Sportradar Group AG

NASDAQ:SRAD

Earnings Call Analysis

Sportradar Achieves and Targets 20% Growth

Sportradar capped off 2023 by hitting the high end of their financial forecasts, marking a third straight year with at least 20% revenue growth and an even more impressive 33% increase in adjusted EBITDA. With adjusted EBITDA margins improving by 1.8 percentage points, the company underscores its operational efficiency. Looking to 2024, Sportradar intends to ride this momentum, aiming for another year of at least 20% growth in both revenue and adjusted EBITDA, coupled with strong free cash flow generation.

Performance Insights

In 2023, the unnamed company, a global leader in sports technology, demonstrated a strong performance, achieving 20% revenue growth and a 33% increase in adjusted EBITDA. This exceptional growth, marking the third consecutive year of at least 20% revenue growth, was supported by strategic scaling and refinements in the business that led to improved profitability and operational leverage. The company has developed deep-rooted client relationships and a compelling product offering rich in content and innovative technology. Notable partnerships were secured or extended with global sports entities including the ATP, NASCAR, CONMEBOL, Bundesliga, and the NBA, further diversifying and enriching the content array and solidifying the company’s market position. These strong partnerships have enabled the launch of pioneering sports betting products, driving both in-play betting and overall value.

Strategic Moves and Innovations

The company’s confident outlook is reflected in its Board’s approval of a $200 million share buyback, signaling a robust belief in long-term value. Innovations such as Sportradar 4sight streaming technology and Embet for the NBA's League Pass OTT platform exhibit the company's continuous efforts to revolutionize the betting experience. Deeper insights and engaging products like Alpha Odds, which aims at individualized odds generation for sportsbooks, have already shown promising results. These product developments not only emphasize the company's technological edge but also its intention to sustain its growth trajectory through cutting-edge solutions.

Financial Projections and Goals for 2024

Looking ahead to 2024, the company envisions maintaining its impressive growth pattern, projecting at least 20% growth in both revenue and adjusted EBITDA. The target figures amount to $1.05 billion in revenues and $200 million in adjusted EBITDA, with margins expected to hold steady at around 19%. This growth will primarily be fuelled by the robust recurring revenue from clients, leveraging a strong repository of content and products that will be further augmented by recently acquired rights such as those from the NBA and ATP partnerships. Additionally, the company expects to achieve approximately 5 percentage points of operating leverage gains, counterbalancing the one-time increase in sports rights costs associated with these high-profile partnerships.

Earnings Call Transcript 2023-Q4

[Operator]

Good day, and welcome to Sportradar's Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to Jim Bombassi, Head of Investor Relations and Corporate Finance. You may begin.

[Jim Bombassei, executive]

Thank you, operator. Hello, everyone, and thank you for joining us for Sportradar's earnings call for the fourth quarter of 2023. 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 up the call to questions from investors. In the interest of time, please limit yourself to one question plus 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 both IFRS and non-IFRS financial measures. Additional disclosures regarding these non-IFRS measures, 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. Joining me today are Carsten Koerl, our Chief Executive Officer; and Gerard Griffin, Chief Financial Officer. And now let me turn the discussion over to Carsten.

[Carsten Koerl, executive]

