Sportradar Aktie

Hello, everyone. Thank you for joining us, and welcome to the Sportradar Second Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Jim Bombassei, Senior Vice President, Investor Relations and Corporate Finance. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us for Sportradar's Earnings Call for the Second Quarter of 2026. Please note that the slides we will reference during the 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'll open up 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.

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 to non-IFRS measures are included in the earnings release, supplemental slides in 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. And now I'll turn the call over to Carsten.

Good morning, everyone, and thank you for joining us. Today, I will discuss our second quarter results and operations, including our continued success monetizing IMG ARENA content as well as our product innovation across key sports. I will also discuss the progress we are making against our key strategic priorities as we capitalize on prediction markets and continue to roll out of iGaming.

Sportradar is a mission-critical provider position at the intersection of sports betting and media industries. We are executing on a number of strategic initiatives that we are expanding our addressable market and will ensure our long-term success. This will enable us to drive durable and profitable growth along with substantial cash flow. Now turning to our second quarter results.

Today, company revenues increased 19% year-over-year as we benefit from strong performance in betting and gaming content, including continued strong progress monetizing IMG ARENA rights. We delivered an adjusted EBITDA margin of 20% and generated significant free cash flow. We also accelerated our returned capital to shareholders through our [ EUR 250 million ] enhanced open market share repurchase program. During the second quarter, we repurchased approximately $140 million worth of shares. Since inception, we repurchased $422 million or 26 million shares through last week under the $1 billion share repurchase program, as we take advantage of the volatility in the market as well as the value we see in our shares.

In terms of the underlying market dynamics, we are continuing to see moderation in the U.S. market growth given no significant state openings and the growth in production markets as well as some impacts in certain Rest of the World territories due to increased tax regulation. While we continue to have confidence in our long-term ability to drive growth as we execute on our strategic initiatives, we are updating our full year guidance to reflect some of these trends, which Craig will discuss in more detail.

Turning to our operating highlights. We continue to make great progress integrating our IMG ARENA rights portfolio, including capitalizing on revenue synergies, expanding keylight and ramping up our next-gen products. Demand across the global client base continue to be strong, and we remain on track to exceed our previously communicated revenue synergy target of 25%. We also continued to expand our premium product offering, launching player and micro markets as well as 4Sight Streaming for Roland Garros and the upcoming U.S. Open. In addition, we expand the rollout of our premium golf service for the PGA, including live match tracker, live streaming and advanced in-play betting markets, which will enable operators to offer rich in-play of experiences.

We also brought our new live match tracker regionalization to additional sports league, including the MLS and the UFC. During the quarter, we secured a multiyear expansion to provide exclusive data and audiovisual betting rights for Wimbledon. This renewal strengthened and allows for further innovation across our premium mass portfolio which spans 3 of the 4 Grand Slams. In addition, we recently completed NBA and NHL season further demonstrated our ability to maximize the value of our premium sports rights. Both partnerships delivered strong full season results, reflecting continued customer adoption of our betting products and solutions across our customer base. This continued strong progress underscores our ability to monetize rights across our large global client base and brought products to deliver significant accretive revenue growth.

Switching to Managed Trading Services. We continue to scale the business with strong Q2 turnover to benefit from major U.S. sports playoffs as well as the World Cup group stages. We manage approximately $56 billion of turnover on behalf of our clients on a trailing 12-month base, which is up 26% compared to the prior period. Moving on to our Marketing Services. Affiliate Marketing delivered its strongest month on record in June. We saw strong demand from North America sportbook clients as well as from our clients, including prediction market exchanges. We have been actively working with operators such as [indiscernible] market in Norway, among others.

In terms of our growth pillars, we continue to expand our pipeline and upsell and cross-sell our content and product portfolio. At the same time, we are investing in capitalizing on exciting adjacent opportunities. One of these significant opportunities is in predictions markets. With our premium content, global scale and unmatched product portfolio and capabilities, predictions market is a natural adjacency. It expands the U.S. TAM by opening up new states, attracting new players and increasing engagement with sports. Similar to our position in online sports betting, we will power key players in the protection market ecosystem, including exchanges, market makers and brokers.

To this end, in June, we announced a multiyear global agreement as an official sports data and solution provider for Kalshi. Under this agreement, Sportradar will deliver a broad portfolio of premium sports and content and services across major sports, including MLB, ATP, NHL, MLS and UFC, amongst others. We will provide Kalshi our real-time data ops to help them to ensure timely settlements, fan engagement solutions designed to drive deeper engagement, customer acquisition service to help them to acquire high-value sport fans and our industry-leading integrity services.

As we also recently entered into a multiyear agreement with Polymarket in coordination with TDI for the ATP tour. As part of the deal, we are providing Polymarket in the U.S. with streaming of ATP matches on an exclusive basis, along with a nonexclusive base, our real-time data and also for settlement, fan engagement solutions, customer acquisition services and integrity services. Notably, we have the ability to enter into agreements with Kalshi and Polymarket key partners, including brokers and market makers. Overall, we are excited to partner in what is an emerging fast-growing segment of the sports market and believe this demonstrates Sportradar's unique value proposition within our industry.

Looking ahead, we continue to have active conversations across the prediction markets ecosystem and anticipate entering into additional commercial deals in the coming months. Now turning to Playradar, our newly established iGaming business. This is a natural extension of our core business. The vast majority of our customers operate across both sports betting and iGaming. While these businesses have traditionally been managed separately, operators are increasingly focused on driving greater crossover between the 2. That's because a player who engages in both sports betting and iGaming can generate up to 5x the lifetime value of a sports betting-only player. We are creating differentiated entertainment experiences that seamlessly connect sports betting and iGaming.

One example is our 24/7 live experience, where players can watch live sport events in a multiplayer setting while simultaneously engaging with complementary casino games or making real-time predictions on a live match. We are also gamingifying historical sports content, starting with ATP, which will allow consumers to participate in a fast-paced gaming experience built around historic points from some of the world's greatest tennis matches. We have secured iGaming regulatory certification across multiple jurisdictions in South America, Europe and Canada, and we expect to expand into additional major European markets and several U.S. states throughout the remainder of the year. Importantly, we are doing all of this organically and efficiently using existing resources.

More broadly, we continue to focus on driving increased operating leverage across our business. Last quarter, we announced steps to further streamline our operation and drive cost efficiencies, which will result in significant annualized savings. A key enabler of this effort is the increasing usage of AI across the business. We are leveraging AI to automate workflows, enhance coding and data collection and accelerate product innovation. We will continue to look for ways to deliver cost savings and further enhance our margins while maintaining our commitment to innovate across the product portfolio.

In closing, we believe the progress we are making on our strategic initiatives as well as our premium content and broad product speed will enable us to continue to deliver durable revenue growth. We are confident in our ability to capitalize on the expanding addressable market for our products and solutions, including the prediction markets and in iGaming. This growth, combined with expanding operating leverage and strong cash flow generation positions us to deliver long-term shareholder value in the months and years 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. Over the last 2.5 decades, Sportradar has built unmatched global scale across the sports, media and betting industries, continually creating additional value for our clients and partners. The strong growth we delivered in the second quarter once again demonstrates the power of that platform as the demand for our robust content portfolio, diversified product suite and leading technology and services solutions continues to expand.

Not only is it generating sustained results today, but as markets evolve and grow and the new opportunities arise such as prediction markets, we are uniquely positioned to capitalize. The fundamentals of our business remain strong. And while there are a few headwinds impacting our short-term results, we remain poised to deliver sustained revenue growth, consistent margin expansion and increasing cash flow generation in the years ahead.

Turning to the second quarter results. Sportradar generated revenues of EUR 378 million, an increase of EUR 60 million or 19% compared with the second quarter of 2025, driven by the continued cross-sell and upsell of products and solutions to existing clients, including the strong uptake of IMG content. Additionally, we've begun to just stretch the surface on the prediction market opportunity. which had limited impact in the quarter, but which is poised to accelerate growth in the back half of the year as we further expand our addressable market.

The revenue growth in the quarter was negatively impacted by the slower growth from traditional U.S. sports books as well as the impact of foreign currency headwinds, particularly from the U.S. dollar relative to the euro. Excluding the impact of FX movements, revenue growth in the second quarter would have been 21% on a constant currency basis.

Turning to our individual product groupings. Growth was driven by our Betting Technology and Solutions' products, with revenue of EUR 314 million, increasing 21% versus the second quarter a year ago. This growth was due to a 27% increase in betting and gaming content revenues as we continue to see strong demand for both streaming and betting engagement products as well as odds and live data products, most notably from the upselling of IMG content across our global client base, and integrating it further into our diverse product suite.

Managed Betting Services revenues were in line with the same quarter a year ago as increased revenue in and Managed Trading Services from higher turnover as we benefited from the World Cup and NBA playoffs, and strong margins was offset by lower revenues in our Platform business. Moving to our other product group, Sports Content, Technology & Services delivered revenues of EUR 64 million. an increase of 9% year-on-year, driven by growth in Marketing and Media Services as we benefited from increased spend from Media and Technology customers as well as increased affiliate marketing spending as prediction market exchanges and sports book covers ramped up their customer acquisition campaigns. Partially offsetting this growth were a reduction in sports performance revenues, primarily as a result of foreign currency headwinds.

The growth in the quarter was once again geographically broad-based, with Rest of World revenue increasing 20%, while U.S. revenue was up 16% on a reported basis. Headwinds from foreign currency movements continue to impact U.S. reported revenue, which would have increased approximately 22% on a constant currency basis.

Turning to adjusted EBITDA. The revenue growth, combined with our stable sports rights portfolio and our continued focus on cost efficiencies, including synergies related to IMD in areas such as engineering, scouting, AB production and personnel, enabled us to deliver another quarter of margin expansion as adjusted EBITDA increased to EUR 76 million, up 19% year-on-year. 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 30% year-on-year to EUR 138 million, due primarily to the addition of IMG content, which, from a seasonality perspective, has a higher value of matches in the second and third quarters, giving the tennis, golf and soccer calendar. As we have said previously, our major rights deals are locked in long term. So we have significant visibility on sports rights costs moving forward, giving us 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 77 million in the quarter, down 4% year-on-year despite the inclusion of IMG headcount as we begin to realize the benefits of a cost efficiency initiative that we announced last quarter and from a reduced bonus accrual versus a year ago. Overall, we have further streamlined our operating structure, better aligning resources with our strategic priorities, and going forward, we will continue to capitalize on efficiencies while focusing resources on the most profitable growth opportunities.

Adjusted purchase services were EUR 52 million, up 20% year-on-year, primarily due to the inclusion of IMG as well as higher cloud costs. Adjusted other operating expenses of EUR 35 million in the quarter were up 42% year-on-year, with the increase predominantly driven by costs related to our Brazil operations and legal expenses due in part to supporting adjacent market growth opportunities. Overall, we continue to focus on delivering 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.

Looking at the full P&L. We generated a net loss for the quarter of EUR 4 million versus a profit of EUR 49 million in the second 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 rents versus a gain of EUR 54 million in the same period a year ago. Additionally, we recognized restructuring costs of EUR 11 million related to the efficiency initiatives we mentioned earlier.

Turning to the balance sheet. During the quarter, we successfully amended our revolving credit facility, extending the maturity to 2031 and upsizing the facility to EUR 250 million while significantly reducing borrowing and commitment fees. Overall, Sportradar remains a very strong liquidity position, closing the quarter with EUR 251 million in cash and cash equivalents and no debt outstanding. In the first half of the year, the company generated free cash flow of EUR 103 million, an increase of 23% from the same period a year ago, and we continue to convert more of each dollar of EBITDA into free cash flow as demonstrated by free cash flow conversion of 73% versus 68% a year ago, despite a nonroutine legal settlement payment during the quarter. Looking forward, we continue to anticipate strong free cash flow growth for the full year and excluding the legal payment, expect free cash flow conversion above last year's rate of 56%.

Cash and cash equivalents declined EUR 114 million since year-end 2025 as the strong free cash flow generation was more than offset by accelerated share repurchases. Last quarter, the Board approved a EUR 250 million enhanced open market repurchase program under the broader $1 billion share repurchase program, reflecting our conviction in our business, our durable growth trajectory, and the value creation opportunities we see ahead. Since the beginning of May, we have already repurchased over 13 million shares for approximately $190 million under the plan, and we expect completion of the enhance program early next month. Year-to-date, we have already repurchased 20 million shares for approximately $311 million which is 17% of our free float at the beginning of the year. Given the continued disconnect between the share price and the fundamental strength of our business, we believe that this is a continued compelling use of capital.

Turning to our expectations for the year. There are a variety of opportunities for the remainder of the year that we anticipate will accelerate growth in the second half, including further capitalization of IMG synergies, expansion of our addressable market through the prediction market ecosystem and a variety of global customer renewals. Despite these opportunities, given the recent underlying U.S. market trends, short-term tax and regulatory headwinds in the industry, as well as the timing of executing on prediction market deals, we are updating our short-term expectations.

For the full year 2026, we now anticipate constant currency revenue growth of 19% to 21%, which at current FX rates is expected to be between EUR 1.518 billion and EUR 1.533 billion reported. We expect to drive operating leverage on this revenue growth with adjusted EBITDA growth of 24% to 27% on a constant currency basis, which at current FX rates is expected to be EUR 360 million to EUR 368 million reported. For the back half of the year, we expect the strongest revenue growth to occur in the third quarter given the timing of sporting events and the inclusion of IMG content. We also expect an acceleration of adjusted EBITDA margin growth. However, given the seasonality of IMG content, we anticipate adjusted EBIT margins will be down in Q3 year-on-year.

Overall, the fundamentals of our business remain strong as the global scale we have built and the investments we have made in content, technology and products is delivering sustained revenue growth. With markets continuing to expand and new opportunities arising, our diverse platform and sustained focus on innovation will deliver increasing value to our customers and partners. At the same time, we are becoming even more efficient with our cost structure, which should enable us to deliver significant margin expansion and further ramp free cash flow, building shareholder value 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.

[Operator Instructions] Your first question comes from Eric Handler with ROTH Capital.

I wonder if you could dissect sort of your guidance revision, if you don't mind, talk about [indiscernible] the puts and takes that went into the revision and is there any -- your view towards the back half of the year? Was there any change to how you're looking at the back half of the year? And then also, how should we think about some of the catalysts as we think ahead a little bit to 2027?

Sure. Thanks, Eric, and thanks for the question. So when you think about the guidance that we updated for the year, after the first quarter call, we indicated that we were keeping our guidance the same despite some softness in the first quarter, predominantly because we saw some good upside coming from prediction markets, and we saw a return of the advertising market in the back half of the year. The reality is those things have happened, right? So we have been able to construct some prediction market deals, and the advertising market for us continues to be strong.

The challenge is, is that the prediction market deals having got some time to come to completion. So just because we were ready for them to go at the end of the first quarter call, the reality is it took a little while for that to happen. So as a result, the timing of that delayed some of those revenues and as such, lowered our expectations for the year, even though we're going to have a really strong second half, partially because of prediction markets. Similarly, on the advertising side, you look at the growth that we delivered in the second quarter, the business is back to growing the way we expect it to grow. However, we're not making up the shortfall that we delivered in the first quarter. So those are really the 2 implications.

And then you layer on some softness that we're continuing to see in the underlying U.S. market. And those are the 3, I would say, primary drivers for why we decided to bring our guidance down for the full year. When you think to the fundamentals of the business and what's going to happen in 2027, all the fundamentals of the business remain exactly the same. When you think about the relationships that we have with our customers, when you think about the upside that you're going to see from prediction markets, when you see the quality of the content and the quality of the products and services that we deliver, we will continue to outperform the market in 2027, and we'll continue to deliver on that margin expansion and free cash flow generation that we talked about.

Your next question comes from Chad Beynon with Macquarie Capital.

Craig, I was wondering if we could just go into the U.S. market trends just a little bit more. That answer was really helpful. But just trying to get a sense of if the trends were decelerating as we kind of worked our way through the second quarter and then maybe what the World Cup benefit was. I think, Carsten, you said group stage was positive. So from a U.S. standpoint, did that also come in slightly below your original expectations?

Sure. So I'll let Carsten talk a little bit more about the World Cup. When you think about the U.S. market, it really didn't change very much from what we saw in the first quarter. If anything, I would say, pretty flatlined in terms of its growth. But you got to remember, it depends on ultimately where -- which sports are ultimately driving things and the time line along that side of things. But what I will say is when you think about our guidance for the rest of the year, we're not expecting a significant acceleration for the remainder of the year, but we would expect the market to improve slightly in order to get to the guidance numbers that we laid out there today.

