to the reports from last week in the 6-K that you filed this morning. You talked about, you know, three types of customers, right? Direct license B2C, license B2B, non-customers but, you know, bad actors that are pirating the data illegally. That second cohort, the licensed B2B distributors, I just wanna be clear, like the low- to mid-single digits revenue exposure you talked about for unregulated, would this include B2B resellers that are selling into unregulated markets? I assume you have really no idea which markets they, you know, that do sell into, I would think no. If the answer is no, can you just help us think about sort of how material those relationships are, you know, relative to your overall revenues?

Good. Let me take the overall revenues because that might be a bit confusing before. The bridge which Craig did is I think pretty clear that the exposure here after looking into the areas of our business is roughly at 45% of our business might be subject to exposure. Craig said that the U.S. business, which is 1/3 of this, that comes from Managed Trading Services and from data and odds, these are the two components which are exposed, that 1/3 goes away, so we are sitting on 30%. From this 30%, we are looking into our client base. The vast majority of our clients do not operate in unregulated markets, take a Flutter or take an Entain or take a FanDuel.

We subtract this, and we are coming then down to a number which is low-to mid-single-digit. That's where we sit. In some cases, if you let now an AI system running through this, and of course we did simulations with public market data, that might drop into the range of a maximum of 12%. We believe it's a low-to mid-single-digit number of our total revenues which are exposed. I hope that clarifies the situation.

That is great. Thank you very much.

Your next question comes from the line of Shaun Kelley with Bank of America. Your line is open. Please go ahead.

Hi, good morning, and thank you for taking my questions. maybe just high level, like looking at the quarter and the trends here. I don't know if you gave this, but could you give us a sense of, you know, turnover sounded like it was healthy, but obviously there was an outcome driven issue on the, you know, the trading or betting side. Could you normalize for that at all and give us a sense of sort of what core might have looked at either on revenues or EBITDA had that not been the case?

Sure. When you look at our MTS business, Shaun, obviously there, it is somewhat outcome dependent. That said, given the diversity that we have in our MTS business, you tend not to see too many fluctuations in a given quarter. When you look at the growth that we delivered last year from an MTS perspective and you look at what the growth has been, I would say, relatively consistently with regard to our MTS business here over the last several years, you're gonna look for that growth to continue here as we continue to add clients, as we continue to grow the overall handle, and as we continue to do well from an efficiency perspective. I don't have any reason to believe that the historical growth rates will alleviate.

At some point, you do start to face the law of larger numbers, but the trends in the business are very positive overall, aside from the short-term outcomes.

Okay. Thanks for that, Craig. Then maybe just higher level, could we just talk about some of the puts and takes that are in the outlook, as it relates to where we stood, you know, a quarter ago? Specifically kind of referring to the cost reduction program you mentioned, and then sort of any incremental uplift for prediction markets or any sort of shift in timing on U.S. growth, just as we kind of think about, you know, where maybe some of that marketing spend might show up. Just what's kind of changed as it relates to the remainder of the back half? More specifically, is the cost reduction program factored into EBITDA? Is that incremental?

Then, you know, specifically on prediction markets, is there now a number baked in here that was, you know, either bigger or, you know, more material than what we had previously?

Sure. Let's break it down a little bit. Originally, when we gave our guidance a few months ago, there was a few things that have changed since then. First and foremost, the U.S. market growth is definitely slower than it was when we were speaking after our fourth quarter results. At that point, we also did not include anything significant from prediction markets in our results, and IMG was at a certain level. What's changed since then is certainly the U.S. market, we think is gonna grow a little bit slower than we originally anticipated. We are including more from prediction markets. Carsten talked last quarter about the fact that we think on an annual basis, prediction markets can bring tens of millions of dollars into our ultimate results.

We don't expect to generate all of that this year, but we certainly expect to generate some of that this year. IMG is continuing to perform better. We're seeing better cross-sell, we're seeing better up-sell from IMG, and that will allow us to do better than our 25% revenue synergies than we originally thought. When you layer all those things in together, you do get, I would say, revenue in the, in the range that we expected. From a margin perspective, the cost out initiatives that we're putting forth will have an impact. Obviously, we're sitting here at the middle of the year, so it's gonna have less of an impact in the first half of the year and be more of an impact in the back half of the year.

There is some savings factored in from a guidance perspective and a margin perspective in the back half of the year, and that's how I would frame it.

Perfect. Thank you so much.

Thank you.

Your next question comes from Mike Hickey with StoneX. Your line is open. Please go ahead.

Hey, Carsten, Craig. Thanks for taking our questions, guys. Just a quick follow-up on the allegations here. One piece of it was that your sales team was uploading prospects from illegal markets, sort of the best route is for everyone. Can you just specifically address that allegation, Carsten? Then I got a follow-up on PlayRadar.

Mike, can you please repeat the question? There was a dropout in my line.

Yeah, sorry about that. The part one wrinkle of the allegation was, they had interviewed or they're acting as prospects, a prospect of operators to your sales team at ICE. I think they were saying they're from illegal markets.

Okay. I got it.

That your team was receptive to that. Yeah.

Good. You're speaking about the sting campaign, which was deployed at ICE on one of our salespersons. Now you need to know ICE is a gaming show with round about 60,000 spectators. The team is fully loaded with a lot of meetings. I think we had more than 4,000 meetings on this two days or three days of ICE. This was deliberately done, and the sales guy, a relatively young sales guy, was teased into it. Of course, we did some interviews with him after this, and we know that he was taped for more than two hours. Those taping was, of course, not reflecting all his statements. That's the first point. The second and much more important one is, this is never a contract.

When a sales guy is telling something, there is a kickoff of a very intensive KYC process that has the identification, the verification, the license verification against the regulator, the verification of a corporate filing and the register which is in there. Finally, running this through sanction lists from all the available markets where we are acting, and it goes to a final review of our legal counsel before a contract is signed. This is far off from signing a contract, and this was a by-purpose stinging campaign on a relatively young sales employee at ICE. No excuse on this. Should not happen. This was far off from signing a contract or teasing somebody into doing business in illegal markets.

Okay. Thank you. That was very helpful. The next question.

Please.

Hey, Mike, we can't hear you.

Yes, apologies. The last question dropped.

Okay, operator, if we can go to the next question.

No problem. The next question is from Trey Bowers with Wells Fargo. Your line is open. Please go ahead.

Hey, guys. First question I guess would just be on the guidance. Well, two questions on the guidance. One, just given the timing of when you provided the full-year guide coming out of the fourth quarter, any thoughts about giving a specific Q2 guide this late into the quarter? It seems like potentially things really fell off pretty rapidly in March, given the timing of your guide and then ultimately the kind of the EBITDA production. For the full-year, in terms of prediction markets versus kind of traditional OSBs, are you guys seeing that these two things are related? Do you feel like the prediction markets are kind of cannibalizing your OSB business and you're gonna make up for it with the higher prediction market business? I'll stop there. Thanks

I'll answer the guidance question and then I'll turn it over to Carsten who can talk about the prediction markets versus traditional OSBs. Trey, obviously we don't guide from a quarterly basis. We didn't guide to the first quarter, and we're certainly not gonna guide to the second quarter. What I would say is when you look at what happened in the first quarter, the biggest change from when we guided to ultimately when we reported was the, I would say, softness on the marketing line, as well as some of the continued softness on the U.S. market, being greater than we anticipated. Those two things obviously now are already baked into our results, and when you think about our guidance for the year, we're factoring those in.