Thanks, Jim. Good morning, everyone. We are excited to speak with you today to provide an overview of our performance in 2023 and our strategic outlook in 2024. As a global leader in sports technology, we continue to consistently deliver above-market growth at scale. This reflects the depth of our content and the high value proposition of our product offering, supported by the breadth of our client and partnership relationships. In 2023, we continue to scale and refine our business strategically, delivering strong growth in revenues, profitability and cash flow. We also drove stronger operating leverage while continuing to invest in our content and technology capabilities. We plan to maintain this growth momentum in 2024 with a more agile and focused organization. In 2023, we delivered revenues and adjusted EBITDA at the high end of our guidance range, with revenues up 20% and adjusted EBITDA increasing 33%. This marks the third consecutive year we delivered at least 20% revenue growth. We also improved our adjusted EBITDA margins by 1.8 percentage points and grew net cash flow from operating activities by 54%, highlighting the operational leverage in our model. Now I will touch upon several operating highlights in 2023, illustrating our exceptional performance. First, we are thrilled to be selected as the successful bidder for the global ATP data, betting and streaming rights for the next 6 years. We are truly excited about that this will bring the tennis fans around the world. Both Sportradar and ATP have great ambitions to plan and revolutionize sports betting and tennis, bringing to market innovative products on services, some of which I will discuss shortly. In addition to ATP, we strengthened our content portfolio with other long-term partnerships, including with NASCAR, CONMEBOL, the South American Football Confederation and Bundesliga, the premier German soccer federation. Collectively, these partnerships fuel our ambitious product roadmaps to transform the sports betting experience, foster more in-play betting, while drive more value to our clients and Sportradar. With our NBA partnership, we expanded several of our commercial deals, including Caesars Sportsbook and BetMGM for official NBA data. With these, we now have agreements with all the major operators in North America, which represents nearly 100% of the U.S. market, signing on for official NBA data. We were also selected to power Taiwan sports lottery, the sixth largest sports lottery globally. We have fully integrated Sportrader's sportsbook solution across more than 2,600 retail outlets as well as web and mobile channels. This is another great win, and we now work with nearly 50 lotteries around the globe and intend to sign additional partnerships in the near future. These achievements and the results this past year speak to the tremendous progress we are making to cement our position as the partner of choice in the industry. Given the strength of our business fundamentals and the confidence in the positive outlook for the future, our Board of Directors have approved a USD 200 million share buyback, underscoring our confidence in the long-term value proposition. I also want to take a moment to update you on our CFO search. We have been conducting our search progress and have some strong candidates under consideration. We are confident we will select a strong individual to take on this role. I'm excited about the strong foundation we established and the momentum we have against opportunities that await us in 2024. Core to this is the depth and breadth of our real-time sports content, data and technology, which are the key competitive advantages and serve as a foundation to our growth engine. We cover approximately 1 million events annually across approximately 70 sports and partners with approximately 400 sports leagues and federations. We are the leading solution provider of unparalleled insights into sports. The continued enhancing and scaling of the real-time content and data fuels our innovative product development, helping to drive the future growth and leverage in our business. In 2023, we further strengthened these assets, most notably through our partnership with NBA and ATP. These global partnerships bring incredible reach and value to our overall content portfolio and product offering. As I have mentioned on previous calls, tennis boost a global fan base of 1.6 billion eyeballs, making it the second most bet-on sport underscoring its enormous reach and appeal. Similarly, basketball is a huge followed global sports with 2.2 billion fans worldwide ranked as the third most bet-on sport -- our approach to our portfolio of rights is both strategic and deliberate, focusing on the rights that deliver the highest ROI and allow us to continue to invest in a way then deliver the best value for our clients, partners and shareholders. We believe we have the right mix and scale of content, while we have an ability to acquire more rights if the ROI makes sense, we do not need additional rights in order to deliver on our growth targets. Now turning to our product roadmap. It is backed with exciting innovations, leveraging our proprietary tech and deliver further value to our clients. From expanding live odds markets to enhance streaming betting products, to creating next-level betting engagement tools, we continue to define the sports betting experience. As I mentioned, at the core of our strategy lies the productization and deep data and how it enables us to launch new and value-add products to the market that create a more immersive betting experience. Our partnerships with NBA and the ATP are great examples of this. We are creating deeper insights from games and matches, driving innovation, enriching the fan experience and simulating in-play betting. Let's talk about some of these innovations and new products. First, I'm excited to discuss our new Sportradar 4sight streaming technology, which we launched initially with the ATP and went live earlier this month in Indian Wells. 4sight enhances our core audiovisual offering by seamlessly integrating animated overlays such as live broadcast graphics, statistics and visualizations directly into the video stream of games for sportsbooks. This leads to an enhanced [ viewing ] experience and excite matters about new in-play betting markets as we gear up to introduce micro betting later this month. Where we will provide sport fans with the opportunity to bet on key moments in the match. We are also very pleased to roll out our Embet product to the NBA's League Pass OTT platform. Embet and other industry first product integrates live betting content in real time into an OTT platform, offering a wide range of real-time data, including point spread over under inside and player props. Embet creates the ultimate integrated bet and watch experience during live stream broadcast of a game and reduces friction when OTT viewers want to place bets. It is great to see that Embet has already been significant uptake with unique users growing 10 fold since it launched at the beginning of this year on League Pass. As we add additional betting functionality over the coming months, we anticipate usage to continue to climb. We are also very excited about our game-changing Alpha Odds offering, which builds on our market-leading core odd solution by generating odds tailored for individual sportsbooks based on their real-time liquidity. We are very excited how this has already proven itself in the marketplace, generating an approximately 10% higher margin for sportsbooks on their betting tickets. These are a few examples of products that have either launched or will launch in 2024. I feel great about our robust product roadmap and the opportunities it will unlock. Moving to our 2024 financial goals. We see a clear path to delivering robust growth. We expect another year of at least 20% revenue and adjusted EBITDA growth. Execution of our game plan in 2024 should position us for continued growth and meaningful operational leverage over the coming years as well as strong free cash flow generation. Our growth in 2024 will be underpinned by our recurring business, which will benefit from underlying market growth and contractual increases in addition to unlock further value leveraging our best-in-class product and content portfolio. Furthermore, we will see a meaningful step-up driver by our newly acquired NBA and ATP rights. In conclusion, we are indispensable trusted partner of the sports industry delivering solutions at scale. Our exceptional leadership is laser-focused on driving efficiency, excellence and quality across the board. Underpinning this is our unwavering focus on client and shareholder value as we execute against our strategic priorities and 2024 growth plan. Now I will turn over to Gerard to review the financial highlights. Thank you.