Good. And Carsten here for the World Cup. We saw 2.5 billion turnover and 350 million tickets, a little bit more, which is very encouraging from a growth perspective, but also from the number of tickets and diversity. We saw a big chunk of it coming from LatAm and North America, which was very encouraging for us. Looking now to the results. At the group stage, we had a couple of surprises, but we had also a lot of favorites winning. So we're speaking here about quarter 2. In quarter 3, the final is in quarter 3, as we all know. The final was for us record-breaking. It was a match with the highest turnover, and it was super profitable because it was a draw, 0-0 after 90 minutes. So that comes in quarter 3.

Looking into quarter 2, what was besides the World Cup, which was very positive, a bit of negative thing was the Knicks. Well, for a Knicks fan, it was not negative. But from a betting perspective, the Knicks have been a clear favorite. So that was in quarter 2 that explains the MTS results.

Great. And as a follow-up, just asking about the Playradar uptake. In the presentation, you spoke about the Q3 and Q4 opportunities, certainly some very big markets there. Can you maybe just talk about discussions or expectations if this has changed in the back half of the year? Or it's kind of a wait and see given the infancy of the product?

Well, the product is on a very early stage of its life cycle, but we will present end of September in Lisbon at the SBC when, by the way, together with Michael Jordan on stage, Playradar, and we will launch this in a bigger style. So the core idea here is our Playradar is at the moment, present on roughly around about 400 bookmaker brands and sites, generating hundreds of millions of impressions. So we want to mix with the Playradar, the live content, which we have, and we have the rights for it and create together with Playradar this excitement on the iGaming space. So there is always a correlation between the live sport and what you can play in the iGaming space.

We believe that's a sweet spot. We believe nobody has the ability to do it because we are sitting on the rights, we have the distribution. And now we are ramping up and developing a very good performing iGaming portfolio for those solutions. The 24/7 channel, which I just mentioned, is really filled 24/7 with live video content where you have parallel opportunity to place iGaming or to place some matches in iGaming. So that's the main concept. We can do this live. We can do this prerecorded, and that's the first wave of rollout, which you will see. But it's on the very beginning of the life cycle. So it needs a bit of time that we can distribute this.

Your next question comes from Ryan Sigdahl with Craig-Hallum Capital Group.

I appreciate the visibility by locking in long-term deals with your Tier 1 leagues over the past few years for rights. That works when things are going well and there's growth. But I guess, given the high decremental leverage we see in the guidance revision today, those fixed cost rights deals, so that makes sense. But does that volatility and the slowing of regulated sports betting growth in the U.S. and I guess, globally, does that change your internal strategy to potentially shorten these renewal deals so they can better match industry volumes, dynamic revenue expectations, et cetera, with kind of what you're paying the league and sharing that profitability with the league?

Sure. Thanks, Ryan, for the question. So I don't think our strategy is changing here at all. The reality is we have a really nice mix of content that we have strong partnerships with major Tier 1 sports leagues. We also have a really long tail of content that ultimately drives a significant amount of revenue and a significant amount of margin. We are margin positive on all of our Tier 1 rights. The challenge that you get when you have a little bit of a softer quarter is ultimately, you do see some margin degradation. That said, when you think about what's going on in the space today, you're seeing a market that's expanding, right?

So what was happening in the first half of the year is you didn't see any revenue really from the prediction market side of the house. Well, now when you look to the second half of the year, you're going to have the ability to deliver on the existing OSB market, but also take advantage of what I would say is an expanding opportunity with prediction markets, all which is addressing or increasing your addressable market. So having the rights that we have is enabling us to capitalize on those markets, and we look forward to driving significant margin expansion, both in prediction markets and traditional OSB markets.

Maybe, Ryan, I'll add here. Looking to the prediction markets, it took us quite a while to negotiate these deals with the leagues and with the players in the space. We have these deals now in place, and we add more and more. So there is a delay here, but there is absolutely not a change in our strategy. Wimbledon is a statement for this. Roland Garros is a statement for this clear strategy that we built this around the major tennis rights that we built the products around this, and we are very bullish on this, but we execute this very disciplined.

So we are looking in each and every deal, the deal must contribute our target margin, the deal must leverage. So that's something which we do since many years, and there is not a change in this. The delay with the prediction markets, like I explained, is not only in our hands, so we had to wait also partly for some of our league partners that we get the support.

Yes, makes sense. And you definitely want to get those first deals, right, since those will be precedent for other prediction market deals. So even if there is a little bit of a transitory timing difference there.

All right. My second question, just curious for an update. I know there was a lot of short report allegations earlier this year. Any updates you can provide whether it be regulatory, business or otherwise?

Well, with respect to the short seller reports, which are published or had been published in April, our Audit Committee with the assistance of our legal counsel, Paul Hastings, reviewed the allegations in the publications, and they determined that the short seller reports present a misleading narrative and that Sportradar has had in place rigorous compliance framework and contractual protections to seek and ensure that the products which are used by our customers are in compliance with the applicable laws. So that's the first thing.

The second thing for the regulators, we received various regulatory approvals in the last couple of weeks for both the betting and the iGaming space all over the place in the U.S., but also in the rest of the world. And for the third one, the largest and most renowned sports organizations like, for example, Wimbledon or the German DFB, which is the C organization, gave us their rights. So that shows you that on every level, we have a high respect in the market, and we did our job and the Audit Committee did the job in a diligent way.

Your next question comes from Clark Lampen with BTIG.

This is Joe on for Clark. From a high level, I was hoping if you could help us better understand the economics or maybe the deal structure that you have in place with Poly. Is it a fixed fee, minimum guarantee, maybe like a combination of the 2? And then just second to that, do you believe that the deal is a good template for how other agreements with different PM operators would be structured?

Sure. Thanks for the question. Listen, we're not going to get too specific on the deals themselves, but you can assume that the deals that we're doing with the prediction markets, especially the ones that we've done thus far, have a fixed fee component and a variable fee component, which allows us to capture the upside as the market expands. And each of these deals will be very different with every exchange, with every market maker, with every broker depending on ultimately what they're looking to achieve and ultimately, what we're looking to achieve. But as Carsten mentioned early on, the key for us when we do these deals is to make sure that they're accretive to the deals that we would have done historically with our OSPs.

We want to make sure that the economics make sense for us and for our prediction market partners, but also for our existing OSB and lead partners. So that all goes into it. We are very much, I would say, locking down diverse deals. It's not just for one aspect of our business. We're getting involved with data and odds. We're getting involved with fan engagement tools. We're getting involved with marketing services. So they're very robust deals, and they have a very wide range of revenue opportunities.

Your next question comes from Trey Bowers with Wells Fargo.

This is Zach on for Trey. Just piggybacking on an earlier question on the prediction market deals. If I heard you correctly, you said it called out that it took a bit longer to get the deals done than initial expectations. Does this imply a bigger benefit to '27 and maybe '28? And how should we think about layering in some of the prediction markets upside to the guidepost you put around '27 and beyond at your Investor Day?

Of course, it implies that '27 and '28, we will see a ramp-up here. It was for us in '26, a lot of work to negotiate the deals, but also to convince our league partners that they're going into this. We are still in progress here with a couple of them. But we are very optimistic that we found the right framework. I think very important is that we have a transaction possibility with the exchanges by itself, Kalshi and Polymarket, but that we can also create new innovative products for market makers. Here, latency is key and center. Deep data is key and center. That gives new revenue opportunities.

For this year, regarded that the upside is in the tens of millions. For next year, of course, this is significantly higher. Of course, this all depends also on the legal framework and the compliance in this sector, which is, as we all know, very fluent. But that's, at the moment, our best assumption.

Let me just add. At Investor Day, which is a little over 1.5 years ago, we laid out what I would say is the tenets for the revenue growth and the margin expansion and free cash flow generation that we expected over the next several years. one of the big drivers of that expansion was going to be continued market strength across the globe. And we are continuing to see that. It's just shifting a little bit, right? So previously, it was all about OSBs. And now you're seeing the OSBs plus the prediction market opportunity.

So from our perspective, what we are focused on is we're focused on having the best content. We're focused on having the most diverse product suite, and we're having the best services that ultimately we can sell to whoever wants to see them and have us outperform the market. We want to continue to take share, and we've been doing that. When you look at the revenue growth we delivered in 2025 and you look at the revenue growth we're delivering this year, the continued outperformance of the market, I think, is a testament to what has been built here and provides the opportunity for us to continue to do that moving forward.

Got you. I appreciate the color. And just for my follow-up, just on some of your comments about moderating U.S. market growth. Could you give us a sense of just within the market, the fixed versus variable component of your contracts? And what should we expect given some of these comments on moderating growth? Should we expect less upside from the variable component? Or how -- maybe just give us a breakdown of what you guys expect from the fixed versus variable side of your contracts?

Sure. When you think about the breakdown of our revenues between fixed and variable, well, about 2/3 of our contracts are fixed and about the other 1/3 is variable. Now that may shift a little bit here with prediction markets. But for the most part, you can assume that those are the right percentages. The fixed side of the business, there's a certain number of contracts that come up every single year, and we would expect to see similar type increases that we've seen historically when those contracts come up because we continue to deliver value for our customers and our clients. When you think about the variable side, that is going to have some up and downs depending on what's going on with the market.

I think overall, we feel like the market is still in a relatively good place when you look at prediction markets and the base market together. In the first half, that was more just focused on what was done on the OSB side of the house. I think to look at one of those without the other is a little shortsighted. So from an overall perspective, we expect the variable side and fixed side to both continue to expand nicely.

Your next question comes from Jordan Bender with Citizens.

Craig, I think in your prepared remarks, you talked about next year, you should see outperformance in the U.S. market. And I think historically, you've used similar language. I just want to kind of double-click on that. Is that our estimates? Or is that kind of industry estimates? How should we think about you outperforming estimates in the U.S. next year?

Yes, I wouldn't necessarily focus on just the U.S., although I do believe that to be the case. When we talk about our outperformance, our outperformance has really been across the globe when you think about the revenue growth that we've delivered versus what the market is delivering overall. And that is speaking back to the products and services, back to the content we have, back to the client relationships that we've built for 20-plus years. we've spent so much time with our clients over so many decades that we ultimately know what they're looking for and what can ultimately drive value for them, and we ultimately grow faster if we're driving value for them. And that really is the focus for us and why we think we'll continue to outperform. And you're seeing that now with some of the deals that we're starting to do on the prediction market side as well.

Okay. Perfect. And then just on the follow-up, going back to last quarter, you had baked in some future prediction market revenue opportunities, what is now the Kalshi deal. From here on out, how should we think about any incremental prediction market deals that you guys announced within your guidance for this year?

So when you think about the deals that we've done, we really think we're just starting to scratch the surface of what the prediction markets can offer. So from a guidance perspective, the deal that we have with Kalshi is pretty much locked in. Obviously, that still is dependent on the NBA agreement as part of that deal, and that's such a big driver for us in the fourth quarter. And that getting done is embedded in our guidance for this year. If that did not get done, that would certainly have an impact.

But we think better the downside, there's actually significant much upside to the overall prediction of market revenues that we have in our forecast today. Can we do deals with other exchanges? Can we do deals with the market makers? Can we do deal with the brokers? Can we do deeper deals even with Kalshi and Polymarket? So there's a myriad of opportunities moving forward with regards to prediction markets. the value that you're seeing in there today is based off of what we know is the hotter today.

Your next question comes from Barry Jonas with Tourist Securities.

Just curious like how much cannibalization do you believe OSB is seeing from the prediction markets right now in the U.S.?

According to our clients, there is very limited cannibalization. That's what the clients are telling us. You're going to have to have a look where is the distribution in California, Texas, Florida, places where OSB can't be in. You're going to have to look to the regulation and you're going to have to look to the taxes. But from a cannibalization aspect, there is very little cannibalization in there. That's what our clients are telling us.

Got it. Okay. And then just as a follow-up, how are you thinking about M&A here? Are there specific areas you would be interested in? Is affiliate marketing one of them?

No, not specifically affiliate marketing. So we think we are very strong with our own tech stack. You will see various partnerships. But from an M&A perspective, that is not the area where we are deeply looking into. But we keep our eyes very open. everything which is around iGaming is very exciting and interesting. So we think there is a huge growth opportunity in there. But we also think that our shares and our stock provides the best opportunity and that is materializing in the share repurchase program.

And Barry, when you think about M&A, the lens that we use, we obviously want to make sure that when you think about the base business that we have here today and the revenue growth that we're generating, the margin expansion that we plan on delivering and the free cash flow generation ahead, any M&A transaction that we look at has to be accretive to those items. So it's very hard to find something that can do that. And as Carsten mentioned, when you see the disconnect between what we believe is the value we're creating here at the company and the stock price today, there's no better use of our resources than to buy back shares at this point.

Your next question comes from Jeff Stantial with Stifel.

I just wanted to circle back and follow up on -- I think it was Chad's question from earlier and confirm I heard right. Craig, did you say that the back half guidance does assume that sort of market-wide trends get a little bit better in the back half? And then as a corollary to that, are you exploring or is there any opportunity with the renewals that are coming up to sort of shift what economics are priced on and maybe move away from handle and more towards GGR or NGR, just given some of the structural tailwinds in the U.S.

Sure. Thanks, Jeff. Listen, I don't think we're looking for anything significant to change in the U.S. market. Yes, we're assuming that the market does get a little bit better in the U.S., but there's a variety of variability that can happen, whether it be more deals in the prediction market and that market expanding, it could be whether handle and GGR expands a little bit. So there's a variety of ways for the U.S. market to improve in the back half of the year. So I would not expect a significant change to have to happen for us to hit our guidance numbers. What I would say with regards to how we do our contracts, we believe that there's still significant upside to the U.S. market. So for us, being able to tap into the variable nature of this market is a positive for us over the long term.

Yes, the short term has a little bit of choppiness to it. But over the long term, given the value that we're creating, both for our customers and for our lead partners, we want to be able to capture some of that value as we move forward here. So I don't see a significant change in the contracts. Not to mention, a significant amount of those contracts are already locked in for the long term. So there's -- it's a little bit difficult to change them in the short term as well.

That's great. And then for a follow-up, I wanted to continue this threat of sort of initial prediction markets economics. I recognize that you can't give any deal specifics, but I'm curious, if you just look at and use the Kalshi deal as a sort of template for others and look at the breadth of products and services that you're providing, is it your expectation that sort of your all-in take rate will be similar, better or worse than a comparable dollar of volume in traditional OSB?

Sure. The first thing I'll say, thanks for the question, is that every one of these deals is different, just like every one of our deals with all of our OSB partners is different. You talk to your client, understand what matters to them, see if you can satisfy that need and then ultimately drive value for yourself over time. And that value for ourselves has to be incrementally positive. So when you think about an OSB deal, I wouldn't agree to a deal on the prediction markets that would give me a lower take rate than I'm doing on the OSB side of the house that wouldn't make sense from a business perspective. So all in all, we expect these prediction market deals to be positive for us, but we will again tailor them and tailor all deals moving forward to what is best for our clients and ultimately what's best for us in the long term.

Your next question comes from Mike Hickey with StoneX.

I guess just the first question on prediction market opportunity. market making is a significant piece of that you're monetizing it today. But I guess, beyond just selling data and models to market makers, do you think you could eventually participate directly in market making similar to how you build your MTS business for traditional sports books?

Mike, Carsten here. So you are spot on with these opportunities. At the moment, we do not monetize really significant with market makers. What they first need is latency, lowest latency. And traditional feeds for online sports betting, they always have a settlement in the clearing time. Prediction markets and market makers don't need this because they are active on both sides. So latency is key and center. Deep data and the technical abilities is key and center. Now as a sample for the U.S. Open, we will cooperate there with the tracking partner, and they know within 0.2 milliseconds is that ball in or out. That is gold for market makers. Putting that into a special feed, which is optimized for the lowest latency is definitely a very high value for them. That's the first thing. This feed is ready, and we roll it out. with the U.S. open, but also with the start of the NBA season. That helps us now to leverage these technical abilities, which we have and the league partnerships with the deep data.

The second thing, the deep data for the modeling that is highly interesting. So you know that we built the foundation model. And the foundation model begins to predict what happens in the next 3, 4, 5, 6 seconds. And if you can predict this with a high accuracy based on all the tracking information which is there, that enables also market makers to distribute the risk spread much better than they can do it at the moment. So that's a highly attractive area, and there is a lot of things which we can optimize.