Certainly we expect to deliver really nice growth during the second quarter from both a revenue perspective, but also from a bottom line perspective.

Good. Taking the second part with the cannibalization. Well, first, we see that now more people have the opportunity to place their opinion, if I phrase it in this way, on a prediction market in California or in Texas or in Florida. That is a big population which can now get an opinion on a sport event and monetize on this. That is principally an expansion of the TAM. We might also discuss there is a TAM expansion because the age is dropping to 18. That's at the moment what we see. We see that this additional market access is by far outpacing whatever cannibalization effect is in there. What I can tell you from talks with the CEOs of our clients is that the cannibalization is pretty small here.

Looking to this, we see an outpacing TAM, we see an expansion opportunity for us, and this is something which excites us.

If I could just follow-up. Included in these reports we saw last week is the idea that all of the profits of the company are generated from kind of Tier 3 and 4 leagues that are arguably, you know, more rife with kind of integrity issues. Could you guys just speak to that? Are the primary leagues still major profit centers and is that a founded accusation? Thank you

Yes, of course, it's an unfounded accusation. Looking into our partners in the leagues where we monetize, 30% of our complete revenue streams is AV. Predominantly AV is dedicated to the tier one leagues. Our rights investment which we have there, the partnerships and the products which we develop. By the way, AV is, in this allocation, I think in no way disputed, so we have a geo ring-fencing on this. Our partners are telling us where we can play out AV streams and how we can play out those AV streams. It's in no way that the majority of our revenues and profits are tied to this. This is a purely unfounded allegation.

Thanks, guys.

Your next question comes from Robin Farley with UBS. Your line is open. Please go ahead.

Great. Thanks. Just on prediction markets commentary, I wanted to clarify, you mentioned you expect some revenue now in the second half, but would the timing of an announcement be before then? Just it sounded like the discussions are a little more near-term than that. Then just to understand whether or how much that could add to guidance. It sounds like, maybe since the last quarter's call, even though your full-year guidance is unchanged, that there maybe is some prediction market revenue now in that guidance. Just trying to get a sense of when we see announcements, would certain leagues be additive to your current guidance levels? Just kind of so we can think about what that could mean when we see that announcement. Thanks

Well, without putting too much speculation out, and hi, Robin. The talks which we have with all the players in the prediction markets are pretty intense. We are doing this now since a couple of weeks. We are very optimistic that we soon have something to announce, which is for us important that we have the right framework in place with the players. The same goes for the market makers, one somehow needs the other. That's the debates which we currently do with many parties in this space. Of course, we are also in discussions with our partners from the league side, which are deploying the official data. This goes on now for a couple of weeks, like I said. We think that the discussions are on a very mature stage.

There is nothing to announce now, but we believe soon we can announce something.

Yeah.

I went over maybe to the impact to you, Craig.

Yeah, Robin Farley, what I would add in terms of the magnitude of the impact really depends on what ultimately gets done. Carsten, you know, referenced that we're talking to a variety of players from, you know, all facets of the prediction market ecosystem, whether it be the brokers, whether it be the exchanges, whether it be the market makers. If anything that happens in the, what I would say short-term, gets announced, you can pretty much assume that that was included in our estimates for the year. Anything that gets done a little bit later, you can assume is additive on top of that because we're only including in stuff that we feel pretty confident will get done here in the short-term.

Okay, great. That's very helpful. Thanks. Then just a follow-up question on the results. If you could just help us quantify, you know, it sounds like the revenue's aligned with expectations from a, from a content currency perspective, but, you know, typically your EBITDA grows more than your revenue growth, you know, sizably more. Can you just quantify in any way, you know, how much was maybe sport outcomes, how much was FX, and then if there's, you know, anything else you'd call out that you know, for that difference in this quarter, and then including, I don't know if you said sports rights increase excluding IMG. Okay, thanks.

Yeah, listen, I think we broke it down a little bit earlier. What I would say is if you look at the revenue growth in the quarter, you know, we delivered 11% revenue growth. We indicated that the FX impact to that would've been closer to 16% had it not been for FX, I think that was the biggest, I would call, headwind during the quarter. A lot of that does fall down to the bottom-line. The EBITDA growth would have been certainly larger without the FX. Other than that, you know, the components that we talked about in the quarter, you know, we delivered margin expansion in the quarter despite the revenue coming in a little lower than we traditionally have delivered, and I think that speaks to our ability to control costs and our ability to manage our business as revenues fluctuate up or down.

Okay, great. I will follow-up with you offline. Thank you.

Our next question comes from the line of Samuel Nielsen with JPMorgan. Your line is open. Please go ahead.

Hi, good morning. Thanks for taking my question. just following up on that last point of the five-point FX headwind in the quarter. If I recall correctly from your last call, one Q is expected to be the largest headwind for the year. how should we kind of think about, you know, the cadence of these FX headwinds as we go through the balance of the year?

For the most part, it should shake itself out after the second quarter. If you look at what happened with the FX rates in 2025, the U.S. dollar weakened throughout the year. Certainly in the third and fourth quarter, you're lapping an already weak U.S. dollar. In the first and second quarter, you are not. The impact in the second quarter should not be as great as it was in the first quarter, but it still should be material with regards to the growth rate overall.

Thanks. Makes sense. Following up on the prediction markets topic and maybe looking kind of broader picture, obviously it's early, but wondering if you kind of see a bigger revenue opportunity for Sportradar in the data and betting segment or within the advertising segment at maturity.

The clear answer is we see it in both segments. In the advertising segment, those guys are sitting quite on some funds that they wanna grab market shares. That's a good thing for a provider like us. Same goes now on the downside pressure for online sports betting. We expect for the World Cup a material uplift on marketing and investments in this. That's a good opportunity for us. There is a big opportunity on the data and especially on the ultra-low latency data, server co-location, et cetera, PP, which we are actively following up with the operators.

Okay. Thank you very much.

Operator, we have time for one more question.

Okay. Your last question comes from the line of Clark Lampen with BTIG. Your line is open. Please go ahead.

Thanks for taking the question. I've got two follow-ups, if I may. Maybe going back to, you know, I guess third question on some of the KYC detail that you put out this morning, which was very helpful. Thank you guys for doing that. I think in one of the passages you talked about enforcement and verification responsibility essentially being placed on the intermediary. Is it right to think that, you know, if there's a negative event that I guess impacts revenue for some portion of the 3%-12% that you dimensionalized before, is the recourse ultimately with the B2B partner and not really with Radar? Is it right to sort of think about it in that context? Craig, just I guess another guidance question. You talked about global customer renewals.

Could you give us a sense for when you'll start to, you know, begin the renegotiation or renewal process with some of your partners and whether there's anything baked into guidance for this year in terms of upticks? Thank you.

I will go on the first part, Clark. Let me use another company sample here. We all know Bloomberg. Bloomberg is working predominantly on the terminals with hedge funds and banks. That's the business model, the data is delivered there, also some of the products. That's a B2B business. Some of those partners are sub-licensing the content. They apply a KYC, same like we apply it with highest market standards. It can be always happening to Bloomberg, but also to us, that some of this content is stolen. I explain to you later on how this is done. It happens to everybody who is in this space, and you have to have methods and mitigation methods in place how you figure this out.

What is a fact is that the regulators are scrutinizing the operators. In the Bloomberg sample, the banks. If there is a bank which is failing or a fund which is failing, it is not Bloomberg, it is the banks. Looking now to our split, the B2C is something where we apply the intensive KYC. That's what we also do with B2B operators. The B2B operators, in our case, they have some syndications, and sometimes we are not aware of this. Some of them might also act without our agreement on this one, and we have this. As soon as we see this, we shut it down. There was one case in 2023 where an operator was exposing in Iran some content. We got aware of this, we shutted it down immediately.

