Shares of Genius Sports (NYSE: GENI) soared on Tuesday after the company unexpectedly announced a third-quarter profit and raised its financial outlook for 2024.
While most gaming stocks faced profit-taking, Genius Sports stood out with its shares climbing nearly 16% in late trading, accompanied by a volume surge to four times the daily average. Investors reacted positively to the company’s report of a third-quarter net income of $12.5 million and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $26 million. Genius Sports also posted revenue of $120 million, surpassing its previous forecast of $25 million in EBITDA on $119 million in sales.
The net income figure was a key driver of enthusiasm for Genius Sports stock. This figure reflects a more accurate measure of profitability compared to EBITDA. Impressively, the third-quarter net income marked a $24.1 million turnaround from the same period last year, where the company experienced a loss of $11.6 million.
During the quarter, Genius Sports expanded its data agreement with ESPN, enhancing data coverage for college sports, the NBA, and the WNBA broadcasts, while also securing a social media collaboration with Reddit to provide enriched data for NFL-related discussions on the platform.
Adding to the positive sentiment, Genius Sports boosted its 2024 financial outlook. The company now expects to achieve Group Revenue of approximately $511 million and adjusted EBITDA of around $86 million in 2024. This represents anticipated year-over-year growth of 24% in revenue and 61% in adjusted EBITDA. Earlier projections were for $480 million in sales and $75 million in adjusted EBITDA. This revised guidance suggests that 2024 will mark the fourth consecutive year of at least 20% top-line growth for Genius Sports.
Additionally, the company forecasts margin expansion of approximately 400 basis points this year, highlighting its effectiveness in maximizing operational efficiencies. In the third quarter, operational and transaction expenses were notably lower compared to the previous year.
Contributing further to the stock’s surge, Genius Sports reaffirmed expectations of achieving cash flow positivity in 2024, although it did not specify the cash flow target for the year. CFO Nicholas Taylor underscored the company’s confidence in its fourth-quarter outlook, emphasizing 38% revenue growth, over 2.5 times growth in adjusted EBITDA, 900 basis points of margin expansion, and significant cash flow, positioning the company for positivity throughout the year.
CEO Mark Locke highlighted the growing trend in live betting on the NFL, where Genius is the exclusive data provider. The increased demand for in-game wagering and same-game parlays boosts the need for sophisticated data, benefiting companies like Genius Sports.
 shares jumped 16% on a third-quarter profit and upgraded 2024 outlook, driven by strong revenue and strategic partnerships.){kind=link}