I guess the next one is on the tax regulatory tax impact. I think you mentioned Rest of World business may have been influenced by that. I think I heard that. And so just sort of curious if you could flush that out. And then maybe specifically on U.K., they've obviously digested or digesting a big increase in April on iGaming. Obviously, that's a significant market for you. Wondering how that's sort of impacting your business and how we should think about 27% when you have the tax regimes on the OSB side?

So within this year, tax regimes have been not really very beneficial from the point of our clients. The U.K., we saw a tax rate of shy of 100% from 1 year to another, which is a hurdle for our clients, and we saw problems here for the clients. And they're trying to optimize their cost structure, of course. We saw the same thing in Brazil on both sides, the gaming taxes, but also the taxes within the country. So both of them are not really beneficial for our clients.

Looking now into next year, we do not have any indications worldwide that we see something like we saw it this year. There is a tightening of the tax regimes globally. Our clients, I think, get along with this very well. There are some bigger market opportunities. Japan might be a good opportunity, but there might be a couple of other opportunities around the globe here. So looking into it from now, from the perspective today, we don't see any major obstacles in '27, but U.K. and Brazil in this year have been not really beneficial.

From the iGaming, it's much too early for us. We are in that start-up phase, we are believing that we are diving here in a deep blue ocean with that connects between what we have as inventory and direct player and the distribution of the client side and matching this together with an iGaming experience, that's unique. Nobody in the world has this. So this is not something where we see a lot of tax sensitivities. We see more the technical skills, how to connect sports betting with iGaming in this space.

Your next question comes from Bernie McTernan with Needham.

Wondering on the -- in the U.S. weakness, was there any like maybe weaker volumes with the MLB because of crowding out from the World Cup? Or is that really a broad market comment on the weakness?

It's a broad market -- a broad comment on the weakness in the overall margin. The MLB volumes continue to be strong for us. I can't speak to the -- obviously, the entire market, but overall, the MLB having a nice year so far.

Okay. Understood. And just to double click on prediction markets again. I just wanted to ask some specificity, if there's really any change in the exit rate that you expect for prediction markets, exit rate for year-end now versus 3 years ago -- or sorry, versus 3 months ago?

Well, I think the opportunity overall from prediction markets continues to be something that we're really excited about. And I think if you asked us 3 months ago, what this could be for us, I think our expectations would be a little bit lower than they are today. given all the inbound interest that we've seen from across the ecosystem, whether it be the exchanges, whether it be the brokers or whether it be the market makers.

Certainly, obviously, we now expect more growth year-on-year in '27 versus '26 because some of these deals got done a little bit later. But that's really just a timing issue. More importantly, the overall opportunity, I think, is really, really exciting, just because of the value of the content that we have and the value of the products and services that we deliver.

Your next question comes from Jason Bazinet with Citi.

I just had a question on the U.S. prediction markets. They somewhat famously sort of got around the state-by-state regime, by going through at the federal level. But there seems to be some pushback now among state AGs, I think New York comes to mind. Is that something that you anticipate for judge as an injunction or something like that? Is that something that you anticipate impacting prediction market revenues in the U.S., the state level legal challenges?

So from our perspective, Jason, obviously, we operate where we are supposed to operate, and we provide our services to our clients where they're allowed to use those services. I can't speak to what's going to happen with ultimately, all these lawsuits or injunctions. From our perspective, we are going to serve our clients the way we serve our clients. And as more as they are allowed to operate in jurisdictions, we'll continue to do so.

Operator, that ends our call. I'll turn it back to you for final comments. Thank you, everyone.

This concludes today's call. Thank you for attending. You may now disconnect.

Hello, everyone. Thank you for joining the Sportradar Q1 2026 Earnings Call. [Operator Instructions] 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 1 question and 1 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 in 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. 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.

And 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 scaled 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 [indiscernible] as COO, the enhanced open market repurchase program and reaffirming of our '26 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 is very bright prospects 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 4 years as a public company and over the past 2.5 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, replace integrity, transparency, profits at the heart of everything we do.

For 25 years, Sportradar has maintained regulatory licenses, interisdictions around the world. In order to maintain the respect and trust of our stakeholders, and ensure the long-term mentality of our industry, we continue to conduct our business in a manner consistent with the highest standards. Unfortunately, these factors strive on misinformation and repackaging historical allocations 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 offices to navigating to complex business and regulatory landscape. This morning, we filed the 6-K that speaks to our strong compliance and KYC framework and we encourage investors to read it for additional details. Given our strong conviction in the long-term value of our business, during quarter 1, we repurchased approximately 90 million worth of 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 autoricized $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'm confident in the past, 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 [indiscernible] who will be joining Sportradar as Chief Operating Officer on May 18.

Samir brings extensive experience across sports betting gaming and digital media, including most recently from his time [indiscernible] tan, where he served as Chief Commercial Officer. The executive leadership team and I look forward to partnering with [indiscernible] who will be instrumental in driving our commercial efforts and optimizing our operations.

Now 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 continue 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 add generation enables us to stream more videos than our peers and helps grow our MPS 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 1 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 pad to include official content from the PGA Tour and Europe 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 [indiscernible] and [indiscernible] grand slabs. To continue its strong progress and rapid integration underscore our ability to monetize bordrights 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 '26, 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 plan 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, Sedan and Denmark as well as several U.S. states and Canada.

Now 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 sport radar 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 protection market ecosystem.

Sportradar prediction service 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 promote a shift to life 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.

Now 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 term over which should contribute to our MPS 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 protection markets by leveraging our long-term rights 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 remains 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 multiyear margin expansion that would ultimately matters most free cash flow generation. The value we are creating for our sports media, technology and bedding partners continues to translate into significant top line growth. And 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, Sport Radar generated revenues of $347 million, an increase of $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 bedding technology and solutions products with revenue of $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. sports books.

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 and we fully anticipate exceeding the 25% synergy target we discussed last quarter. Managed Betting 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 $59 million a decrease of 4% year-on-year, predominantly driven by reduced spending on marketing campaigns during the quarter and foreign currency headwinds. We partially offset by media upsells to technology companies and increased contributions from integrity services as we expand our lead 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 $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-on-year to $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 $84 million in the quarter, up 5% year-on-year, predominantly driven by the inclusion of IMG head count 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 focused resources on the most profitable growth opportunities. Adjusted purchase services were $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 $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 $13 million and $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 $6 million versus a profit of $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 $9 million, primarily associated with our U.S. dollar-denominated sports rights versus a gain of $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 $322 million in cash and cash equivalents and no debt outstanding. In the first quarter, the company generated free cash flow of $44 million, an increase of 38% from the first quarter a year ago, and 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 $44 million from the end of 2025 as the strong free cash flow generation was offset primarily by share repurchases of $90 million during the quarter. Our priority with regards to capital allocation remains investing in the long-term growth of the company however, 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 $700 million to bring the total authorization to $1 billion. This quarter, under this expanded authorization, the Board has approved a $250 million enhanced open market repurchase program with purchases to commence when our trading window opens and with the expected completion within approximately 3 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% to 25%, which at current FX rates is expected to be between $1.56 billion and $1.58 billion reported. We expect to drive significant operating leverage on this revenue growth with adjusted EBITDA growth of 34% to 37% on a constant currency basis, which at current FX rates is expected to be $390 million to $400 million reported with approximately 200 to 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 and 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.

[Operator Instructions] Your first question comes from Ryan Sigdahl with Craig Hallum Capital Group.

Good to see positive business momentum despite some of those transitory impacts quarter. I want to start with Marketing Services, just to dig in there because that was where most of the miss was versus ours and I think generally Street expectations. But had 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? And then kind of along that line, reiterating the guidance, but 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 want to do in any given quarter, and they can shift their spending I would say, up to the last minute with regards to when they want to 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. And I think you 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 gaming partners, and we see a significant opportunity to grow this line moving forward. When you think about the guidance for the full year, what we expect, we do expect Marketing Services to grow definitely more in line with what it's done historically, excluding any onetime items. Some of the other things that we look at with regards to guidance for the full year that we are -- 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, 2 would be the continued success that we're seeing with IMG and how it's resonating with our customers. And 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 going to happen in the predominantly back half of the year. So those 3 things give us confidence that we're going to hit our guidance for 2026.

Helpful. And then 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 legal operators. Curious if you're willing to quantify and say with confidence what your revenue mix is for operators in black legal markets -- and then if there would be ways for those operators get for radar data without having a direct relationship with the company? And then kind of lastly, with that, how you think about licensed gray market operators.

Ryan, this is Carsten. The first point is the black market in the gray market. We do not work with black market operators. For the grad market, we have a solid compliance structure in place and we only work with licensed operators. And the measurements, which we apply here is the 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 extra advisers. We take this very, very serious, and we are running a very rigid KYC process, which I think I explained later on. But maybe we jump now to the second part of your question to define what is the pocket sitting in this grain market.

Overall, it is between low single digit to a mid-double-digit -- sorry, it's a low to mid-single-digit number. So to 12%, 13%. That's the range which we have, and we are drilling this down from our operational business. For this, I hand over to Greg that he can give you these numbers.

Sure. Thanks, Carsten. When you think, Ryan, about ultimately our revenues, obviously, we looked at is come up with those numbers at a bottoms-up approach on a client-by-client basis. But 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 2 big buckets. You have the bedding technology and solutions a part of our business and then the sports content, technology and services part of our business. The sports content, technology and services part of the business makes up a little over 20% of our revenues, and that is certainly non-bedding related. When you break down the other 78% of our business in the bedding Technology and Solutions products, betting and gaming content and managed bidding 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 betting services part of our business, the primary exposure from that is from our MTS business. And when you think about kind of the pieces that I just laid out that are exposed to potential great 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 -- and when you do that, the potential exposure gets reduced to somewhere in the mid-30% range. Then on top of that, there's obviously some large global providers that are in there. Would you remove those out of the equation, and you apply what I would say, our public estimates with regards to what great 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.

Your next question comes from Chad Beynon with Macquarie.

Slide 8 was really helpful in terms of outlining the prediction market ecosystem and Craig, you talked about the guidance includes some of that ramp in the back half. And Carsten, you said that there's really good conversations. Is there any other touch points that you can help us with just in terms of thinking about the ramp or which 1 of those constituents FCM, DCM or market makers is the most important and where we could see some activity in the back half.

Chad, this is Carsten. So 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. So there are different needs, exchanges and market makers. We 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. So we develop products, meanwhile, for serving gas. So it 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 towards in 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 MBA, as you know, and enhanced conversations. So 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 then capital services. If you look to the business model, what we are running here, it's pretty similar to online sports betting.

So 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. And then with respect to AI at the Investor Day last year, you guys outlined 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?

We are on both sides. And as told in the last call, the engineering is the prime part of our business. We are 1 of the very first companies to set KPIs for the engineers how they use the front and how they're working with it. It was leading already to a lead time reduction of 20%, and 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, and we are doubling and tripling down to deploy AI and Jenny.

Looking now into finance and legal, the opportunities are really big. So there are really things where we can accelerate client contracting processes for the different regions and we are actively deploying this. We are training our people on a gene. We want them to use a genetic agents. I think that's a job every company has to do. We said we want to be the front runner on this. Within this process, of course, we will see efficiency gains. We changed 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, foresight, the foundation model and the better sans product, which we developed speaking very clearly on the deployment of Gen AI and how we use this already with product. This is continuing and we double and triple down on this front.

Your next call comes from Barry Jonas with Truist.

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.

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. And from a regulatory perspective, we are in contact with some regulators on a very frequent based. 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 this allegation.

That's great. And then just a follow-up question on prediction markets. Given some of the ongoing U.S. state-by-state legal nuances website, do you expect to have any limitations on the offerings for prediction market operators?

Ask 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 and our partners, as you know, can be also online sports betting operators, which are switching into this segment. So we are fully focusing on this, and we try to deliver here at the best quality product.

Your next question comes from Jeff Stanchel with Stifel.

Maybe just starting off on the marketing business. 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 start to deepen relationships with the exchanges now that you 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.

Yes. Listen, I think as Carsten highlighted and thanks for the question, we're still very early days, right? So 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. So I would say there's been some work in that space. certainly not up scale compared to what is our traditional marketing business.

And then shifting over to the report from last week in the 6-K that you filed this morning. So you talked about 3 types of customers, right, direct license B2C, licensed B2B and then noncustomers, but bad actors that are pirating the data illegally. That second cohort, the licensed B2B distributors, I just want to be clear, Clark, 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 that do sell into.

So I would think no. And if the answer is no, can you just help us think about sort of how material those relationships are relative to your overall revenues?

Let me take the overall revenues because that might be a bit confusing before. So on the bridge, which correct it is, I think, pretty clear that the exposure here after looking into the areas of our business is roughly 45% of our business might be subject to exposure. And then Greg said that the U.S. business, which is 1/3 of this, that comes from managed trading services and from data and ads. These are the 2 components which are exposed that 1/3 goes away.

So we are sitting on 30%. And 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 into take a fan due, we substract this and we are coming then down to a number which is low to mid-single digits. 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.

Your next question comes from the line of Shaun Kelley with Bank of America.

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 turnover sounded like it was healthy, but obviously, there was an outcome-driven issue on 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, 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. But 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 going to 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. So I don't have any reason to believe that the historical growth rates will alleviate at some point, you do start to face a lot larger numbers, but the trends of the business are very positive overall, aside from the short-term outcomes.

Okay. And then maybe just a higher level just talk about some of the puts and takes that are in the outlook as it relates to where we stood a quarter ago? And specifically, kind of referring to the cost reduction program you mentioned and then or any incremental uplift for prediction markets or any sort of shift in timing on U.S. growth just as we kind of think about where maybe some of that marketing spend might show up.

So 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? And is that incremental? And then specifically on production markets, is there now a number baked in here that was either bigger or more material than what we had previously.

Sure. So let's break it down a little bit. So 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 it's going to 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. And then IMG is continuing to perform better. We're seeing better cross-sell. We're seeing better upsell from IMG, and that will allow us to do better than our 25% revenue synergies than we originally thought. So when you layer all those things in together, you do get, I would say, revenue 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 going to have less of an impact in the first half of the year and will be more of an impact in the back half of the year, but 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.

Your next question comes from Mike Hickey with Stonex.

Carsten, Craig. Just a quick follow-up on the allegations here. One piece of it was that your sales team was uploading prospects from legal markets, sort of the status for everyone. Can you just specifically address that allegation Carsten and then I got a follow-up on Play Radar.

Mike, can you please repeat the question? So there was a drop out in [indiscernible]

Yes. Sorry about that. The part 1 wrinkle of the allegation was been interviewed or they're acting as prospects, prospect of operators to your sales team at ICE -- and I think you were saying they're from illegal markets and that your team is receptive to that, yes.

So you're speaking about the Sting campaign, which was deployed by us on 1 of our salesperson. Now you need to know IS is a gaming show were around about 60,000 spectators. The team is fully loaded with a lot of meetings. I think we had more than 4,000 meetings on these 2 days or 3 days of files. And this was deliberately done and the sales go a relatively young sales was teased into it.

Of course, we did some interviews with him after this. And we know that he was tech for more than 2 hours and those taking was, of course, not reflecting all his statements. That's the first point. But the second and much more important 1 is this is never a contract. So when the 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 corporate filing and the register, which is in there. Then finally, running this through sanction list, some from all the available markets where we are acting and then it goes to a final review of our legal counsel before a contract is signed.

So this is far off from signing a contract and this flows purpose singing campaign on a relatively young sales employee at ICE. No excuse on this, should not happen, but this was far off from signing a contract or teasing somebody into doing business in our legal markets.

The next question...

Mike we can't hear you.

Yes. Apologies. The last question dropped...

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

The next question is from Trey Bowers with Wells Fargo.

First question, I guess, would just be on the guidance. Well, 2 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 in 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 EBITDA production. And then for the full year, in terms of prediction markets versus kind of traditional OSB -- are you guys seeing that these 2 things are related? Do you feel like the prediction markets are kind of cannibalizing your OSB business and you're going to make up for it with the higher prediction market business. And I'll stop there.

Yes. I'll answer the guidance question, and then I'll turn it over to Carsten, who would talk about the prediction markets versus traditional OSPs. So Trey, obviously, we don't guide from a quarterly basis. We didn't guide to the first quarter, and we're certainly not going to guide to the second quarter -- but 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.