This is now used, old allegations, to put us in discredit and to somehow work into the direction that they have a financial profit. That is the scheme which we have in place, and we indeed have piracy. Sportradar is what probably most of the most attacked company when it comes to sport data and piracy. Our data is scraped, is redistributed without our knowledge. Our IDs and the client IDs can be re-engineered. The very important fact here is we speak predominantly, round about 90% of this content where there is a Java code on a webpage, about live match trackers. I don't know if everybody knows what it is, but this is a live score for a sport. That's it. It's not a betting functionality, it's an information tool about the score.

A league table, live score which is in there, or a half time score or a full time score. That is what the tracker is transporting. I hope I answered the first part of your question.

Yeah, thanks. With regards to the second part of your question, listen, I think the global customer renewals is actually something that happens on a regular course of business for us. When you think about our company, about 2/3 of our revenue are fixed fee and 1/3 are variable. Out of the 2/3 that are fixed, traditionally about 1/3 comes up every single year, and that's not obviously on January 1st, it comes up throughout the course of the year. We have some renewals here that are coming up throughout the rest of the year that we think that there's some additional opportunities for, which could help us get additional revenue and capture additional share of wallet from some of our customers as we deliver them more value.

That is ultimately some of the upside that we see in the back half of the year as well.

That ends our first quarter call.

Very helpful. Thank you, guys.

That ends our first quarter call. Thank you, everyone. Now I'll turn it back over to the Operator.

This concludes today's call. Thank you for attending. I will now turn the call back to Jim for closing remarks.

Operator, that's it. No closing remarks. We'll end the call. Thank you.

Perfect. You may now disconnect. Thank you for attending.

Ladies and gentlemen, thank you for joining us, and welcome to Sportradar Group AG's fourth quarter earnings call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to James Bombassei, Senior Vice President of Investor Relations and Corporate Finance. Please go ahead.

Thank you, Operator. Hello everyone, thank you for joining us for Sportradar Group AG's earnings call for the fourth quarter and full year of 2025. Please note that the slides we will reference during this presentation can be accessed via the webcast on our website at investors.sportradar.com and will be posted on our website at the conclusion of this call. A replay of today's call will also be available on our website. After our prepared remarks, we will open the call to questions from analysts and investors. In the interest of time, please limit yourself to one question and one follow-up. Please note that some of the information you will hear during our discussion today will consist of forward-looking statements, including, without limitation, those regarding revenue and future business outlook. These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast. For more information, please refer to the risk factors discussed in our Annual Report on Form 20-F and Form 6-K filed with the SEC along with the associated earnings release. We assume no obligation to update any forward-looking statements or information which speak as of their respective dates. During today's call, we will present IFRS and non-IFRS financial measures and operating metrics. Additional disclosures regarding these measures and metrics, including a reconciliation of IFRS to non-IFRS measures, are included in the earnings release, supplemental slides and our filings with the SEC, each of which is posted to our investor relations website. We may also discuss certain forward-looking non-IFRS financial measures that cannot be reconciled from the most directly comparable IFRS financial measure without unreasonable efforts. Joining me today are Carsten Koerl, our CEO, and Craig Felenstein, our CFO. I will now turn the call over to Carsten.

Good morning everyone, thank you for joining us today. In 2025, we delivered strong financial results while generating continued momentum across our business as we took important steps to further scale our business and enhance our industry-leading position. This progress builds on the strong results we have delivered over the last several years and sets us up for sustained long-term success. Early in 2025 at our Investor Day, we outlined our strategy and key growth pillars. Over the course of 2025, we delivered on this strategy, both operationally and financially, as we scaled the business in key areas, including our sports coverage, video streaming and visualizations, Managed Trading Services, and our marketing and media businesses. We also completed our acquisition of IMG, demonstrating our financial discipline as well as our ability to integrate strategic sport rights and monetize them like no one else can, given our experience and scale. Importantly, this operational success underpinned our strong financial performance for the year. Craig will cover our financial results in a moment, but in 2025 we performed ahead of the expectations we laid out at our Investor Day early in the year, achieving record revenue and Adjusted EBITDA while delivering significant margin expansion. Adjusted EBITDA margins have expanded approximately 400 basis points in the past 2 years, and we see a long runway ahead for further expansion. We also continued to deliver increasing levels of free cash flow as we expand the free cash flow conversion to 56% on an annual basis. This cash flow further strengthened our balance sheet, and given the disconnect between our share price and the fundamental strength of our business, we used the opportunity to buy back a significant amount of stock over the last 4 months. To continue to capitalize on this disconnect, our board of directors has approved a significant increase in our share repurchase authorization, raising the total planned capacity from $300 million to a total of $1 billion. With this expanded authorization, we will continue to aggressively repurchase shares as the market provides an opportunity given the long-term value creation we see across our business. We have the balance sheet strengths and free cash flow generation to take advantage of the current valuation gap without compromising our ability to invest in further growth initiatives. Turning to our key highlights in 2025. We closed the IMG acquisition in November. Thanks to our detailed pre-closing planning, we hit the ground running, immediately making IMG content available to our client base, enabling us to unlock significant revenue synergies. Leveraging our global scale and distribution network across hundreds of operators, we generated immediate financial uplift in the quarter. The customer response has been strong with the majority of our clients, including all of the tier one partners, having already signed on the IMG data odds and AV products. This early and significant progress puts us firmly on track to unlock anticipated revenue synergies of 25% for IMG in 2026. On the product side, we have successfully integrated IMG content into our core product suite and are on track to expand it into our next-gen offerings, including Foresight, Micro Markets, Player Props, and the Virtual Live Match Tracker over the course of the year. This rapid integration and uptake validates our flywheel. We can monetize this content across more customers and products to unlock significant accretive revenue growth. In terms of our sports coverage, we are unmatched in quality and depth. We cover more than 1 million matches annually, and the scale of betting content and data powers more odds generation, helps scale our video streams, and grows our MTS trading liquidity. In addition to acquiring over 70 sport rights in the IMG acquisition during 2025, we also renewed our partnership with MLB, which provides for both expanded territories and media rights. The first season of our new MLB deal performed strongly, tracking ahead of plan. We recently strengthened our soccer rights by successfully renewing IMG's German DFB Cup rights through 2032. We also continue to make great strides engaging sport fans. We lead the shift toward more personalized and interactive experience. We know sport fans and their behavior better than anybody, thanks to our unique data points that we collect. We are continually looking for new ways to engage them and enhance their experience. That is why we recently upgraded our Foresight streaming product to deliver deeper storytelling and contextual data-rich visualizations. Last quarter, we talked about one of the most exciting recent AI breakthroughs, the development of a generative foundation model for basketball, a first of its kind in sports. The model is based on a large transformer architecture which trained using billions of 3D body pose data points from thousands of NBA games, allowing the model to understand player movements, decision-making, and game flow at an unprecedented level of detail. This foundation model powers predictive insights in real time. We are using it to enhance our Foresight streaming product, bringing richer, more interactive visualizations to live broadcasts. We have plans to expand this foundation model to additional sports, including in soccer for the World Cup and tennis later this year. These innovations and the deeper engagement these products foster, combined with our increased sport coverage, are boosting our streaming activity. Last year, we streamed over 525,000 matches, which is 100,000 more than we streamed just two years ago. In 2026, we anticipate streaming over 700,000 matches across our global footprint. Switching to our Managed Trading Services, we continue to scale this business in related markets around the globe, and we see continued strong momentum ahead. Turnover for 2025 was up 26% year-over-year to $52 billion, making us a top bookmaker globally. Our proven AI-driven trading and risk management capabilities, combined with the diversity of sports on our MTS platform, enabled us to achieve a margin of nearly 11% for our clients in 2025. Turning to our media and marketing segment, our ads business delivered strong record volumes on our DSP for both the fourth quarter and the full year. In 2025, DSP volume grew 35% year-over-year, reflecting increased demand for our data-driven advertising solutions. We saw robust performance across multiple channels, which underscores both the strong ROI of our campaigns and the scalability of our platform based on our proprietary software development. At our global media business, we continue to see strong demand as sports viewership transitions from linear to digital and mobile streaming. Last quarter, we announced a partnership with NBC to develop a customized version of Foresight for NBA Basketball for Peacock's Performance Fuel. This product has drawn rave reviews from sports fans, giving them real-time stats that break down the game, including where a player is most likely to score from next. We recently announced a partnership with NBC Sports Regional Networks to enhance their fan NBA viewing experience. By leveraging our AI capabilities, we are transforming live NBA player tracking data into on-air graphics, animated replays, and customized analytics to enhance the live game coverage and experience. GenAI companies are turning to our data and media APIs to power their sports experiences. We have secured agreements with a number of the GenAI leaders to provide their users with deeper insights and real-time updates. As these platforms increasingly look to engage their audiences by integrating live sports data and insights, demand for our content and capabilities continues to grow. Turning to prediction markets. This is a rapidly developing opportunity in the U.S. and one where we are uniquely positioned to capitalize as the B2B leader in our industry with our premium sports rights portfolio and unmatched product suite. The prediction markets expand to Sports Stem by opening up the U.S. market and are a naturally high-growth extension for our core business. Our focus is to monetize this opportunity while delivering the accuracy, integrity, and scale that exchanges and market makers need to grow responsibly. We have been working with the NHL, MLS, UFC and other league partners to establish clear safeguards and standards that we will look to implement as part of any sport prediction market agreement. We are uniquely positioned to unlock meaningful commercial value. We have the ability to power this market end-to-end with our low latency official data, AI-driven technology to predict pricing and liquidity, fan engagement solutions, marketing services, and our industry-leading integrity services. We are already seeing strong demand from our marketing services from both major exchanges and our OSB clients as they look to us to help them to acquire customers. Prediction markets are an exciting new avenue of growth for our company, and we are currently in detailed commercial discussions with the key players and expect to announce more on this front soon. Now looking into 2026, we see continued strong momentum in our business as we execute on our growth strategy and as we leverage IMG's content across our larger customer base and broader product suite to realize significant revenue synergies. The 2026 FIFA World Cup in June will be a meaningful opportunity for the betting industry and for our company. There are nearly double the teams compared to the last World Cup and over 100 matches. With 200 live markets, 200 pre-match markets, as well as Player Props and Micro Markets, volumes should easily exceed $35 billion of turnover in the last World Cup. With new avenues for growth emerging, including prediction markets, we expect to continue to generate robust growth in 2026 and continue to deliver on our long-term growth strategy and guidance. We are relentless about creating value for our partners and customers, and the uptake of our product and services is a clear demonstration that our investment in content, technology, and product innovation are paying off. Our unique position as a supplier and innovator is unmatched, and we could not be more excited about the future. Thank you. I will now turn the call over to Craig, who will discuss our financial results in greater detail.