So those 2 things obviously, now have already baked into our results. And when you think about our guidance for the year, we're factoring those in. And 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, I fast in this way, on a prediction market in California or in Texas or in Florida. So that is a big population, which can now get an opinion on a sporty brand and monetize on this. That is principally an expansion of the 10. We might also discuss arise expansion because the age is dropping to 18, that's at the moment what we see. So 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 to get the cannibalization is pretty small here. So looking to this, we see an outpacing TAM. We see an expansion opportunity for us, and this is something which excites us.

And then if I could just follow up. There's 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 more right 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?

Yes, of course, it's an unfounded acquisition. And looking into our partners and the leagues where we monetize 30% of our complete revenue streams this AV predominantly is dedicated to the Tier 1 lakes, our right investment, which we have there, the partnerships and the products which we develop. By the way, AV is in this allocation, I think, no way disputed. So we have a gearing fencing on this. Our partners are telling us where we can pay out AV screens and how we can play out those trends.

So it's in no way that the majority of our revenues and profits are tied to this. This is purely an unfounded allocation.

Your next question comes from Robin Farley with UBS.

Just on the 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? And 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. I'm just trying to get a sense of when we see announcements would certainly be additive to your current guidance levels, just kind of so we can think about what that could mean when we see that announcement.

Well, without putting too much speculation out and Robin. So the tops, 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 but one somehow meets the other. So that's the debate, which we currently do with many, many parties in this space. And of course, we are also in discussions with our partners on the league side which are deploying their 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. And want over maybe to the impact to you, Craig.

Yes. And Robin, what I would add in terms of the magnitude of the impact really depends on what ultimately gets done. And Carsten referenced that we're talking to a variety of players from 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 and gets announced, you could 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 we'll get done here in the short term.

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

Yes. 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, we delivered 11% revenue growth. We indicated that the FX impact to that would have been closer to 16%. Had it not been for FX? And I think that was the biggest, I would call headwinds during the quarter. And a lot of that does fall down to the bottom line. The EBITDA growth would have been certainly larger without the FX.

So other than that, the components that we talked about in the quarter 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.

Our next question comes from the line of Sam Nielsen with JPMorgan.

Just following up on that last of the 5-point FX headwind in the quarter. If I recall correctly from your last call, 1Q is expected to be the largest headwind for the year. So how should we kind of think about the cadence of these FX headwinds as we go through the balance of the year?

Yes. So for the most part, it should take itself out after the second quarter. So if you look at what happened with the FX rates in the 2025 U.S. dollar weakened throughout the year, right? So Certainly, in the third and fourth quarter, you're lapping an already weak U.S. dollar. In the first and second quarter, you were 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.

Makes sense. And then following up on the production markets topic and maybe look kind of broader picture, Obviously, it's early, but wondering if you kind of see a bigger revenue opportunity for Sport Radar in the data and bedding segment or within the advertising segment at maturity?

The clear answer is we see it in both segments. So in the advertising segment, those guys are sitting quite on some fronts that they want to grab market shares. That's a good thing for a provider like us. Same goes now on the downside pressure for online sports betting. So we expect for the World Cup, a material uplift on marketing and investments in this.

So that's a good opportunity for us. But there is a big opportunity on the data and especially on the ultra low latency data server colocations, several, which we are actively following up with the operators.

Operator, we have time for 1 more question.

Your last question comes from the line of Clark Lammin with BTIG.

I've got 2 follow-ups, if I may. Maybe going back to, I guess, third question on some of the KYC detail that you put out this morning, which was -- very helpful. I think in 1 of the passages you talked about the enforcement and verification responsibility essentially being placed on the intermediary. Is it right to think that if something -- if there's a negative event that I guess, impacts revenue for some portion of the sort of 3% to 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? And then Craig, just I guess, another guidance question. You talked about global customer renewals. Could you give us a sense for when you will start to 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.

I will go on the first part. 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, so the data is delivered there, also some of the products. So that's the B2B business. Some of those partners are soft licensing content. They apply a KYC, same like we apply it with highest market standards.

So it can be always happening to Bloomberg, but also to us, but some of this content is stolen and I explained [indiscernible] 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 [indiscernible]

Looking now if everybody knows what it is, but this is a live for sport. That's it. So it's not better functionality. It's an information tool about the score a league table, large score, which is in their or 0.5x core or full-time score. That is what the tracker is transporting. I hope I answered the first part of your question.

Yes. 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. So when you think about our company, about 2/3 of our revenue are fixed fee, 1/3 are variable out of the 2/3 that are fixed. Traditionally, about 1/3 comes up every single year, and it's not obviously on January 1. It comes up throughout the course of the year and 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. So 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. 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 closing remarks, we'll end the call. Thank you.

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

All right. Good morning, everybody. I'm Eric Handler, Media and Entertainment analyst here at ROTH Capital. Very happy to have today with us Craig Felenstein, Chief Financial Officer of Sportradar. Craig, welcome.

Thanks for having me. Appreciate it.

Let's start big picture. Can you talk about your outlook for 2026, key drivers for the year as well as strategic priorities and goals?

Sure. And thank you, everybody, for joining us. So we -- about a year ago, actually almost a year ago to the day, we had our Investor Day. And at that Investor Day, we really laid out what I think is the thesis for the company and the direction of the company, not just for 2026, but also for the next several years.

And really, the focus right now is just acting on that, I would say, strategy. The first part of that strategy is just delivering what I would say is consistent durable revenue growth. And the way we're going to do that is by capitalizing on what we see as an expanding market, and we've done that for years. We've outperformed the market on a regular basis. So first is that opportunity. Second is selling more content and more products to a variety of our customers, so capturing more share of their overall wallet. And we do that by adding content like we did with IMG, which we can talk about later on, but also developing new and innovative products for our customers, which we've been able to do for a consistent basis for a long period of time. Then it's expanding really into adjacent markets, and we'll talk a little bit about some of the announcements we made today around iGaming. But even when you think about things like prediction markets or things like that, those are opportunities for us moving forward. So looking for ways to capitalize on that.

So when you layer all those things in, we said we were going to deliver somewhere in the mid-teens revenue growth over a multiyear period. We're ahead of that based off of the results we delivered in '25. We issued guidance for 2026 of constant currency revenue growth of 23% to 25%. So the revenue, I would say, opportunity continues unabated. When you think about what that means from an EBITDA perspective, we delivered 290 basis points of margin expansion in 2025, and we're going to build on that in 2026. We've guided to another 200 to 225 basis points of margin expansion. And we're confident in that because the cost base of our company is relatively predictable. We have these large sports rights, which are locked in for a multiyear period, no new sports right of scale up for about 5 years.

So we have really good visibility on the cost side of the house from a sports perspective and the overall rest of our cost infrastructure is very much manageable. So we see additional opportunity to go out and deliver additional, what I would say is margin expansion. And the most important part of all this is it's all flowing down to cash flow. Last year, we delivered about 56% of our EBITDA to cash flow, which ended up in our bank account. This year, we said we're going to expand upon that. So all of these things together give us a unique opportunity to grow this year in 2026 and then certainly beyond.

So it's interesting, you have a very consistent predictable fully contracted revenue stream. But a lot of times, we see you act sort of in lockstep with DraftKings or flutter because there's a lot -- always a lot of noise around the monthly handle and hold. How would you characterize the state of U.S. online sports betting as well as international markets? And how does that really impact your business?

Sure. When you think about our revenue, we truly are a geographically diverse company. In actuality, about 70% of our revenue is generated outside the U.S. So when you think about the contracts that we have outside the U.S., the vast majority of those contracts are fixed fee contracts. So they are not open to the -- what I would say is market expansion on a direct basis. We have escalators built into those contracts, and our international business grows at a pretty consistent clip. Domestically, we have about, as I said, about 30% of our revenue here in the United States, and that's broken down amongst a variety of components. But the contracts with the DraftKings and the FanDuel are based off of their revenue, and we get a percentage of their revenue share. So how they do certainly has an impact on how we do. And we are seeing consistent growth here in the U.S. Obviously, it's been a little bit choppy here over the last several months, and there may be some ups and downs. But overall, the U.S. market will only continue to expand. There are new opportunities, as we just talked about a little bit with prediction markets, which I'm sure we'll get into further. But there's a unique opportunity for us to expand our U.S. business. And when you look at the international opportunity and the domestic opportunity and a combined, we see no reason why we can't deliver on the expectations that we laid out a year ago.

Okay. So let's talk about predictive markets. In your last earnings call, predictive markets was described as a positive opportunity that could be worth in the tens of millions of dollars in 2026 and hopefully more as the years go by. We just saw a nice deal with Polymarket and Major League Baseball last week. So how are you -- or how will you be monetizing predictive market companies?

Sure. One of the things that's been noisy in our space right now is that the prediction markets is creating a lot of uncertainty. For us, as an organization, we view it only as an opportunity. Certainly, there are way more players in the prediction markets than they are, for example, in the domestic OSB market, which creates a lot of opportunity just in terms of the number of clients. But each of those clients is very, very different. When you break down the ecosystem of the prediction market, first and foremost, you have the exchanges and the exchanges are going to be looking for certain products and opportunities, whether it be data, whether it be fan acquisition opportunities, whether it be fan engagement opportunities. There's a unique opportunity for us to talk to the exchanges and ultimately provide products to them that will help their entire ecosystem.

Then you have the brokers who sit on top of that. They are looking for a lot of the similar types of products, whether it be fan engagement opportunities, whether it be acquiring customers. And then you have the market makers who are looking for our real-time data. When you think about the data that we provide, we're providing live low latency data with our lead partners to these market makers, which allows us to reduce the risk that they have.

So there's a vast, I would say, array of customers and clients that we can reach out to who we've already started having conversations with, who have already asked us for a lot of these tools and data sets, and we're going to work with them and find out what the right revenue model ultimately is here moving forward.

Last week, you did see an announcement with Major League Baseball and Polymarket to effectively move forward with MLB data across the Polymarket ecosystem. The Major League Baseball included that we are their official data partner as part of that announcement, and we will look to now move forward with Major League Baseball to ultimately monetize their data. And that has really been the only thing that's been holding us back here with regards to the prediction markets over the last several months is we want to continue to work with our sports partners. We have relationships with 400 league partners globally. We only want to do for their data, what they want us to do with their data, and that means partnering with the right people. So we're now working on that model moving forward.

And I believe most importantly, as these leagues form contract with the predictive mark companies, they're actually requiring the predictive market companies to work with you.

Yes. So right now, it's still very early days, obviously, right? But Major League Baseball has partnered with us to move forward with their data, and we'll certainly look for the best ways to monetize that. And they did announce in their release that we are part of their equation as their official data partner. We certainly feel we'll have the same with NHL. We have -- already have the same with the NHL, and we certainly believe we'll have the same with the NBA. So our league partners are working with us to figure out how to monetize their data. They just want to be protective of their data and make sure it's used in the right way, which is appropriate here as we enter a new ecosystem.

And I know it's still early stages, but one of the questions I've always been getting is a bet on a predictive market or, let's say, Kalshi is not apples-to-apples with a bet with -- now on sportsbook like DraftKings. How does that impact how you're contracting with them?

Yes. So right now, we still haven't done a significant deal with a market maker or an exchange for that matter. So all of these will be very different. When you're dealing with an OSB, it's pretty much a contained ecosystem. When you're dealing with the prediction markets, a lot of the opportunities are broken down to most a variety of players. So you're going to have to figure out what works best and what products are warranted for an exchange, for example, and how that product at ask is different for a market maker and then certainly for a broker. So each one of these customers is going to have different needs and wants, and we'll cultivate what I'd say is the right revenue relationship with each of them to make sure it works for us and works for them.

And let's move over now to IMG Arena that closed late last year. With that acquisition, what sort of metrics or synergies are you expecting to achieve over the next -- not only in 2026, but the next several years? And how is that enhancing your offerings for sportsbooks?

Yes. When you think about IMG, it was a very unique deal for us. And for those of you who don't know, we closed on our IMG deal in November of last year. And as part of that deal, we were actually paid to take the rights away from IMG. And that really does speak to the fact that we are the scale leader in the sports data ecosystem. We have relationships with 800 sportsbooks globally, as I mentioned earlier, that allows us to monetize these rights across what I would say is a wide array of relationships. And you already started to see that a little bit in the fourth quarter of 2025. And when you think about 2026, we expect our revenue growth, which was 17% in 2025 to be between 23% and 25% in 2026 on a constant currency basis. A lot of that is due to the fact that we think we can leverage the relationship with IMG content across all of our sportsbook partners that we already have. And that, again, speaks to the scale of who we are.

When we did this deal, there are a few things that had to be done. One was we wanted to make sure it was accretive from a revenue perspective. Two is we wanted to make sure it was accretive from an EBITDA margin perspective. And three is we wanted to make sure it was accretive from a free cash flow perspective. And all of those things are already happening and will, I would say, expand in '26 and potentially in 2027.

When you think about the opportunity, it really comes down to we've had relationships in this ecosystem for 20 years. So we know what our sportsbook partners want. So when we did this transaction and we acquired a bunch of basketball rights, a bunch of tennis rights, a bunch of soccer rights, we know that our sportsbook partners want this type of content. And when we closed the deal in November, we've reached out to everybody and said, we now have it. Are you interested? The response has been very, very positive. We already have seen a significant amount of take-up from our Tier 1 operators, and we expect to continue to build on that in 2026.

Okay. And I guess it does bring up a question as you think about other M&A opportunities for you. Are there still holes in the portfolio that you'd like to fill? Are there areas that you're thinking about for M&A?

When you think about our company, one of the really big positives right now is we have a really strong balance sheet, right? When you think about the fact that we have close to EUR 365 million in cash at the end of the year. We're generating -- we generated EUR 167 million of free cash flow in 2025. We'll certainly expect that to grow in 2026. So there's a significant amount of cash that we have on our balance sheet. There's a significant amount of cash coming in, and we also don't have any debt. There is a -- what I would say is an opportunity to put that cash to work. And when we think about that opportunity, we look at it in a variety of ways. First, we love to invest in our business. We love to invest in the core and build new products and build new opportunities, and we certainly are doing that. Second, we do continue to look for M&A opportunities. When you have the kind of revenue growth that we're generating and the margin expansion that we're delivering and the cash flow that we're generating, any M&A that you're going to do has to fit an additive piece of that equation. It can't be dilutive from any of those perspectives. So it's really hard to find.

All that being said, there is opportunities out there that could augment our technology, it could augment our content, it could augment some of the markets that we offer. So there are opportunities out there, and we will continue to look for them, but we don't have to do a transaction. Right now, when you think about where our stock sits today and ultimately, where we think the ultimate value of our company is, we think the best opportunity for cash today is to actually buy back our own stock. And we've been pretty aggressive in that format over the last several months. Once the IMG deal closed, we've been pretty aggressive overall returning capital to shareholders. We did increase the buyback plan that we have at the company from $300 million to $1 billion pretty aggressively from our Board in the last earnings call. So we do think right now that we'll look at returning capital to shareholders through buybacks is probably the primary use of capital, but we will continue to look for M&A opportunities at the same time.

Right. So sort of leading to this question, I'm going to give you a chance to talk about the value proposition of your stock. This year has been a very challenging year for technology software companies, lots of AI fears, and we could talk about AI and how that's a benefit to your business. But the stock has retraced quite a bit, but your fundamental outlook has actually improved. What do you think is just not being appreciated in the shares right now?

Yes. Listen, I don't think there's things that are not being appreciated as much as I think there's noise in this space, right? And I think that noise creates uncertainty and uncertainty creates questions. But for us, the key is just to reiterate for everybody some of the drivers that we talked about earlier, which is we are the scale leader in the ecosystem. We are vital to that ecosystem. We have 800 sportsbook partners. We have 900 technology and media partners. We have 400 lead partners. We deliver data on over 1 million matches a year. So we are literally the player at the middle of the entire ecosystem that's providing the data to drive the data set. So when you think about that opportunity, just reinforcing to everybody that we are vital to the ecosystem is one. Two is we talked about the cost structure of the company. It's very much manageable, very much predictable. So we know we're going to have margin expansion, and I think that's a unique opportunity. And then the cash flow on top of that. When you layer all those things together with what I would say is the appropriate return of capital to shareholders, it's a pretty unique story. And we could talk about some of the other things that are holding us back from a valuation perspective. But for us, the phrase that I like to use, which is somebody that I used to work for taught me, which is the monotomy of consistent performance is not a bad thing, right? And as much as we want to talk about prediction markets and AI and all the other things that are driving things in the ecosystem today, for us, we're focused on doing what our business does best, which is delivering tools and opportunities to our betting and media partners.

That's great. Let's talk about a new part of the business. Today, you came out with an announcement about iGaming. Can you talk to us about what exactly are you doing in iGaming? Maybe you could sort of size the market and sort of like the road map for growth in iGaming over the next couple of years?

Yes. So we announced today the launch of a new brand called Playradar, which is an offshoot of our Sportradar brand. And we've talked about the fact that iGaming, we think, is a unique opportunity for our company for a while. And Carsten even brought this up at our Investor Day about a year ago. And the reason we think it's a unique opportunity is because of the relationships that we already have in the ecosystem. Those 800 sportsbooks that I mentioned earlier, 70% to 80% of them do have an iGaming component to their business. So why not take advantage of the marrying of the sports opportunity and the iGaming opportunity given where we sit in the ecosystem. When you layer on top of the relationships we have that we deliver 500,000 video streams annually of our product to our sportsbook partners, it provides a platform for us to actually develop product and create value for those sportsbook partners. The iGaming marketplace today, the last number that I saw was something like over $100 billion worth of value in that marketplace. So why should we not take advantage of that? And we'll do that by using some of the data we already have, some of the historical sports data we have, some of the live sports data we have, but also by utilizing those video streams in a way where we can provide what I would say is an opportunity to cross over between iGaming and sports gaming. And there really is nobody else doing that today and where we see it provides that opportunity. So we're really excited about what it looks like moving forward. We are not going to invest a significant ton of money today to make that happen. You're not going to see us lower our overall margins because of this investment, but we'll incrementalize our way in over time, and we think there's a unique opportunity to build value over a multiyear period.

That's great. Now when you think about all the data that you guys have access to every day, what you know about the -- each customer is very significant, has a lot of value. How are you thinking about different ways to monetize it that maybe you're not doing today? You have a competitor that's sort of branching out to sort of branded ad tech capabilities. How are you looking at sort of media services as your business?

Yes. One of the advantages that we have is we've been around and doing this for a really long time. I know in the U.S., this whole business is relatively young, having only legalized about 7 years ago. But when we think about the international markets, we've been doing this for over 20 years. So we have relationships with all of these customers for a really long period of time. So we know what they want. We know what they need. We understand their concerns, their desires. So when we're building product, we're building products for them based off of the conversations we're having with them. And you've seen that on some of the product development that we've had over time, whether it's fan engagement tools, whether it is our MTS business, whether it is dealing with media partners. But one of the areas that is a growth opportunity for us is the ad business, right? We do 2 things today. One is we acquire customers for our sportsbook partners. We've done that for a multiyear period. We'll continue to do that. We've invested in capabilities on both the CRM side, but also on the affiliate side, and we've done a really nice job of acquiring customers for them. We do see an opportunity moving forward to take further advantage of some of the data that we already have in our ecosystem to attract what I would say is non-sportsbook partners to build value for brands that are interested in what I would call a young male demographic. And we're working with some of our lead partners today to find out what data is available so we can partner with some of these larger brands and create additional value for both sides of the equation. And that's where we're going to spend our time and energy.

That's great. One of the things I've always fascinated, you guys have very strong retention with your customers and the ability to keep increasing the amount that these customers are spending on every year basis in the double digits. Can you talk about maybe the life cycle of some of your sportsbook partners, not every sportsbook is created equal, but once you get them in the door and then all the services that you can offer?

Sure. When you think about an evolution of a sportsbook, it's very different sometimes domestically than it is internationally, right? When you think about the products that we have to offer, we offer 80-some-odd products to our customers. But at the core of what we do is the data that we actually provide. We collect it from the various matches, and we provide the data to our clients in a way that they can utilize it either through their odds that they're providing or we can provide the odds for them. But ultimately, that's the core of what we do.

Over time, a lot of these sports books are looking for more, what I would call, engagement opportunities, whether it be AV streams, whether it be fan engagement tools, whether it be managed services, whether it be ultimately working with them on how to ultimately offer more micro markets, whatever it might be, there's a variety of ways that we can deal with our customers. And every one of them is different. So for us, there is not a -- you start at point A and go to point B and go to point C. It literally is -- it's like a menu of opportunities that you can choose from. And as they become more successful, they tend to want more content, they tend to want more products. And as a result, our share of wallet goes up. At the same time for us, we have to continue to build new and innovative products. Recently, on our earnings call, we talked about our basketball foundational model. And what that does is it takes billions of data points that we are able to capture as part of an NBA game and does a better job of predicting what's going to happen next. How many points are going to be scored for this possession? Is this player going to probably score this possession? What is the outcome if player chooses A or chooses B? And when you get a better outcome, ultimately, it lowers the risk for the sportsbook. So developing products like that is ultimately important.

So we have a -- what I would say is a runway ahead of us where we can either sell more of the products we've already developed, which we're doing today, but also selling new products that we are developing through the use of AI or through the use of just our traditional experiences, which allows us to capture more of that wallet. The cherry on top for us, as I mentioned earlier, is a lot of the costs are already locked in, right? We don't have to -- if we build a new product for basketball, we've already paid for those NBA rights. We don't need to pay again. So we're building revenue opportunities on the back of costs that are already spent, and that allows us to increase our margins.

That's great. Since you brought up AI, I guess no conversation would be complete without finishing off with an AI conversation. AI, there's a lot of fears in the marketplace on AI. AI seems very beneficial to you. Can you talk about how you're using AI in your products, why it's beneficial? And are there any competitive fears? Are there disruptions that AI could take place with the business?

Sure. We look at AI much like I think a lot of others look at AI, which is it is really a unique opportunity. When you think about our business, we've been building models using AI for quite some time. So it's not like AI is new to us. AI has always driven a lot of the data collection that we've done, and it will continue to do so moving forward. What it's doing right now is it's actually allowing you to collect more data points than ever before. When you think about -- historically, we've only collected about 50% of our data from computer vision. And we do believe there's an opportunity to take that from the 50% that we do today to closer to 75% to 80% over time. So we'll be able to collect way more data points than we ever could before with computers as opposed to just using Scouts.

Additionally, it provides you way more data points themselves, so you can offer more micro markets. You can offer more unique bets than you ever could because you have those data points. So you're collecting a lot more data through AI. Two is, I just talked a little bit about the product development. You are able to create new and innovative products on the back of these models and the AI technology that allows you to come up with new and innovative ideas. And we are seeing that today across the product portfolio, not just for basketball, but for tennis and soccer, volleyball and so on and so forth. So one is certainly collecting more content, two is certainly product development, and then three for us is certainly customer service. We get hundreds of thousands of requests every year for what I would call data insights. Now a lot of that is being handled by AI. So you combine that with what you can do on the finance and the legal and the HR side, all of those things mean your costs will come in a little bit lower. You'll have much more data to deal with. And overall, it will generate a whole lot of positive for the business.

And more free cash flow.

We like cash flow.

All right. Craig, thank you so much. It's been very helpful.

Thank you.

Ladies and gentlemen, thank you for joining us, and welcome to Sportradar Group's Fourth Quarter Earnings Call. [Operator Instructions].

I will now hand the conference over to Jim Bombassei, Senior Vice President of Investor Relations and Corporate Finance. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us for Sportradar'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 1 question and 1 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.

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 to 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. And now I'll turn the call over to Carsten.

Good morning, everyone, and 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 delivered over the last several years and sets us up for a 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 radio 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. Greg 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 add for further expansion. We also continued to deliver increasing levels of free cash flow as we expire 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 USD 300 million to a total of USD 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 strength 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 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 1 partners having already signed on the IMG data adds 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 micromarkets plate props and the virtual life 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 ops generation help scale our video streams and grow our MTS trading liquidity. In addition to acquire over 70 sports rights in 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. And 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 sports fans and we lead the shift toward more personalized and interactive experience.

We know sports fans and their behavior better than anybody, thanks to our unique data points that we collect, and we are continually looking for new ways to engage them and enhance the experience. That's why we recently upgraded our Foresight streaming product to deliver deeper storytelling and contextual data visualizations.

Last quarter, we talked about one of the most exciting reason AI breakthroughs. The development of a generative foundation model for basketball, the first of its kind in sports. The model is based on a large transformer architecture, which trades using billions of 3D body post data points from thousands of NBA games. Allowing the model to understand player movements, decision-making and flow at an unpreceded level of detail. This foundation model powered predictive insights in real time, and 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 -- streamed just 2 years ago. And in 2026, we anticipate to stream 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 our 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 & 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 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 rate reviews from sport fans given them real time, that's that break down the game, including where a player is most likely to score from NEXT. And we recently announced a partnership with NBC's regional sports 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 replaced and customized Atlantic to enhance the live game coverage and experience. Gen AI companies are turning to our data and media APIs to power their sports experiences. We have secured agreements with a number of the gen AI leaders to provide their users with deeper insights and real-time updates, we are uniquely positioned to capitalize as the B2B leader in our industry. with our premium sport rights portfolio and unmatched product suite.

The prediction markets expand the sports TAM by opening up the U.S. market and is 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 protection market agreement. We are uniquely positioned to unlock meaningful commercial value. We have the ability to power this market end to end with our loan agency 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 OSP 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 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 suites 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 teens compared to the last World Cup and over 100 matches with 200 live markets, 200 prematched markets and as well as player props and micro markets volumes should easily exceed USD 35 billion of turnover in the last World Cup. And with new avenues for growth emerging, including protection 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 relentlessly about creating value for our partners and customers. At the uptake of our products and services is a clear demonstration that our investment in content, technology and product integration are paying off. Our unique position as a supplier and innovator is unmatched, and we can be more excited about the future.

Thank you. I will now turn 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, Sport Radar 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 bedding partners is translating into sustained top line growth. And 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 2 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 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 bedding 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. And 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 1 expectations with regards to the 3-year targets we laid out at Investor Day and we expect to build on this momentum in 2026.

Turning to the fourth quarter. Sportradar 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 Bedding 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 customers consuming IMG content, integration of IMG content into Sportradar's brought our product suite and the sale of additional sport radar content to IMG customers.

Managed Betting Services grew 5% in Q4, 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 onetime installation fees a year ago.

Moving to our other product group. Sports content, technology and services delivered revenues of $63 million increasing 5% year-on-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-on-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 and 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, audiovisual 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 and 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-on-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-on-year, driven primarily by IMG costs and, to a lesser extent, increased head count 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-brutine 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 2 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% to 25% on a constant currency basis as we outperformed 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. And as a result, we anticipate revenue of $1.56 billion to $1.58 billion. We anticipate delivering significant operating leverage on this revenue growth and the forecast adjusted EBITDA growth to be in the range of 34% to 37% on a constant currency basis. After factoring in foreign currency headwinds, we anticipate adjusted EBITDA of $390 million to $400 million and approximately 200 to 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 Q2 and Q3 of this year. Additionally, given the weakening of the U.S. dollar throughout 2025, and at current currency rates, the FX headwinds will be most significant in Q1 and to a lesser extent, Q2.

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 and 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. And now Carsten and I will be happy to answer any questions you may have.

[Operator Instructions]. Your first question comes from the line of Ryan Sigdahl with Craig-Hallum Capital Group.

Good day, Carsten, Craig. Congrats on the strong business momentum and financials. I want to start with IMG Arena. It's now been 4 months since the close of endeavors gift of that rights portfolio to you guys plus in cash. I know you mentioned trending ahead of the medium-term financial targets. Curious if that's IMG that's contributing to that or the core business? And then you also mentioned good strong synergy realization thus far. But curious if you can elaborate on specifically kind of how those conversations are going, if there's anything positive, negative? Anything you've learned now that the deal is closed.

Ryan, Carsten here. I like this term of gift. So well, there is a hard work in the kit. We have a very capable team on this, and we are working now since many months -- and this work is paying off. So we hit the ground running. All the Tier 1 operators are now converted to this content. And 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. So comparing it from IMG from 50, 60 operators for us with about 600 operators or 800. If we extend that scope and we have products based on this content. Most of those products have been not able -- or IMG was not able to distribute them, managed trading services, visualization products, et cetera -- so 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. So we measure the revenue how much can be achieved here by this bigger engine and to more products. And that's the second part of your question. We are a little bit ahead of the target. The target is and we gave the number of $140 million already earlier, which includes that 25% revenue synergies. I hope that answers your question.

Yes. Helpful. Second question, just it wouldn't be a conference call if prediction markets wasn't asked about. So Chairman [ Selig ], he's 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 guys have done very well on the integrity side of signing deals thus far. Curious what you need to happen and kind of the next steps to get more direct partnerships on the data side for you guys in the prediction markets?

I just lost my bet, Ryan with Craig. The bet was -- this is the first question for today with prediction market. So Craig has something good on my side. Look, there is -- we are working here on a clear scheme. We always said the 2 things, which are most important is 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 corporations there. So 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. And of course, we are happy to contribute with our knowledge to make the sport safer and also with the protection markets to install safeguards, which are requested and demanded by sports.

Now from our player protection side, we can't do this. So that's about underage gaming, money laundering, insider trading, all these topics, which are relevant and which are important. Sport is caring about this, and we have now 3 of our partners, NHL, Major League Soccer and UFC, which established a framework with the exchanges. So that enables us from the next couple of weeks onwards that we can supply the official data, and that is our scheme.

So if our partner find a satisfying framework, homeplace protection and integrity where we heavily contribute we are ready to deploy the official data. And if we are looking now a little bit deeper here, there are 2 things. There's the exchange and there is the market maker. Maybe I get another question about the market makers, where I'm happy to go a little bit deeper, but that's the general scheme to answer your question.

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

Okay. Sorry about that. So just thinking about the guidance for '26, it's kind of what you laid out last quarter, some small moves in the fourth quarter with betting technology and solutions versus the sports content. But as we think about the guide for this year versus how you're thinking about this before, given what we've heard from some of your partners out there, has there been any changes just given some of the reduction in volume that we've seen out there and differences in hold rates just as you think of the makeup of how you get to that revenue guidance.

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 wouldn't 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. And because of that, the reported numbers get hit a little bit from a guidance perspective. But in terms of the business itself, the business continues to operate exactly as we planned when we reported our results in the third quarter.

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

So from an eye giving perspective, like we laid out, we choose Brazil as our test market. And the thesis here is how can we connect live betting and live valuing activities and iGaming. We believe this is a huge plan field and a big opportunity for us. in live betting, we know about the latency. We know about who is sitting on the ore side because we have our e-player installed on more than 600 betting sites. Nothing easier than this to match now the live content on the player together with something which is visualizing the high gaming opportunity. Let's make this very simple.

Our new partner, PJ. We had our Board meeting there last week. And we discussed solutions like it was in KPC saw bras. If you're a bot, you know who #17, put a Hexagon grid over this #17, you have 36 fields and they reflect the green bot. And then you can visually overlay to the live broadcast this iGaming opportunity. This is something which we promoted now first time in Barcelona Ice. That's the biggest gaming show and the pickup was enormous on this. And this is exactly the opportunity which we pick because we see we have the distribution, we have the high player. We have the live scores. We have to match trackers on the book metasite and we can connect this and convert. And like we all know and like we see it in the handle numbers, a client gets roughly around about 4x the value for an iGaming player comparing it to a sports better, but 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's the scale.

Your next question comes from the line of Shaun Kelley with Bank of America. [Operator Instructions].

Great. Really appreciate it. Carsten, you gave a little bit of a teaser around the prediction market to maybe to go a little deeper. I think as we think about the different opportunities here. We kind of think about a broker layer and exchange layer, as you kind of alluded to in a market maker layer. Could just had a few months to work on it and starting to talk to partnerships or partners in this space. Could you just talk to us a little bit more clearly about how you would maybe see your envision Sportradar, participating at kind of each of those 3 layers. I think that would be really helpful for everyone.

Sean, Carsten here. So the real interesting thing is the life development in that sector. in-play parties, live opportunities that needs real-time data. And like we all know, this is where we can monetize best with the real-time data. So 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. And even more at the real gold is, can we predict the next movement better than anybody else, and we can because we are sitting on this huge knowledge. We're sitting on the liquidity, and we're sitting on the deep data in real time. So our investment here, for example, in the foundation model where we can predict the next pixel or the next pixel, and we do this now 7 seconds for an MBA batch is super helpful to predict potential modes and to underlie them with liquidity. That's exactly what speaks to what is.