Thanks, Carsten. Thank you everyone for joining us this morning. The strong financial results and operating momentum Sportradar Group AG generated throughout 2025 once again demonstrates the demand for the robust content and product portfolio we have built as we leverage it across an unmatched global customer base. The value we are creating for our sports, media, technology, and betting partners is translating into sustained top-line growth. Given our stable and predictable cost base, we are delivering significant margin expansion and cash flow generation. The opportunistic acquisition of IMG has further strengthened our competitive position, and in the two months following close, we have already begun delivering real revenue and cost synergies related to this content. I will provide additional color on these synergies later in my remarks, but before I focus on the fourth quarter performance, it is important to recognize the meaningful value that Sportradar Group AG created this past year. Total company revenue for the full year of $1.3 billion increased $183 million or 17% compared with 2024, driven in large part by higher uptake from our existing partners, strong U.S. market growth, record Managed Trading Services turnover, and contributions related to IMG content. Our growth was broad-based with strength across our product portfolio, including betting and gaming content, Managed Trading Services, and our marketing and media services business. We generated strong gains both in the U.S. and globally with the U.S. up 23% year-on-year, now 25% of our total revenue, and the rest of the world up 15%. Importantly, the steps we have taken to align our cost base with the revenue opportunities are enabling us to deliver significant operating leverage. Record Adjusted EBITDA of $297 million for the year increased $74 million or 33% compared with a year ago. The company increased full year Adjusted EBITDA margins by over 290 basis points to 23%. The revenue margin expansion and cash flow we have generated this year puts us ahead of our year-one expectations with regards to the three-year targets we laid out at Investor Day. We expect to build on this momentum in 2026. Turning to the fourth quarter, Sportradar Group AG generated revenues of $369 million, an increase of $62 million or 20% compared with the fourth quarter a year ago, as we continue to outperform market growth by deepening our client relationships through cross-selling and upselling, as demonstrated by our customer net retention rate of 109%, which excludes the contributions from IMG. As we have discussed previously, foreign currency movements, most notably due to the U.S. dollar relative to the euro, continue to be a headwind, and revenue growth in the fourth quarter would have been approximately 22% on a constant currency basis. Looking at the individual product groupings, growth in the quarter was principally driven by our betting technology and solutions products with revenue of $305 million growing 24% versus the fourth quarter a year ago. The increase was driven primarily by 29% growth in betting and gaming content, including strong growth in both our streaming and betting engagement products, as well as odds and live data products, which saw growth from existing and new customers. With regards to IMG, we are already delivering on a variety of revenue synergies with a significant number of Sportradar Group AG customers consuming IMG content, integration of IMG content into Sportradar Group AG's broader product suite, and the sale of additional Sportradar Group AG content to IMG customers. Managed betting services grew 5% in the fourth quarter, led by the sustained momentum in Managed Trading Services, with higher volumes from our existing customer base, partially offset by lower platform revenues due to one-time installation fees a year ago. Moving to our other product group, sports content, technology and services delivered revenues of $63 million, increasing 5% year-over-year, led by a 13% increase in marketing and media services, primarily from increased uptake from technology and media companies, and from contributions related to our expanded affiliate marketing capabilities. Sports performance declined year-over-year in the quarter, primarily due to the timing of revenue, with full-year sports performance revenue growth accelerating to 8%. Similar to the full year, our growth in the quarter was geographically broad-based, with U.S. revenue up 11%, and rest of world revenue up 23%. Headwinds from foreign currency movements, and to a lesser extent, the timing of sports performance revenues, significantly impacted U.S. reported revenue. On a constant currency basis, U.S. revenue growth in the fourth quarter would have been approximately 18%. The strong revenue growth translated into significant Adjusted EBITDA growth in the fourth quarter, with Adjusted EBITDA of $89 million, increasing 48% year-on-year. Our continued focus on cost efficiencies, combined with our stable sports rights costs, enabled us to deliver significant operating leverage with our Adjusted EBITDA margin expanding approximately 450 basis points to 24.2%. Please note that as anticipated, the acquisition of IMG was margin accretive for both the quarter and year, and we have already begun to realize some of the cost synergies identified as part of the transaction, including efficiencies in scouting, audio-visual production, and general corporate overhead. Looking at the individual cost buckets, I will be speaking to adjusted expenses to provide a breakdown of the expenses that impact Adjusted EBITDA. We have detailed in the earnings release and the financial section of the earnings presentation the bridge from IFRS amounts. This past quarter, sports rights expense increased 18% year-over-year to $122 million, due primarily to the addition of the IMG premium rights and the continued success of ATP. We will remain disciplined and strategic with regard to any additional rights we acquire, and with all of our major rights deals locked in long term, we have significant visibility on sports rights costs moving forward. This visibility gives us confidence in our ability to drive operating leverage across our sports portfolio as we capitalize on the value of our high demand sports content and the premium products we have developed for our global customer base. Adjusted personnel expenses were $79 million in the quarter, up 9% year-over-year, driven primarily by IMG costs and to a lesser extent, increased headcount to support growth opportunities. We did benefit during the quarter from a lower bonus accrual versus a year ago. Importantly, our adjusted personnel expenses continued to decline as a percentage of revenue, down over 220 basis points versus last year as we closely manage headcount, focusing talent and resources on the most profitable growth opportunities. Adjusted purchase services of $45 million in the quarter increased only 2% versus last year, driven by higher cloud and traffic costs. Overall, adjusted purchase services declined by over 220 basis points as a percentage of revenue as we further leverage our existing infrastructure. Adjusted other operating expenses of $34 million in the quarter were up 25%, primarily due to costs associated with the Brazilian market and IMG. Overall, we achieved significant operating leverage in 2025, and we continue to see meaningful opportunity to deliver sustained margin expansion over the long term, given the inherent scale we have in our business and our long-term cost visibility. As we drive further revenue opportunities, including scaling IMG, we will continue to closely manage our cost structure and realize the benefits of sports rights being amortized on a straight-line basis over the life of these contracts, delivering more of every dollar of revenue to our bottom line. Looking at the full P&L, we generated a profit for the quarter of $4 million versus a loss of $1 million in the same period a year ago, driven by strong operating results as well as a $35 million lower unrealized foreign currency loss primarily associated with our U.S. dollar-denominated sports rights. The current quarter also included an income tax benefit of $6 million as compared to $20 million last year, driven primarily by the recognition of deferred tax assets as well as M&A and non-routine litigation costs this quarter. Turning to the balance sheet, we continue to be in a strong liquidity position, closing the quarter with $365 million in cash and cash equivalents and no debt outstanding. For the full year, we generated free cash flow of $167 million or a free cash flow conversion rate of 56% compared to free cash flow of $118 million or a 53% conversion rate in 2024. The increase in free cash flow was driven by strong operating cash flow, partially offset by higher sports rights payments. Cash and cash equivalents increased $17 million since the end of 2024 as the strong free cash flow generation was partially offset primarily by share repurchases, including $91 million under our share repurchase plan, with $25 million acquired during the fourth quarter. As Carsten mentioned, given the disconnect between our share price and the fundamental strength of our business, we continue to opportunistically repurchase shares and have already acquired an additional $60 million of stock in the first two months of 2026. Given the continued discount we see in our shares, the significant momentum in the business, and the value we are creating, the board has approved another significant increase in our share repurchase program, raising the total plan by an additional $700 million to bring the total authorization to $1 billion. In total, we have already purchased over $170 million of stock, leaving approximately $830 million remaining under the plan. Turning to our expectations for the year, given the sustained operating momentum we are seeing across our business and the significant synergies we are generating related to IMG, we anticipate an acceleration in growth in 2026. As we initially indicated on last quarter's earnings call, for the full year 2026, we anticipate total company revenue growth to be in the range of 23%-25% on a constant currency basis as we outperform the global market and further capitalize on our content portfolio and product suite, including further scaling the opportunity that IMG provides. Foreign currency will be a headwind at current rates. As a result, we anticipate revenue of $1.56 billion-$1.58 billion. We anticipate delivering significant operating leverage on this revenue growth and forecast Adjusted EBITDA growth to be in the range of 34%-37% on a constant currency basis. After factoring in foreign currency headwinds, we anticipate Adjusted EBITDA of $390 million-$400 million and approximately 200-225 basis points of margin expansion in 2026. At the same time, we will continue to focus on converting more of every dollar to cash flow and anticipate growing our free cash flow conversion rate above the 56% we delivered in 2025. Please note that given the timing of sporting events, including IMG content, we anticipate the strongest revenue growth in the second and third quarters of this year. Additionally, given the weakening of the U.S. dollar throughout 2025, at current currency rates, the FX headwinds will be most significant in the first quarter and, to a lesser extent, the second quarter. Overall, the integration of IMG and the investments we are making in our products and technology positions us to capture additional opportunities in an expanding global market. We are confident in our ability to deliver durable revenue growth. With a cost structure that has strong visibility and inherent operating leverage, we will continue to ramp free cash flow generation and build shareholder value moving forward. Thank you for your time this morning. Now Carsten and I will be happy to answer any questions you may have.

We will now open for questions. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed in to today's call, please press star nine on your telephone keypad to raise your hand and star six to unmute. As a kind reminder, please remove yourself from speakerphone and lift your handset when asking a question. Please ensure you are unmuted locally when you are asking your question. Please stand by while we compile the Q&A roster. Your first question comes from the line of Ryan Sigdahl with Craig-Hallum Capital Group. Your line is open. Please go ahead.

Good day, Carsten, Craig. Congrats on the strong business momentum and financials. I want to start with IMG ARENA. It has now been four months since the close of Endeavor's gift of that rights portfolio to you, plus some cash. I know you mentioned trending ahead of the medium-term financial targets. I am curious if that is IMG that is contributing to that or the core business. Then you also mentioned strong synergy realization thus far, but I am curious if you can elaborate on specifically how those customer conversations are going, if there is anything positive or negative, anything you have learned now that the deal is closed.

Hi, Ryan. Carsten here. I like this term of gift. Well, there is hard work in the gift. We have a very capable team on this, and we are working now since many months. This work is paying off, so we hit the ground running. All the tier one operators are now converted to this content. Let me remind you, the scheme here is that we get content, we put this content into our engine, and this engine has a much broader distribution. Comparing it from IMG from 50, 60 operators to us with 600 operators or 800, if we extend that scope. We have products based on this content. Most of those products had not been able, or IMG was not able, to distribute them: Managed Trading Services, visualization products, et cetera, PP. We see a strong pickup here. We are trending a little bit better than the plan, and our main focus here is the revenue synergies. We measure the revenue synergies: how much can we achieve here by this bigger engine and the more products? That is the second part of your question. We are a little bit ahead of the target. The target is 25%, and we gave the number of $140 million already earlier, which includes that 25% revenue synergies. I hope that answers your question.

Helpful. Second question, it would not be a conference call if prediction markets was not asked about. Chairman Selig is certainly out defending the CFTC's authority over predictive markets. You have your big customers, DraftKings and FanDuel, that are aggressively entering here. You have MLS, NHL doing marketing deals. My question is, you have done very well on the integrity side of signing deals thus far. I am curious what you need to happen and the next steps to get more direct partnerships on the data side for you in the prediction markets.