So 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 put these foreign exchanges. But of course, we can do this also with the deeper data for the market mix. For both, we are aiming to strike the revenue share model are based on the take rate. We have, at the moment, the negotiations around the 3 properties where we got the clearing from the legs that NGL, Major League Soccer and UFC. And like I said, you will be very soon hear about some deals in that space.

Super encouraging. And then if I could, just as my follow-up, Carsten, there's a big NBA event host, I think, on the front end of the All-Star Game weekend. And obviously, they're a huge partner of yours, and I think you were there as well as a bunch of other -- just any kind of key takeaways because it was quite interesting that a couple of the prediction market platforms were kind of were present at that, but we kind of are curious on what was the league's message kind of back to you or to other constituents as it relates to maybe sort of technology developments because it sounds like it was quite interesting.

Yes. I heard from this panel with 8 players. And on the Swiss guy on the panel was trying to moderate to temper, will heat up a little bit on the panel. I think it shows how big the opportunity is. And I think the whole panel, which was catching -- market, the founders, we had, of course -- drafting sitting on there and gem. So the whole panel was agreeing this is a huge opportunity, but we all agreed finally, we need to put the readouts in place to protect the players and integrity. That is uniting everybody. The rest is kind of controversial, but it's about pork and sport need to pave the way. And I think that was then the final conclusion from the panel saying, we all want to help support. We see an uplift opportunity and sport by itself and the NBA by itself, I think they are pretty positive once there is the plate protection and the integrity put in place. We see already 3 other leagues, which have been granting us the right that we can sell the official data and the products to the downstream market.

Your next question comes from the line of Robin Farley with UBS. [Operator Instructions].

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

Sure. So Robin, it's 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, but for the most part, any significant deal associated with production markets is not included in that guidance.

Okay. Great. And then my other question, and I apologize if this had a computing earnings call. So if you covered this already. You can go ahead to the next question. But just with the IMG Arena contribution that you officially closed in Q4, did you indicate you mentioned you're able to sell that data to many more operators than I had. Is there a ramp -- does that take time? Or is that something you're pretty much able to do like that's now going into all those additional sports books by now? Or is that something we would expect to ramp through the year, again, sorry, if you covered that already.

Robin, yes, you guessed it, right. We covered this already. So next time, we have to look that you have no conflicting costs at the time and we have to it. But to go a little bit deeper, the main important 1 was for us in the first 2 months, so November and December, of the last year that we get the Tier 1 operators on the content.

Of course, we are enabled for a grace period to services that everybody can test this and that was very successful. So this plan and the execution here to get very quickly a pickup that 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 continue to build on this, but that was very successful.

Your next question comes from the line of Barry Jonas with Truist Securities. [Operator Instructions].

Okay. Great. Your closest competitor announced a large-scale M&A transaction recently. Did you look at that deal? And maybe how are you thinking about M&A in general here?

We are constantly looking that we have 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 problematic advertising opportunities, which we see around this iGaming is such an opportunity. And of course, we're looking into it. We are looking are 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? And are we deciding on this. And in this case, I think the answer is clear. We didn't do it here. We believe that at the moment, it's the best for the capital which we have to increase our buyback.

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

First, let's hope that Rob is solving the lockout issue and that the part is coming to term that we see a nice gentle start of the baseball season. I think we all hope for this. If it's not happening, for us, the first thing is, do we have, at this time, good replacement content in the Tier 1 category. And we do. So we have -- we have the WNBA. We have a lot of ATP matches, which can cover that gap which we have with missing MOB matches. And of course, we have contract provisions and protections in place for this situation. Still, we all hope in favor of the sport that it doesn't happen for us, the impact will be very limited if there is an impact.

Next question comes from the line of Jordan Bender. [Operator Instructions].

Thanks for the question. Look in the guidance, it looks like your operating leverage or your flow-through does kind of pull back in '26 or the implied number. Is there any incremental investment that's going into IMG? Or is there anything that you can kind of help us both here unpack just some of those dynamics at play?

Sure. Thanks, Jordan. So a couple of things with regards to EBITDA flow-through when you look at 2026 versus 2025. First and foremost, the biggest reason for the, what I would say, is lower flow-through is that we are now fully incorporating IMG as if it's new revenue, right? And that revenue comes at what I would say is a margin that's higher than our base margin, but lower than our incremental margins, right? So the incremental margins of our base business are well over and the actual margins that we're taking IMG in are closer to our, I would say, base business margin, which is some place in the mid-20% range. So 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 I would say, move into the first quarter and some of which, which won't repeat. So you had things like a 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. So it really comes down to a timing issue more than anything else. And when you look at the 450 basis points of margin expansion that we delivered in the fourth quarter, that's primarily the driver of why the margin expansion in 2026 is a little bit less.

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

Sure, Jordan. So Carsten could add a little bit more here if he wants. But when you think about how we buy back our shares, we predominantly buy back according to a grid. We've done that historically. We are opportunistic on top of that, like we were with our secondary buyback in the middle of last year, but 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. And given where the stock is today versus the value that we're 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.

To add maybe from Carsten. Yes, I think 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 Lambe with BTIG. [Operator Instructions].

Okay. Perfect. Maybe, I guess, just first question, sort of a point of clarification. Carsten for the lead partners that haven't yet granted you the right to explore or strike partnerships with some of the prediction constituents that were mentioned already. is the hurdle consideration set any different than we talked about so far last quarter. And today, you highlighted the regulatory aspect of this. I'm just curious if, I guess, for some of the partners that you didn't mention earlier, whether they're looking for something different or maybe their review process is just a little bit more stringent. Any clarification that you can provide would be appreciated.

And 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'm just curious if you could provide a little bit more sort of 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 that, I guess, moved at all?

Good. So looking now to our partners. So we're speaking here MBA. Speaking Major League Baseball, we might be PGA, they all have a different view and a different approach here. But it is centered around hurdle 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. But we have an official partnership and it's about officially. So 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 grow 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. So that is something exciting for us on R&D side, and we use this time to get ready.

We have now 3 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 play a main role in there. And 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 tenancies. And where we have things we have now 39 or 40 states, including DC, which have a regulatory framework, and they have a position on this, as we all know. So therefore, I think it is good for all of us, and we are valid wise to put 2 things in focus, how to protect the player and how to protect the game and the players of the game. So that's those things, but 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 product based on this data, which are even more exciting.

Looking now to IMG, the uplift, the revenue synergies. That's broadly. So we have significantly more clients for the live data, we have the same for the AV feeds. And of course, we put it into our products, the visualizations, the managed trading services. So there is not a specific product. It is broadly over the space that we see those revenue synergies.

Your next question comes from the line of Jeff Stantial with Stifel. [Operator Instructions].

Craig. Maybe starting off on AI, which has obviously been a hot topic this quarter and we haven't touched on yet in the Q&A. So Carsten, I'm 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. But if you look at some of the other verticals, managed trading, streaming, marketing. Can you just give us some thoughts on how you see the value in distribution and bundling and 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 lines continue to get better? Just any sort of high-level strategic thoughts there would be helpful.

To keep it with Steve Balmer very short, I was witnessing him live on stage. He said to the auditorium from you guys will be redundant in 18 months this time, and he loved about this the way out Steve is loving. But there is a really revolution ongoing, and I'm very happy that we are prepared since 3 years on this. So we are applying this massively. We acquired the best brands available from Google for the topic AI and gen AI. And I split this in 2 pieces this year. On the internal road map, 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 significantly uplift on those numbers.

The second focus area is operation. Why should the human being not be replaced by -- from us program the AI agent if the data is there, if computer vision is there and video is there. There's no reason for it. So we are already on 50% of our content produced with our own agents, which are working on computer vision to extract that information hands of thousands of more data points per match depending on the sport, which is in there. So these are the 2 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's a big, big benefit, statical KPIs is something which is from yesterday, you're going to need to adapt to the market. You need to understand what is in the market. And how does that compare to the interim KPIs and numbers. So these are areas which are not the top priority, but we are working very hard on this. engineering operations on the top internally.

Externally, the really exciting thing is what can we do with all the data points and the deep data which we have. And for this, we started now the foundation model for basketball. And what it is, is -- we see in this foundation model because we feed the tracking data into this, and that's billions of data points. When the -- for example, doing a no look pass. So we see is looking up, down, left, right the human being can't 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 7 seconds with a high probability from where is the points court. Imagine how cool this thing is for coaching applications, but imagine how cool it is for market makers who have that etch to predict what is the protection next move and underlying it was liquidity. So this is exciting stuff, and that's not possible with AI. I could speak hours about this, but these are the main sectors where we are looking at.

That's really helpful. And then for a follow-up, maybe turning over to Craig. So you gave some commentary on quarterly cadence for 2026, which I think was helpful. I want to drill a little bit further and really focus on both top line and cost synergies for IMG. Can you just talk about a little bit how you see the phasing of that benefit going through 2026. And then if we look sort of to back half exiting into 2027, should we think about sort of late 2026 as a reasonable go-forward run rate? Is there still more to come that would flow through in 2027? Just anything to sort of help about the phasing as you go through the year on both top line and cost synergies would be helpful.

Sure. Thanks, Jeff. Appreciate the question. So when you think about the IMG synergies on the revenue side, as Carsten mentioned, we're well on our way with regards to the outreach that we've 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 2 things. First and foremost, the timing of games and matches, right? There's less content for use in the first quarter than there is, let's say, in the second or third quarter of the type of content that we acquired. So there'll be a little bit of phasing related to that. And then 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. So you should see definitely, I would say, the revenue predominantly in Q2 and Q3 from a benefit perspective, but there will be some benefit in Q1 as well.

With regards to revenue in '27 before I turn to costs, the '27 synergies will predominantly look at which content we maintain from an IMG perspective. Obviously, from an IMG portfolio perspective, there's some content there that we want to keep. There's some content there that we may not want to keep. So the revenue opportunity will really depend on the, I would say, quantity and quality of the revenue that we're maintaining. Our customers at the end of '26 should be all lined up and ready to go. So it would be more about the content that we decide to keep.

With regard to the cost side of the house, the cost side will be more phased, right? So you'll see that kind of 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. And then certainly, we expect to continue to build on that in 2027 as we manage this as, I would say, a combined business. You got to remember what we're buying here is effectively content and we're managing this as a combined entity, and you'll see that kind of plays off out over '26 and '27.

Operator, we have time for 1 more question.

Your last question for today comes from the line of Bernie McTernan with Needham. [Operator Instructions].

Great. Carsten, just wanted to ask a broad one for you. I think we all just went through an earnings cycle with DraftKings and -- we significantly lowered our growth expectations for the companies. Just wanted to get your outlook on the U.S. market. Can this still be a major growth driver for Sport radar relative to the rest of the world? And maybe breaking that down on just the regulated OSB product versus prediction markets.

Thanks for giving me this opportunity, Bernie, to look a bit to the broader picture. If I'm looking from a Sportradar lens on the broader picture, revenues are outside of the U.S. This is a well-oiled machine. It's global. We have the global strength and power in the distribution, and we deliver the results here.

Looking now to the remaining 30%, 2/3 of it roughly is bedding in the U.S. And from this, we see at the moment anything between 15% to 30% and somehow influenced by prediction markets. What we hear from our partners, and that's now the fan here is the DraftKings, the fanatics of this group, they see little or no cannibalization between the 2 things, prediction market and online sports betting. So if you ask me now from a spot rate perspective, we expect an uplift opportunity in the tens of millions, not in the hundreds of millions from prediction markets. But 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.

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

Sure. So 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. So I would say there is definitely some a 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 think the -- I wouldn't say that they're baked into 2026. But I would say that we -- they're easier to identify. We know exactly the cost savings that we want to get from all the major cost buckets, whether it be scanning costs, whether it be headcount costs, whether it be general facilities, whether it be IT, whatever it might be, we've identified what we want to do on that front, and we're going to roll it out throughout 2026. And then 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. And we have said previously that we expect the IMG contribution to be margin accretive to the overall results from Sportradar in '26 and beyond, and that's 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. Now we'll turn it back to the operator.

This does conclude today's call. Thank you all for attending. You may now disconnect.

Ladies and gentlemen, thank you for joining us, and welcome to Sportradar Group's Third Quarter Earnings Call. [Operator Instructions] I will now hand the conference over to Jim Bombassei, Senior Vice President, Investor Relations and Corporate Finance. Jim, please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us for Sportradar's earnings call for the third quarter 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 today 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.

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 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 to the most directly comparable IFRS financial measure without unreasonable efforts.

Joining me for today's call are Carsten Koerl, our CEO; and Craig Felenstein, our CFO. And now I'll turn the call over to Carsten.

Good morning, everyone, and thank you for joining us today. I'm pleased to announce another quarter of strong execution and performance. Our results further underscore our scale and position as a mission-critical partner deeply embedded in the global sports ecosystem. We achieved record quarter 3 revenues of EUR 292 million and strong flow-through with 29% growth in adjusted EBITDA and a record adjusted EBITDA margin of 29%. So far, this year, we have generated EUR 149 million of free cash flow, representing very strong conversion of 72%. In addition, we are raising our full year '25 guidance with the closing of our IMG Arena acquisition and providing our initial thoughts for '26. underscoring our accelerating growth and value creation. Given the strong momentum we see going forward and the opportunity to create significant shareholder value, our Board of Directors authorized increasing our share repurchase program by EUR 100 million, raising the total program to a size of EUR 300 million.

As we discussed at our Investor Day, we are uniquely positioned to capitalize on the rapid expansion of the global sports betting market, given our scale and the depth and breadth of our content, we are driving higher take rates by growing our products and content, penetrating across our loyal client base as we continue to accelerate innovation and bring next-generation products to the market. IMG Arena fits squarely into this growth strategy. First, we would like to welcome our new colleagues and partners from around the world. IMG Arena is a highly strategic acquisition, which aligns with our core business and will fuel our next leg of growth. It further strengthens the competitive position as the scaled leader at the intersection of sports, media and betting, bringing a wealth of premium content and complements and enhances our already robust global portfolio and capabilities.

As a reminder, this transaction is unique in that we are not making any payments to Endeavor, but instead are benefiting from financial consideration totaling approximately EUR 225 million. This acquisition is expected to accelerate our growth while being accretive to our adjusted EBITDA margins and free cash flow from conversion, which Craig will provide more details on shortly. This deal makes a major milestones and create significant additional opportunities for our company, enhancing our content distribution and further fueling product development. We will seamlessly integrate and monetize these rights across our highly scalable technology platform and client network, encompassing strategic relationships with over 70 rights holders, approximately 70% of these rights are spread across the 3 most betting sports, soccer, tennis and basketball. This acquisition helps fueling our flywheel, adding more must-have content and data, which in turn powers more as generation, grows NPS trading liquidity and scales our video streams. Our teams have been hard at work and now that we have closed on the deal, they have hit the ground running to manage a smooth integration and maximize revenue synergies in both the short and the long-term. While some synergies will be realized quickly, others might take more time to fully realize.

When it comes to global sports coverage, we are the clear leader, and this is further enhanced with IMG. With a portfolio of over 1 million matches annually, our major partnerships are locked in long-term, providing us with a great visibility on our right costs. We just completed the first season of our extended and expanded partnership with Major League Baseball, and we saw strong performance for the season with revenues exceeding original projections. We recently renewed and extended our deal with the Spanish Football Federation to sell the international media rights for the Spanish Super Cup until 2032. This agreement ensures we keep control of global broadcast sales for the tournament well into the next decade and gives us continuing as the Spanish Football Federation exclusive international media rights partner. As we fine-tune our leading rights portfolio, we continue to drive innovation across our business, creating more cross-selling and upselling opportunities with our clients and partners.

In terms of product development, we are leading to shift towards more personalized and interactive experiences. We are delivering next-generation products that shape how fans view bet and connect with the player on the field. A great example of how we are doing this is through our deepening partnership with the NBA. 4Sight Streaming, first introduced last season, has been upgraded with new features, including live shot probability, enhanced motion graphics and real-time player highlights. These updates deliver deeper storytelling and more contextual data-rich visualizations that boost engagement.