I just lost my bet, Ryan, with Craig. The bet was this is the first question for today with prediction markets. Craig has something good on my side. Look, we are working here on a clear scheme. We always said the two things which are most important are player protection and the integrity of the sports. For the integrity of the sports, like you said, we made good progress. You saw also lately our FIFA announcement that we cover now all the federations and confederations there. We are very proud of what we established with the integrity service, and all of this is AI-based, but we have now knowledge of more than 15 years in a very complex environment here. Of course, we are happy to contribute with our knowledge to make the sport safer and also with the prediction markets to install safeguards which are requested and demanded by sports. From a player protection side, we cannot do this. That is about underage gaming, money laundering, insider trading, all these topics which are relevant and important. Sport is caring about this, and we have now three of our partners, NHL, Major League Soccer, and UFC, which established a framework with the exchanges. That enables us from the next couple of weeks onwards that we can supply the official data, and that is our scheme. If our partners find a satisfying framework for player protection and integrity, where we happily contribute, we are ready to deploy the official data. If we are looking now a little bit deeper here, there are two things. There is the exchange, and there is the market maker. Maybe I get another question about the market makers, where I am happy to go a little bit deeper, but that is the general scheme to answer your question.

Thanks, Carsten. Good luck, guys.

Thank you, Ryan.

Thanks.

Your next question comes from the line of Chad C. Beynon with Macquarie Capital. Your line is open. Please go ahead.

Chad, we cannot hear you if you are speaking.

As a kind reminder, please press star six on your telephone keypad to unmute.

Operator, why do we not go to our next question, and we will circle back to Chad.

Can you hear me now?

Yes, we have you. Yes.

Sorry about that. Hit the star six. Just thinking about the guidance for 2026, it is kind of what you laid out last quarter. You know, some small moves in the fourth quarter with betting technology and solutions versus the sports content. As we think about the guide for this year versus how you were thinking about this before, given what we have heard from some of your partners out there, has there been any changes given some of the reduction in volume that we have seen out there and differences in hold rates, just as you think of the makeup of how you get to that revenue guidance? Thank you.

Sure. Thanks, Chad. There really has not been a change from what we talked about when we reported our third quarter results in early November. Really, the only significant change—I would not even call it significant, but the only change that has happened—is that the U.S. dollar has weakened further versus the euro over the last several months. Because of that, the reported numbers get hit a little bit from a guidance perspective. In terms of the business itself, the business continues to operate exactly as we had planned when we reported our results in the third quarter.

Okay, great. Secondly, just shifting to iGaming opportunities this year, that seems to remain a bright spot for everybody. Can you just update us in terms of your approach to growing that business and how that looks as we look throughout the year? Thank you.

Carsten here. From an iGaming perspective, like we laid out, we chose Brazil as our test market. The thesis here is: how can we connect live betting and live betting activities and iGaming? We believe this is a huge playing field and a big opportunity for us. In live betting, we know about the latency, we know about who is sitting on the other side because we have our iPlayer installed on more than 600 betting sites. Nothing is easier than this: to match now the live content on the iPlayer together with something which is visualizing the iGaming opportunity. Let us make this very simple. Our new partner, PGA, we had our board meeting there last week, we discussed solutions like it was in TPC Sawgrass. If you are a golfer, you know hole number 17. Put a hexagon grid over this hole number 17, you have 36 fields, make the flag the green button, then you can visually overlay to the live broadcast this iGaming opportunity. This is something which we promoted the first time in Barcelona ICE. That is the biggest gaming show. The pickup was enormous on this. This is exactly the opportunity which we pick because we see we have the distribution, we have the iPlayer, we have the live scores, we have the match trackers on the bookmaker side, and we can connect this and convert. Like we all know and like we see it in the handle numbers, a client gets roughly around 4 times the value for an iGaming player comparing it to a sports bettor. Sports betting is used as the acquisition channel, and here it closes to the 360 degree because we hook it up with our ads for the acquisition. That is the scale.

Very helpful. Thanks, Carsten. Appreciate it.

Thank you.

Your next question comes from the line of Shaun Kelley with Bank of America. A kind reminder to unmute yourself locally. If you have dialed in, please press star six to unmute. Your line is open. Please go ahead.

Hey, everyone. Can you hear me okay?

Yes.

Yes.

Great. Really appreciate it. Carsten, you gave a little bit of a teaser around the prediction market piece. Maybe to go a little deeper, I think as we think about the different opportunities here, we think about a broker layer, an exchange layer, as you alluded to, and a market maker layer. Having had a few months to work on it and starting to talk to partnerships or partners in this space, could you talk to us a little bit more clearly about how you would maybe see or envision Sportradar Group AG participating at each of those three layers? I think that would be really helpful for everyone. Thanks.

Hi, Shaun. Carsten here. The real interesting thing is the live development in that sector. In-play parlays, live opportunities, that needs real-time data. Like we all know, this is where we can monetize best with the real-time data. The market maker segment is specifically interesting because they need real-time data to price this, and they need the models to lay the liquidity there. Even more, and the real goal is, can we predict the next movement better than anybody else? We can because we are sitting on this huge knowledge, we are sitting on the liquidity, and we are sitting on the deep data in real time. Our investment here, for example, in the foundation model, where we can predict the next pixel, and we do this now seven seconds for an NBA match, is super helpful to predict potential moves and to underlie them with liquidity. That is exactly where the sweet spot sits. As you hear, that makes us very optimistic that we can help the market makers with a very superior product. At the moment, we are ready to click the button that we can distribute the live data for doing the settlement. We can do this for the exchanges. Of course, we can do this also with the deeper data for the market makers. For both, we are aiming to strike a revenue share model based on the take rate. We have at the moment the negotiations around the three properties where we got the clearing from the leagues. That is NHL, Major League Soccer, and UFC. Like I said, you will very soon hear about some deals in that space.

Super encouraging. If I could, as my follow-up, there was a big NBA event hosted on the front end of the All-Star Game weekend, and obviously they are a huge partner of yours, and I think you were there as well as a bunch of other people. Any key takeaways, because it was quite interesting that a couple of the prediction market platforms were present at that, and we are curious on what was the league's message back to you or to other constituents as it relates to technology developments, because it sounds like it was quite interesting? Thanks.

Yes. I heard from this panel with eight players, and only Swiss guy on the panel was trying to moderate the temper, which heated up a little bit on the panel. I think it shows how big the opportunity is. I think the whole panel, which was Kalshi, Polymarket, the founders, we had, of course, FanDuel and DraftKings sitting on there, and BetMGM. The whole panel was agreeing this is a huge opportunity. We all agreed finally we need to put the safeguards in place to protect the players and the integrity. That is uniting everybody. The rest is kind of controversial. It is about sport needing to pave the way. I think that was then the final conclusion from the panel saying: we all want to help sport. We see an uplift opportunity, and sport by itself and the NBA by itself, I think they are pretty positive once there is the player protection and the integrity put in place. We see already three other leagues which have been granting us the right that we can sell the official data and the products to the downstream market.

Thank you. Your next question comes from the line of Robin Farley with UBS. A kind reminder to press star six to unmute. Your line is open. Please go ahead.

Hi. Hopefully you can hear me okay. I had a follow-up question on your comment that in the next few weeks we may hear something about you selling data, some of the league data, to prediction markets. Is that included in your guidance already, or would that change your guidance?

Sure. Hey, Robin, it is Craig. Thanks for the question. We do have some minor contributions from prediction markets in our 2026 guidance, predominantly from things like customer acquisition, fan engagement tools, and a little bit of data that we would be providing. For the most part, any significant deal associated with prediction markets is not included in that guidance.

Okay, great. Thank you. My other question, and I apologize if this—I had a conflicting earnings call, so if you covered this already, you can go on to the next question. Just with the IMG ARENA contribution that officially closed in the fourth quarter, did you indicate—you mentioned you are able to sell that data to many more operators than IMG had. Is there a ramp? Does that take time, or is that something you are pretty much able to do? That is now going into all those additional sportsbooks by now, or is that something we would expect to ramp through the year? Again, sorry if you covered that already. Thanks.

Hi, Robin. Yes, you guessed it right, we covered this already. Next time we have to look that you have no conflicting calls at the time and we have to release. To go a little bit deeper, the main important one for us in the first two months, November and December of last year, was that we get the tier one operators on the content. Of course, we enabled for a grace period to services that everybody can test this, and that was very successful. This plan and the execution here to get very quickly a pickup was our main target, not so much initially the focus on the revenues. It was very important for us that we get this content distributed to the market, that we can then continue to build on this. That was very successful.

Okay, great. Thank you. Thanks for the recap. Thanks.

Sure.

Your next question comes from the line of Barry Jonas with Truist Securities. A kind reminder, please unmute yourself locally or press star six to unmute. Your line is open. Please go ahead.

Hey, guys. Can you hear me?

Yes.

Yes.

Okay, great. Your closest competitor announced a large-scale M&A transaction recently. Did you look at that deal? How are you thinking about M&A in general here? Thanks.

We are constantly looking at what opportunities we have. You know that we laid out on the Investor Day our strategy with adjacent markets. One is, of course, advertising and our products and programmatic advertising. The opportunities which we see around this iGaming is such an opportunity, and of course we are looking into it. We are looking from a clear scheme: is it accretive for us to buy such a business? Does the growth rate fit? Does it fit to our EBITDA profile? We are deciding on this. In this case, I think the answer is clear. We did not do a deal here. We believe that at the moment it is best for the capital which we have to increase our—

Great. Just for my follow-up, it is looking like there could be a lockout for the 2027 MLB season. Can you remind us what impact, if any, that would have on you? Thank you.

First, let us hope that Rob is solving the lockout issue and that the parties are coming to terms, and that we see a nice gentle start of the baseball season. I think we all hope for this. If it is not happening, for us the first thing is, do we have at this time good replacement content in the tier one category? We do. We have PGA, we have the WNBA, we have a lot of ATP matches which can cover that gap which we have with missing MLB matches. Of course, we have contract provisions and protections in place for this situation. We all hope in favor of the sport that it does not happen. For us, the impact will be very limited if there is impact.

Great. Thank you.

Our next question comes from the line of Jordan Bender. Kind reminder to unmute yourself locally using star six. Your line is open. Please go ahead.

Hi, everyone. Good morning, and thanks for the question. Looking at the guidance, it looks like your operating leverage or your flow through does pull back in 2026 for the implied number. Is there any incremental investment that is going into IMG, or is there anything that you can help us with or unpack some of those dynamics at play? Thank you.

Sure. Thanks, Jordan. A couple of things with regards to EBITDA flow through when you look at 2026 versus 2025. First and foremost, the biggest reason for what I would say is lower flow through is that we are now fully incorporating IMG as if it is new revenue. That revenue comes at what I would say is a margin that is higher than our base margin, but lower than our incremental margins. The incremental margins of our base business are well over 40%. The actual margins that we are taking IMG in and out are close to our, I would say, base business margin, which is someplace in the mid-20% range. That would be the first thing. The second thing that I would say is when you look at the margin expansion that we had in the fourth quarter of 2025, there were some significant savings that happened in the fourth quarter, some of which will move into the first quarter and some of which will not repeat. You had things like lower bonus accrual in the fourth quarter. You had some IT development spend in the fourth quarter that was pushed to the first quarter of 2026. It really comes down to a timing issue more than anything else. When you look at the 450 basis points of margin expansion that we delivered in the fourth quarter, that is primarily the driver of why the margin expansion in 2026 is a little bit less.

Perfect. Thank you. Craig, I will stick with you on the follow-up. On the buyback, good to see that stepping up by quite a bit. How should we think about that either on a quarterly basis, on an annual basis, with where the stock trades today?

Sure, Jordan. Carsten can add a little bit more here if he wants. When you think about how we buy back our shares, we predominantly buy back according to a grid. We have done that historically. We are opportunistic on top of that, like we were with our secondary buyback in the middle of last year. Predominantly, we buy according to a grid that allows us to be much more aggressive at lower rates and pull back a little bit at higher rates. Given where the stock is today versus the value that we are creating at our company, both in the short term and the long term, we certainly see an opportunity to continue to buy back aggressively at current levels.

Understood. Thank you very much.

To add, maybe from Carsten, yes, we are now ready for a more opportunistic approach if that gap is increasing, which we see.

Your next question comes from the line of Clark Lampen with BTIG. A kind reminder to please unmute yourself locally by pressing star six. Your line is open. Please go ahead.

Hopefully, you can hear me.

Yes.

Okay, perfect. Maybe, first question, sort of a point of clarification. Carsten, for the league partners that have not yet granted you the right to explore or strike partnerships with some of the prediction constituents that were mentioned already, is the hurdle or consideration set any different than we have talked about so far last quarter? Today you highlighted the regulatory aspect of this. I am curious if, for some of the partners that you did not mention earlier, whether they are looking for something different or maybe their review process is a little bit more stringent. Any clarification that you can provide would be appreciated. Then the second question, just on the MTS business. You highlighted this last quarter as a key area for upsell and cross-sell efforts with IMG. I am curious if you could provide a little bit more guardrails around what we might expect for this piece of the business in 2026. Is this where the vast majority of the incremental 25% is going to show up, or has the expectation set moved at all? Thank you.

Good. Looking now to our partners, we are speaking here NBA, we are speaking Major League Baseball, we might speak PGA. They all have a different view and a different approach here. It is centered around how to protect sport and how to protect the game. For all of them, they have some nuances. Of course, we would love to see very clear signals very quickly. We are ready with the product. We have an official partnership, and it is about official data. We respect this from our partners there. We see an uptick opportunity in this year in the tens of millions if the partners decide to go quicker. We have now quite some resources on the product development on the market maker side, as you hear, because we think we can help the existing market makers significantly with real-time models to predict liquidity and to predict risk streams. That is something exciting for us on R&D side, and we use this time to get ready. We have now three partners which gave us the green light and we are beginning to deploy here the real-time information and later on the products on this. We understand that our partners are speaking with the regulators here. CFTC plays a main role in there. I think everybody is encouraged and everybody understands that regards for the protections need to be there. Still, this is a sector where we have different tendencies and where we have things. We have now 39 or 40 states, including D.C., which have a regulatory framework, and they have a position on this, as we all know. Therefore, I think it is good for all of us, and we are well advised to put two things in focus: how to protect the player and how to protect the game and the players of the game. Those are the things. We expect movements very soon from the partners which I mentioned here into a direction that they will allow us to deploy official data and the products based on this data, which are even more exciting. Looking now to IMG, the uplift, the revenue synergies, that is broad. We have significantly more clients for the live data. We have the same for the AV feeds. Of course, we put it into our products, the visualizations, the Managed Trading Services. There is not a specific product. It is broadly over the space that we see these revenue synergies.

Thanks very much.

Your next question comes from the line of Jeffrey Stantial with Stifel. Kind reminder to unmute yourself locally by pressing star six. Your line is open. Please go ahead.