One of our most exciting recent AI breakthroughs is the development of a generative foundation model for basketball, a first of its kind in sport. The model is based on a large transformer architecture, which we trained using billions of 3D body post data points from thousands of NBA matches, allowing the model to understand player movement, decision-making and game flow-through at an unprecedented level of details. This foundation model now powers predictive insights in real time, such as the expected points in the current possession, probability of the ball handler scoring in the next few seconds or how each player actions affect the teams' points per possession. These insights enhance our 4Sight Streaming product, bringing richer, more interactive visualizations to live broadcasters. In addition, this technology opened new frontiers in coaching and performance analytics, quantifying the value of every past block and shot. We see this foundation model powering our next generation of products, including coaching and scouting analytics, realistic simulating betting products, advanced visualizations for media and broadcast and more advanced AI engines for sport video games.

Now turning to our managed trading services. This product continues to be a differentiator for us and a key value proposition for our clients. Turnover for the quarter was up 25% year-over-year. And on a trailing 12-month basis, we managed approximately EUR 48 billion on behalf of our clients, 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 over 11% for our clients during the quarter. Given the scale of our trading volume and the number of betting tickets we are managing, this gives us a clear competitive advantage, enabling us to better manage risk than the major operators. In 2026, this client group will be a clear focus for upselling and cross-selling our MTS capabilities.

We also continue to make significant progress in our marketing services business. In particular, our ads business delivered record volumes on our DSP this quarter, reflecting growth demanding for our data-driven advertising solutions. We saw robust performance across multiple channels, including our affiliate business, underscoring the strong ROI of our campaigns and the scalability of our marketing platform. As discussed last quarter, we are seeing a clear trend in today's fragmented media environment with clients increasingly turning to Sportradar to enhance fan engagement across mobile streaming and connected TV platforms. Betting is no longer viewed as a stand-alone experience, but instead as an integral part of how fans engage with sport. As fan behavior becomes more interactive and sports viewership continues through transition from linear to digital and mobile streaming, our media and technology clients are looking to leverage our capabilities to drive deeper engagement and greater value across multiple channels.

We have recently signed deals with a number of media platforms, including leading U.S. regional sports networks and several top national broadcasters to integrate our data APIs, streaming products and advanced analytics, delivering deeper storytelling and more contextual data-rich visualizations that boost engagement. As an example of this in our new partnership with DAZN, the global sports entertainment platform offering live and on-demand coverage across a wide range of sports and leagues. This deal makes another milestone in scaling our media business globally as we now provide DAZN the data and broadcast services across soccer, basketball, tennis, golf, American football and baseball. Our technology will power on-screen graphics, deliver real-time stats and elevate storytelling across DAZN's platforms. We also have extended and expanded our partnerships with Google and Yahoo!, providing live game day sports analytics for Google and expanding our relationships as a primary provider for sports data for both Yahoo Sports and Yahoo Fantasy.

And we are excited about the customized version of our 4Sight technology we developed together with NBC for Peacock called Performance View. Debiting last night for Peacock streamed NBA games, Performance View gives fans a new way to experience the action. Performance View adds on-screen layer of data that illustrates deep analytics such as where a player is likely to score from next, helping fans understand what might happen before it occurs on the call.

Now switching to a topic that has been on investor minds recently, I will touch on prediction markets. We saw prediction markets emerge in sports betting nearly 25 years ago, but their share has been limited historically given the low liquidity and the challenge pricing more complex bets, including in-game wages. The emerging market situation in the U.S. is a bit different given the current uncertainty regarding state versus federal regulation. We have seen recent moves made by certain of our league partners and clients, and we are in active discussions with them. We will work closely with our partners and clients while ensuring that we comply with applicable laws and regulatory requirements. Should the market continue to develop in the way that aligns with those standards, we see the potential for prediction markets to complement our existing business and create incremental opportunity for Sportradar.

In closing, we are excited about the continued momentum we are seeing in our business and the significant strides we are making leveraging our technology and capabilities to lead the industry. Our global scale, which will be further enhanced with IMG Arena, provides us with an opportunity to continue to innovate and drive value creation. We are confident in our growth strategy and the significant opportunities that lie ahead, and we remain laser-focused on driving long-term value for our clients, partners and shareholders.

Thank you. And I will now turn over to Craig, who will discuss our financial results in greater detail.

Thanks, Carsten, and thank you, everyone, for joining us this morning. Sportradar's strong third quarter results once again demonstrate the value of the unique position we have built at the intersection of the sports, media and betting industries. The relationships we have developed and nurtured with clients and partners over more than 2 decades is driving durable and consistent revenue growth. And when combined with our stable and predictable cost base, we are generating record adjusted EBITDA margins and significant free cash flow. Sportradar is leveraging our best-in-class product suite across our leading global distribution network to deliver increasing value to our league, media and sportsbook partners. And as Carsten mentioned, the closing of the IMG Arena acquisition further strengthens our competitive position as the mission-critical partner to the sports industry. I will provide more color on the expected contribution from IMG later in my remarks as it accelerates our growth while being accretive to our margin and cash flow profile.

Turning to the quarter. Sportradar delivered revenues of EUR 292 million, an increase of EUR 37 million or 14% as compared with the third quarter a year ago. This growth was driven by higher uptake from our existing partners, continued strong U.S. market growth and strong trading results from our managed trading services business. We continue to outperform market growth by deepening our client relationships through cross-selling and upselling our diverse portfolio of offerings as demonstrated by our customer net retention rate of 114%. As we have discussed previously, foreign currency movements, most notably due to the U.S. dollar relative to the EUR o, continue to be a headwind and revenue growth in the third quarter would have been 17% on a constant currency basis.

Looking at the individual product groupings, we delivered broad-based growth across both our betting technology and solutions products as well as our sports content, technology and services. Betting technology and solutions revenue of EUR 233 million grew 11% versus the third quarter a year ago, primarily driven by 19% growth in managed betting services, led by the sustained momentum at managed trading services from increased turnover with higher volumes from our existing customer base and trading activity from new clients as well as increased overall trading margins. Betting and gaming content delivered 8% growth during the quarter despite foreign currency headwinds, including sustained momentum in our streaming and betting engagement products due to growth in audiovisual revenues from both existing and new customers. Odds and live data products also continued to perform well, led by additional client uptake and continued U.S. market expansion.

Turning to our other product group. Sports content, technology and services delivered strong results this past quarter, with revenues of EUR 59 million, increasing 31% year-on-year. Growth was led by marketing and media services, which was up 33%, primarily from increased uptake from existing and new technology and media customers and from contributions related to our expanded affiliate marketing capabilities. Contributions from integrity services more than doubled due to the uptake of products and services from our lead partners, and we delivered 10% growth versus a year ago from sports performance due primarily to price increases. Geographically, our growth continues to be broad-based with U.S. revenue up 21% and Rest of World revenue up 13% in the third quarter. U.S. revenues were 23% of our revenue mix as we continue to capitalize on the continued rapid market growth and the growing demand for our breadth of content and innovative product solutions. Aside from the impact of foreign currency on U.S. revenue, please note that our U.S. revenue mix is typically lowest in the third quarter due to the NBA and NHL off seasons.

The strong revenue growth across our product portfolio translated into significant adjusted EBITDA growth in the third quarter with adjusted EBITDA of EUR 85 million, increasing 29% year-on-year. Our continued focus on cost efficiencies, combined with our predictable and stable sports rights costs enabled us to deliver significant operating leverage with our adjusted EBITDA margin expanding over 300 basis points year-on-year to a record 29% as we continue to be diligent across our cost infrastructure. Looking at the individual cost buckets this past quarter; 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 15% year-on-year to EUR 73 million, due primarily to the continued success of our ATP content as well as our renewed Major League Baseball partnership. We will remain disciplined and strategic with regards to any additional rights we acquire. And with all of our major rights deals locked in the long-term, including the majority of the premium rights we have acquired from IMG, 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 portfolio and the premium products we have developed for our global customer base.

Turning to people. Adjusted personnel expenses were EUR 72 million in the quarter, up only 4% year-on-year, driven primarily by increased headcount to support growth opportunities. Importantly, our adjusted personnel expenses continued to decline as a percentage of revenue, down 260 basis points versus Q3 last year as we closely manage headcount to ensure we are focusing our talent and resources on the most profitable growth opportunities while unlocking additional operating leverage. Adjusted purchase services were EUR 42 million in the quarter, up 14% year-on-year, primarily driven by increased cloud costs to support growth initiatives as well as higher traffic and affiliate costs related to the expansion of our marketing services business. Adjusted other operating expenses of EUR 22 million in the quarter were up 4% year-on-year, declining as a percentage of revenue.

While we have achieved considerable operating leverage already this year, 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 and integrate IMG Arena, 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 of EUR 22 million in the third quarter versus a profit of EUR 37 million reported in the third quarter a year ago as our strong operating results were more than offset by a EUR 22 million lower unrealized foreign currency gain given FX movements, primarily associated with our U.S. dollar-denominated sports rights.

Turning to the balance sheet. We continue to be in a strong liquidity position, closing the quarter with EUR 360 million in cash and cash equivalents and no debt outstanding. During the first 9 months of the year, we generated EUR 149 million of free cash flow, a free cash flow conversion rate of 72% compared to free cash flow of EUR 122 million in the first 9 months of 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 EUR 12 million since the end of 2024 as the strong free cash flow generation was partially offset by the repurchase of 3 million shares for EUR 65.5 million as part of the secondary offering during the second quarter. 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 53%.

Turning to capital allocation. Given the significant momentum in the business and the value we are creating, the Board has approved a EUR 100 million increase to our share repurchase program, bringing the total authorization to EUR 300 million. To date, we have repurchased approximately EUR 86 million of stock under the program at an average per share price of $17.96. It is important to note that while we continue to see value in our shares, given our strong and durable growth and expectations for significant operating margin and cash flow expansion going forward, our capital allocation priority remains investing in expanding the long-term growth potential of the company and we will weigh returning capital to shareholders versus additional organic and M&A investment opportunities in both the short and long-term.

Moving to our full year expectations for 2025. Given the acquisition of IMG Arena as well as the sustained operating momentum we are seeing across our business, we are raising our full year guidance. We now anticipate revenues of at least EUR 1.290 billion, representing year-over-year growth of at least 17% and adjusted EBITDA of at least EUR 290 million, representing growth of at least 30% versus 2024. This strong EBITDA growth translates to nearly 240 basis points of adjusted EBITDA margin expansion in 2025. While our upgraded guidance does reflect initial contributions from IMG, please note that given the timing of the acquisition close, the majority of the meaningful revenue and cost synergies we anticipate as we integrate IMG's portfolio of rights will be recognized in 2026. Given that timing, we are providing our initial thoughts for 2026, where you can see the potential benefits of the acquisition. We currently anticipate 2026 revenue growth, including IMG, to accelerate to 23% to 25% range on a constant currency basis. Please note that foreign currency will be a headwind at current rates, and we will update you on this impact when we provide formal guidance for 2026 on our year-end earnings call.

As we mentioned when the acquisition was announced, we expect the IMG acquisition to be accretive to our adjusted EBITDA margins and current expectations for the consolidated company is an additional 250 basis points of margin expansion in 2026. Our strong year-to-date performance, combined with the addition of the IMG Arena sports rights portfolio, positions us for substantial growth in 2025 and beyond. We are well placed to capture opportunities in an expanding global market, deliver greater value to our clients and partners and drive increasing shareholder returns as we drive sustained revenue growth, expand our operating leverage and generate robust free cash flow.

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

[Operator Instructions] Your first question comes from the line of Robin Farley with UBS.

I wanted to just clarify on your full year '25 EBITDA raise. The release says that you're including IMG Arena, but is it fair to say that the -- just given that it's only 2 months, I don't know if there's anything to break out how much of the increase was IMG Arena versus your organic business? Just wanted to clarify.

Sure. Thanks, Robin. We appreciate the question. So, when you think about the raise in guidance for 2025, from a revenue perspective, the majority of that increase relates to the inclusion of IMG into the 2025 full year forecast, offset by a little bit of foreign currency impact on the overall base business versus our original expectations. When you think about it from an EBITDA perspective, given the strong margin expansion that we delivered in the third quarter, we are continuing to raise our expectations for the full year, including IMG. When you think about IMG overall, what we indicated when we announced the deal earlier this year was that we expect it to be margin accretive to our overall margins. The majority of that will take place, obviously, over the course of the next 12 months, but we do expect upon close that it will definitely be margin accretive at least in the first 3 months following acquisition. So, there is some contribution from an EBITDA perspective with regards to IMG in Q4.

So, some contribution, but it sounds like IMG might be the majority of the revenue increase, but the majority of EBITDA increase is from the rest of your business. Is that the right way to interpret that?

That's correct.

Your next question comes from the line of Jason Tilchen with Canaccord.

A little bit of a follow-up on IMG. I'm just wondering now that the deal is closed, if you could share a little bit more about how conversations with some of your existing clients have gone regarding potentially including some of the additional rights in the products that they're taking and when you expect that to sort of more meaningfully show up in terms of the financial results in fiscal '26?

Jason, Carsten here. So, as you know, the deal has closed on Monday. And before from an antitrust perspective, we couldn't interact with the right holders and also with IMG directly. So, it's very early days. But of course, it's interesting and both of the big leagues here in the U.S. have reached out. PGA have reached out, Major League Soccer have reached out, and we start now discussions. It's an interesting space from a product perspective. It's still very early days, but we are more than optimistic that we can build here some innovations, which will even materialize in '26. So, the spirit is very good. Integration is good for tennis. That is more business as usual. We have now 3 slams. And here, the work is more to look on the ones which are early renewal. So, the U.S. Open, they are in 5 years. So that is more business as usual for us. We focus here more on Wimbledon and Roland-Garros, but we have already a perfect product portfolio, and we can ingest this data. We focus really on the 3 top sports, soccer, basketball and tennis. And this integration is relatively simple for us because that data goes into a machine, which we already have built it. The difference to IMG is we learned now they have 90 to 100 clients. We have around about 800. So, this content is flowing in our global distribution engine. And some of the content is already getting into the ready products for some of the sports like Golf, for example, we see very interesting and exciting opportunities.

And maybe just a follow-up for Craig. In the context of Carsten's response there, talking about sort of the magnitude of 7 to 8x increase in the number of clients you can sell these products into. Is it fair to say that the guidance that you've given for fiscal '26 in terms of the acceleration of growth related to IMG is primarily with regards to their core existing client base and not related to sort of some of the upselling leveraging your global distribution network?

No, I would answer that a little bit differently from a financial perspective. I would say that's true for 2025. When you look at the increase that we're looking at for the current year related to IMG, that's predominantly related to their existing business. But when you look over the course of the next 12 months, including what I indicated for 2026, we would expect there to be some significant uptake from our existing clients. So, you'll see that throughout the year, and it should build throughout the year. So, when we talk about our expectations for 2026, we are expecting some significant revenue synergies across our existing business given the relationships that we have and the new content that we've just obtained.

Your next question comes from the line of Ryan Sigdahl with Craig-Hallum Capital Group.

I want to start with integrity services, up triple digits this quarter. Obviously, a lot of news headlines, MBA, allegations, et cetera. But curious kind of if you're seeing an increased uptake. And given you have a market-leading product there, is this helping kind of from a feature in your negotiations with leagues within the many value-added things you're providing to them. But curious if this is moving up that stream.

Ryan, Carsten here. We are very proud of our integrity service and what we can do for both regulators and law enforcement agencies and the leagues. So, integrity and protection of the game is the highest interest for all the stakeholders. From our perspective, that's something which is enabling us to do the business in the betting markets, which we are doing and to expand our footprint here. Integrity is not really a service which is driving strong profits for us. The commitment here is it is a very strong enabler for going on our betting services. But we are using more and more technology. It's more and more GenAI where we are getting more and more precise on seeing inconsistencies, which is helpful for our partners. You mentioned NBA with the current things, what happens there, but it happens also in baseball and many other sports. So, we are getting more and more accurate on this, which helps sport in a very general way. So that's the commitment from an integrity perspective.

And just as a follow-up, curious from a customer-friendly soccer results that we've heard from many of your customers in September. Did you guys see that impacting your MPS business? And if you did, if you're able to quantify it?

Yes, we see some impact when you have only favorites winning in soccer. And as a reminder, more than 70% of our revenues are outside of the U.S. and soccer is the main betting sport. So, in start of the season, when we see favorites winning, that is from a risk management perspective, more difficult to manage. We see a very limited impact on this in our NPS, and you see the strong growth numbers. But it's, of course, not really supportive from a bookmaker perspective. It's only the favorites are winning. As a small reminder, yesterday was a different day, and we saw a couple of surprises. So, this is leveling out very, very quickly. But the first quarter was a bit weaker because of this from a trading result.