Great. Good morning, Carsten, Craig. Thanks for taking our questions. Maybe starting off on AI, which has obviously been a hot topic this quarter, and we have not touched on yet in the Q&A. Carsten, I am curious for the core data business itself, obviously the transition in this industry over the past decade or so to exclusive rights contracts has created a real meaningful moat. If you look at some of the other verticals, Managed Trading, streaming, marketing, can you give us some thoughts on how you see the value in distribution and bundling and then maybe if there is risk as you see it today, if the marginal cost to develop some of these products starts to go down with the quality LLMs continuing to get better? Just any sort of high-level strategic thoughts there would be helpful. Thanks.

To keep it with Steve Ballmer very short, I was witnessing him live on stage. He said to the auditorium, “70% of you will be redundant in 18 months’ time.” He laughed about this the way our Steve is laughing. There is really a revolution ongoing, and I am very happy that we are prepared since three years on this. We are applying this massively. We acquired the best brains available from Google for the topic AI and GenAI, and I split this in two pieces. This year on the internal roadmap, the first priority is our engineering. 100% of the code from the engineers is AI-supported. There is no way for the engineers around this. This increased our lead time already by 20%, and I expect a significant uplift on those numbers. The second focus area is operations. Why should a human being not be replaced by a programmed AI agent if the data is there, if computer vision is there and video is there? There is no reason for it. We are already on 50% of our content produced with our own agents, which are working on computer vision to extract that information, tens of thousands of more data points per match, depending on the sport. These are the two key focus areas. I would love to see much speedier deployment of agents in the financial sector and in the legal sector. I think that is a big, big benefit. Statistical KPIs are something which is from yesterday. You are going to need to adapt to the market. You need to understand what is in the market and how that compares to the internal KPIs and numbers. These are areas which are not the top priority, but we are working very hard on this. Engineering and operations are the top internally. Externally, the real exciting thing is what we can do with all the data points and the deep data which we have. For this, we started now the foundation model for basketball. What it is, we have seen this foundation model because we feed the tracking data into this, and that is billions of data points. When LeBron is, for example, doing a no-look pass, we see if he is looking up, down, left, right. The human being cannot see this, but based on this and based on the position of the other players, we predict now the next pixel and the next pixel, and from this we can predict seven seconds with a high probability from where the points are scored. Imagine how cool this thing is for coaching applications, but imagine how cool it is for market makers to have that edge to predict what is the potential next move and underline it with liquidity. This is exciting stuff, and that is now possible with AI. I could speak hours about this, but these are the main sectors where we are looking into.

That is a really helpful overview. Thank you for that, Carsten. For our follow-up, maybe turning over to Craig. You gave some commentary on quarterly cadence for 2026, which I think was helpful. I want to drill in a little bit further and really focus on both top line and cost synergies for IMG. Can you talk about how you see the phasing of that benefit going through 2026? If we look to the back half exiting into 2027, should we think about late 2026 as a reasonable go-forward run rate? Is there still more to come that would flow through in 2027? Anything to help about the phasing as you go through the year on both top lines and cost synergies would be helpful. Thanks.

Sure. Thanks, Jeff. Appreciate the question. When you think about the IMG synergies on the revenue side, as Carsten mentioned, we are well on our way with regards to the outreach that we have had with our customers and our clients with regards to what kind of content they would like to see and what kind of content they would like to utilize. The revenue synergies and the timing of them for 2026 really comes down to two things. First and foremost, the timing of games and matches. There is less content for use in the first quarter than there is, let us say, in the second or third quarter of the type of content that we acquired. There will be a little bit of phasing related to that. The second thing will obviously be as we reach out to more and more clients and show them what we can do and offer to them, we should ramp up throughout the course of the year. You should see definitely the revenue predominantly in the second and third quarters from a benefit perspective, but there will be some benefit in the first quarter as well. With regards to revenue in 2027, before I turn to costs, the 2027 synergies will predominantly look at which content we maintain from an IMG perspective. Obviously from an IMG portfolio perspective, there is some content there that we want to keep, there is some content there that we may not want to keep. The revenue opportunity will really depend on the quantity and quality of the revenue that we are maintaining. Our customers at the end of 2026 should be all lined up and ready to go, so it would be more about the content that we decide to keep. With regards to the cost side of the house, the cost side will be more phased. You will see that roll itself through 2026. You should start to see some more margin opportunities in the back half of the year from the cost side of the house than you would see in the first half of the year with regards to IMG. Certainly, we would expect to continue to build on that in 2027 as we manage this as a combined business. You have to remember what we are buying here is effectively content, and we are managing this as a combined entity, and you will see that play itself out over 2026 and 2027. Thanks very much.

We have time for one more question. This is your last question for today. It comes from the line of Bernie McTernan with Needham. Kind reminder to unmute yourself locally or press star six. Your line is open. Please go ahead.

Great. Thank you for taking the question. Carsten, just wanted to ask a broad one for you. I think we all just went through an earnings cycle with DraftKings and FanDuel, where we significantly lowered our growth expectations for the companies. I wanted to get your outlook on the U.S. market. Can this still be a major growth driver for Sportradar Group AG, relative to the rest of the world? Maybe breaking that down on the regulated OSB product versus prediction markets. Thank you.

Thanks for giving me this opportunity, Bernie, to look a bit to the broader picture. From a Sportradar Group AG lens on the broader picture, 70% of our revenues are outside of the U.S. There is a well-oiled machine; it is global. We have the global strength and power in the distribution, and we deliver the results here. Looking now to the remaining 30%, two-thirds of it, roughly, is betting in the U.S. From this, we see at the moment anything between 15%-30% somehow influenced by prediction markets. What we hear from our partners—and that is FanDuel, DraftKings, the Fanatics of this world—they see little or no cannibalization between the two things, prediction market and online sports betting. If you ask me now from a Sportradar Group AG perspective, we expect an uplift opportunity in the tens of millions of dollars, not in the hundreds of millions of dollars, from prediction markets. Looking on the global scale, yes, we have to focus to keep that machine running, which is internationally significantly bigger than inside the U.S.

Thank you for that. Just as a follow-up, Craig, I wanted to make sure I understood the synergies right. If we are thinking about where the upside is from what you are currently messaging, is it fair to assume that the potential on the revenue synergy side is probably fully baked in at this point, therefore any potential upside would be from the cost side? Could you take a moment to frame the potential cost synergy benefit versus the revenue synergy benefit?

Sure. I would say we are not saying that our revenue synergies are fully baked in. Obviously, a lot of this comes down to what sort of content our customers want to take, what kind of products we develop that we can ultimately sell to our customers. I would say there is definitely some additional revenue upside that can be had from an IMG perspective, depending on the dialogue that we have with our clients. On the cost side, I would not say that they are baked into 2026, but I would say that they are easier to identify. We know exactly the cost savings that we want to get from all the major cost buckets, whether it be scouting costs, whether it be headcount costs, whether it be general facilities, whether it be IT, whatever it might be. We have identified what we want to do on that front, we are going to roll it out throughout 2026. We know that there are some additional things that can be done if need be, but the cost base is going to match what the revenue opportunity ultimately is. We have said previously that we expect the IMG contribution to be margin accretive to the overall results from Sportradar Group AG in 2026 and beyond, and that is certainly what we expect for this year.

Great. Thank you both.

We want to thank everyone for joining us for our fourth quarter earnings call. This does conclude today's call. Thank you all for attending. You may now disconnect.