[Operator Instructions] Your next question comes from the line of David Katz with Jefferies.

In a different direction, Carsten, I've heard some conversation from you in meetings with investors, et cetera, around iGaming. If you could give us some updated thoughts on how you see the opportunity set for you globally for Sportradar in iGaming and how we can start to think about that maybe hitting the model over time?

Well, like stated in the last quarter, that's for us at the moment, test period. So, we are doing this in Brazil, and we see it holistic. So, we are starting with the client acquisition. We have the ad service for this. Sport is a perfect instrument here. Once the client acquisition is done, it falls into the sports betting universe. Here, we have all the products from pure data feeds up to risk management or the full platform. We can channel switch that client based on AI and get them into the iGaming space, provide them the right product, measure the stimulation and the churn and have retention tools in between with the visualization. So that's a 360 holistic approach, which we test successfully in Brazil. There is a clear focus that once we are feeling strong enough with this product, we are looking into very scalable markets. The U.S. is such a sample. It's a very scalable market, where we believe we have to work on the portfolio that we are competitive, and we do this as we speak.

From an iGaming perspective, we think there is -- it's a natural element for us because our clients usually have both licenses if they can operate in territories which license iGaming and sports betting. We have the connection to the clients. We have the technology and the platform and the approach. So, we feel very strong about iGaming to integrate this in our portfolio.

And just as a follow-up, thinking about whether at some point that could be -- require some capital to ramp? Or is that sort of minimal or not something we should think about?

David, we are looking in both. So, we are looking into organic investments, and we do this into our teams to build the right games. And we are looking into the market. Is there something which is attractive for us to follow on this strategy. But it follows our general guidance in saying what we do in M&A must be accretive to our margin, which is a tough hurdle to go, but we are looking actively to expand this service, and both are an option, the organic and the M&A expansion.

Your next question comes from the line of Shaun Kelley.

I wanted to go back to the topic of prediction markets, if we could. Carsten or Craig, can we just talk about -- there's obviously a big announcement between some of these prediction markets and the NHL, which is a major partner of yours. So, can you talk about, first of all, the participation of Sportradar in that deal, if there was any? And then, I mean, second, much bigger picture, just what's the primary use case for the customers as it would relate to sort of the prediction market side of this, whereas with traditional house back books, obviously, I think we know how you participate with those customers. But here, the interface seems a little different. And what would be the sort of primary value prop or selling proposition to a very different landscape as you kind of think about these markets? And maybe, Carsten, if you could just draw on your experience from Betfair and sort of how that landscape work, that might be useful.

Shaun, I was expecting that question from a prediction market perspective. So, give me a bit more time because it's an interesting topic, I think, for all of us. In principle, we see here 3 stakeholders, and we are in a unique position because we are connected to all of them. First stakeholder is, of course, sport leagues and the teams. I had in the last 48 hours meetings with 3 commissioners about this to get their view on the situation. And the view is differentiated from some of them, they are saying the most important for us is -- and that's unique -- that's uniting all of them is the responsible gaming and the integrity of the game. So, they want to guarantee this. That's the main interest from sport. And of course, you might guess it. There is also a financial interest from sport to say if we organize these measures, we want to have a participation. And now we are coming to what is the official data used. And is there an official data used to settle what happens on the prediction market. And here, we see different views from NHL, MLB and MBA. I don't want to go here too much into the details, but you mentioned that there was a press statement from NHL. So, you see yourself that there is a different interpretation of this.

But what is uniting all of them is responsible gaming integrity is on top of mind. It needs a clear rule set, and this rule set currently is not there. Second, states and regulators, their interest is player protection, and their interests are clear rules on this and license operators have to follow and comply to these rules in the territory of those states. And there is a tax interest from the stakeholders. I think this is a pretty straight play and very, very clear. Online sportsbooks, and I had meetings in the last 24 hours with 2 CEOs here, see the situation that they want to have equal competition. So, if it comes to acting in states which are at the moment not issuing gaming and gambling and sports betting licenses and they can't compete in those states, that is an issue for them. There is the illegal sports betting argument saying, if you're not licensed and if you operate in states where we can't operate, we classify this as illegal sports betting. So that's the situation. I think it would be good for all of us to lean back and see can we unite this interest from the different stakeholder groups into something which creates a framework of operation, which is a fair balance, and which is satisfying the needs of the player protection and the responsible gaming and the integrity of the sports.

I'm totally certain that we will see this. There is a lot of movement in this space, but there are a lot of arguments uniting all those parties. So that is the ecosystem. As you hear, we are actively connecting. We are actively involved in this debate. I think it needs top management to be in here. From our perspective, it's an opportunity. Of course, we want to help those markets if we see that those clarifications are done and if we see that all the stakeholders are satisfied, we are ready to participate in this market. That's where it stands. Our historical learning here is Betfair is more than 25 years in the market. It didn't gain a dominant share in this market in the 25 years. But there's a reason why Betfair is doing some good businesses here. We're talking single digit from the GGR view on a global basis, which Betfair or exchanges have. So, it's a relatively small amount. We think it will be the same in the United States. It's more limited to less games. NFL is a premium sample for this, where the liquidity is high and you get relatively quickly a matching for what you want to bet on.

If we speak about financial market transaction, relatively quickly, a matching offer for this. So that is the mechanism. If you have a few matches, works perfectly. It doesn't work for live betting. We see a huge live betting trend worldwide, 70% of the matches or the bets, which are wagered are live. So, from this perspective, that's not the right instrument according to our view. But for something which is high volume, that makes a lot of sense, but it needs a clear regulation. It needs clarity who is acting on the exchange, what are the rules of control? And it, of course, needs the player protection. It needs the protection for money laundering, and it needs a protection that sport is involved into this if it comes to the integrity of the game. So that's what we see. I hope I answered your questions.

That's perfect. And just a very quick follow-up. Have you been approached? And is there a use case for market makers? And have you been approached by those as potential customers of Sportradar?

Yes, we have been approached, and we are discussing this. That's the reason why I said we are ready to go here once the framework is the right framework that we can start to act. But the market maker is playing a main role here. The market maker needs high-quality data, and the market maker needs more or less 0 latency. Very important for them. We have all these services, and we can provide it to them.

Your next question comes from the line of Barry Jonas with Truist.

Can you just give us an update on what percent of OSB handle came from in-play in the quarter and how you see that ramping going forward?

Yes. Barry, as you know, we are not reporting constantly on this handled, but the number is roughly the same like in the last quarter. Comparing it to what we see on our MTS global business, which is roughly 70% handled from online sportsbooks for live, we see here in the U.S. roughly 50%, but the trend is picking up that we get a higher conversion on live betting.

And then just as a follow-up, I believe you have a big sports right contract with UEFA up in early '27. When should we expect renewal discussions to commence? And are there opportunities to expand that contract any further?

We are in active discussions like we are with all our league partners. UEFA is a special case. They are sitting in Switzerland. We are based in Switzerland. I'm in frequent contact with UEFA. Looking now to the opportunities you heard in the call before that we launched yesterday with NBC, the performance view, which was on air. That is something which we do now also for soccer. This is a thing which is very interesting for UEFA because what we can do is we predict the next pixel. And then going forward, we can simulate what might happen in the next 4, 5 in the NBA case, 7 seconds. And these are products where UEFA sees a big use case if it comes to their global distribution and broadcast partners. So, these are things which we're actively discussing, and it involves, of course, the tracking data and the deeper data. So, these are developments which UEFA is more than interested in. And of course, we are more than interested to get deeper embedded in the value creation of this league.

Your next question comes from the line of Clark Lampen with BTIG.

I've got 2 questions. The first is going to be on IMG. You provided a framework for 2026 inclusive of the business and contributions. But I wanted to see if you could give us maybe a little bit more detail qualitatively around sort of what's assumed next year from an integration standpoint and a revenue synergy capture standpoint. Does it take a while, I guess, to have the sort of client-by-client discussions and negotiations that result in those synergies unlocks, i.e., should we imagine that, that is a bigger opportunity for 2027 rather than 2026 because that's -- there's a time component there that you can't really compress. And then as we think about the overall SRAD customer base, right now, you guys have close to 2,000 customers around 200 strategic and enterprise. Are the majority of those customers, I guess, sort of even beyond the first 200 addressable, I guess, from an incremental revenue standpoint? Or how should we think about how far and wide, I guess, the distribution of this could go?

Sure. Thanks, Clark. So, when you think about the revenue synergies, they will take some time to ramp over the course of 2026. But as I mentioned, we are now out there starting to talk to those clients immediately. Once the deal closed, we were out there having those discussions already on Monday. And we understand that when you look at the kind of content that we're acquiring, specifically soccer, tennis and basketball. These are some of the most highly demanded sports from a gaming perspective. So, a lot of the clients that we have globally will be looking for these almost instantaneously. When you think about some of the other, what I would call, synergy opportunities, certainly, we've identified items on the cost side that we're looking at that will take some time to ultimately come to fruition over the course of 2026, but the vast majority of this will be on the revenue side. The one thing I will note is that the majority of their customers, the customers that IMG had are customers of ours. So, for those clients, those clients already have a lot of these products and services, where we have the ability to upsell and cross-sell is the other 700 to 800 or so clients that we have globally on the gaming side of the house. And we have already started those discussions, and you'll see that, like I said, ramp up throughout 2026.

Maybe just as a very quick follow-up, the 8% betting and gaming content growth that we saw this quarter, you guys called out a 250 basis points FX drag. Was that -- if we were to think about ex-FX growth for betting and gaming content, should we think about a similar FX drag on that portion of your business? Or was it more elevated or sort of less elevated or less significant for any reason?

Yes. We obviously don't guide by individual line item or talk to too much specifics with regards to the makeup of individual line items. But what I will say is your thesis is correct. When you look at the FX impact, the impact on that line item is very consistent with what it would be across the entire company in totality from a percentage perspective. So, when you're looking at growth in that segment or that product grouping, it certainly would be into the double digits without foreign currency. And when you look at that versus how it was trending in Q1 and Q2, it's very consistent performance throughout the course of the year. So, we're seeing nice, sustained momentum in our, what I would say is core businesses.

Your next question comes from the line of Michael Hickey with Benchmark.

Carsten, Craig, Jim, congrats guys on a great quarter, great guide as well. Carsten, you kind of nailed the predictions market piece. We appreciate that. Your experience certainly shows through. You did say you're in active discussions with all the key stakeholders here. Just in terms of timing from those discussions, should we start to see some flow-through here in '25? Or do you think the divide and the debate is deep enough that '26 is more likely? And then data integrity, obviously, is focal here. But also, curious what you're doing on the advertising side. Obviously, the market is going to heat up. Some of your operator partners are coming in, Polymarket is coming in. And so, it seems like on the media side, you might have some incremental opportunities as well.

We do. And Michael, the media side is not problematic. And we have some business already with [ Kulti ] in this perspective, it comes to client acquisition and to advertising services. So, this is something which is a nice opportunity. There's relatively high spend from those participants because it's a new market entry, and that is a less problematic service. And we are in very active discussions here to develop then also the tailor-fit product for these client groups, but we have already some services there.

And then, Carsten, I think what I heard you say is when you sort of examine and live through the Betfair situation in the U.K. and you reflect on that experience in the U.S., what I think I heard you say or translated was that in regulated markets, you wouldn't expect much share from the prediction markets versus the traditional operators. I just want to confirm that I heard you correctly on that. And then the second piece, I think the big unlock here besides the incremental business you can drive from the prediction side would be that the prediction markets continue to scale, and they motivate unregulated states like Texas, California, maybe altogether half the U.S. population to accelerate legalization of traditional sports betting. Obviously, that's where the majority of your core business is. I'm just sort of curious your confidence or not that, that could actually be a catalyst for legalization and the opportunity for you.

So, let's go first on the share and the prediction markets. The nature of the business here is that you have a market maker in between and you have various levels of prices, which you can buy, and which needs then a match. So usually see 5 levels, 6 levels of the market. And if you want to lay up, let's say, $10,000, you might need to wait until you have the matching with the different levels and you might need to make compromises. So, the way how this transaction is done is significantly more complicated than sports betting. The beauty of sports betting is you can price literally everything because the bookmaker on the other side is holding then the risk, which is enabling a beautiful business for us with the MTS services. But that's the beauty of sports betting. You can price everything. You can do this live. You can price parlays up to whatever, 20x. So that's something which is not possible from the model of exchanges and prediction markets. But prediction markets are super-efficient. If it comes to 1 or 2 or 5 matches, limited number of matches, where you have a lot of liquidity that this matching goes very quickly. For example, a Super Bowl or some NFL matches.

If you talk about 3,000 matches from MLB or NBA or 4,000 from NHL, that is spread much thinner, and it gets much less interesting because you do not have that liquidity to match it. So, this is what we observed for 25 years with Betfair and what Betfair observed by themselves. So, there is a very good use case if you speak about a limited number of matches where there is a high interest and it's a very sharp pricing, usually attracting more high rollers, which want to have bigger stakes for a lower commission. So, we see exactly that use case also in the U.S., and we saw already in the last couple of weeks that this is working very good. Now in your second part of the statement, you said that I'm hinting into Texas and California, which I didn't do, but I'm happy to speak about this. Yes, of course, in the talks which I have with the stakeholders, some of them said it might be an accelerator for Texas and California because what we see is a huge proportion of what goes into the prediction market comes out of those 2 states, super states, which are roughly 30% of the GDPR of the U.S. economy, if I'm not mistaken.

So that is interesting. And yes, from a regulatory perspective, we see that there is more interest now out of those 2 states to understand what might be happening in a regulation perspective when this comes to play. So, I think you are not mistaken to say that this is putting a bit more pressure on regulation, which we all expected to come a bit later. Maybe that is accelerating now. So at least that's what we are recognizing.

Operator, we have time for one more question.

Your next question comes from the line of Jordan Bender with Citizens Bank.

I want to address some of the noise around the business with your exposure to certain markets, whether they're gray or beyond that. Are you able to discuss your view on this exposure? And internally, how do you make sure your data isn't ending up in markets they shouldn't be ending up in?

Jordan, Carsten here. Can you please define what is gray market for you?

I guess, unregulated, untaxed, I guess some of us or you guys maybe have seen some of the reports out there that --

Thank you for the clarification. So, we have a 4-level process. So, we are only working with licensed operators. And we have contracts which are enabling those operators only to work in the territory where they are licensed in. That's the first one. Second, we have a global compliance team, which is making an intensive KYC with every operator, and we are insisting on this that we control it. Number 3, we have an internal audit, which is looking to IP infringements. We are trying to see it in our data feeds mistakes, which we can identify and then assemble where is our content popping up. And if there is a case, where our content is popping up in markets which are not licensed, which are not covered by the contracts. Of course, we are going on those operators. That happens for a handful of cases every year, and we are monitoring this very closely. Number 4, we have league partners, which are from us requesting a vetting process. NBA and NHL is such a samples. So, for every operator who gets this content, that is a separate vetting process with the league, which is coming on top of the levels 1 to 3, which we have there.

And Craig, it's the second quarter in a row that you've talked about adding headcount. The company restructured 2 years ago. So, can you maybe specifically kind of opine on where you're adding some of this talent and where you see the need for more talent?

Yes. Thanks, Jordan. So, I would say it's less about us adding talent, and it's more about using existing talent more efficiently. When you look at the personnel cost growth that we had in the third quarter, it was somewhere in the low to mid-single digits. It's obviously a step down from what you've seen historically. And that's just an example of us using our existing headcount in more efficient ways. So, we'll continue to look for ways to do that. When we put people to work or we end up adding any new headcount, we always look at what are they working on and what's the return on what they're working on. And if they're working on things that, frankly, have not taken a lot of hold, then we'll move them to projects, which have higher return parameters around them. And you're seeing that across the business. You'll continue to see that diligence in Q4, and we expect that to continue into 2026 as well. So, the days of us adding somewhere in the mid- to high teens people every single year because we're a technology company are behind us, and we're going to put our heads to work in the places that matter most.

We want to thank everyone for joining us for our third quarter earnings call. Now I'll turn it back to the operator.

Thank you. This is all the time we have today for questions. I will now turn the call back to Jim Bombassei for closing remarks.

Everyone will be around for your questions throughout the day. I appreciate you joining the call.

This concludes today's call. Thank you for attending. You may now disconnect.