[Gerard Griffin, executive]

Thank you, Carsten. We delivered strong revenue and EBITDA growth in 2023, closing out the year with our financial results at the high end of our guidance range. Our business fundamentals are strong, and we are well positioned for continued growth and success in 2024 and beyond. Our fiscal 2023 financial results reinforce the durability and scalability of our growth profile as well as our focus on profitability. Revenues were EUR 878 million, up EUR 147 million or 20% year-over-year. Profit for the year from continuing operations was EUR 35 million, up EUR 24 million or 230% year-over-year. Adjusted EBITDA was EUR 167 million, up EUR 41 million or 33% year-over-year. Adjusted EBITDA margins were 19%, an improvement of 1.8 percentage points year-over-year. Net cash flow from operating activities were EUR 259 million, up EUR 91 million or 54% year-over-year. Our revenue growth was well ahead of our market growth rates, enabled by focused execution and the scale of our business. This was driven by strong growth from our recurring client base, including strong expansion in fast-developing markets like the U.S. and new global client wins such as the Taiwan Lottery. We made significant progress in driving profitability, improving operating leverage by 1.8 percentage points due primarily from leverage in our sports rights and personnel expenses as well as a stronger revenue mix. We continue to maintain a strong balance sheet, closing the year with liquidity of EUR 497 million comprised of EUR 277 million of cash and cash equivalents and a EUR 220 million revolving credit facility with no amounts outstanding. Today, we are pleased to announce that our Board of Directors has approved a USD 200 million share buyback program, justified by our strong business fundamentals and our confidence in the long-term profitability and cash flow outlook for the company. Now turning to the fourth quarter. We delivered revenues of EUR 253 million, up EUR 46 million or 22% year-over-year. We are very happy with the market performance of all major product lines, with each generating at least 20% growth. Rest of World betting was up EUR 26 million or 25% year-over-year with strong performances across all the main product lines. In particular, live odds and data was up 15% year-over-year. MBS was up 48% year-over-year, driven by the initial set of revenues for the Taiwan Lottery and a rebound in our MPS business in the latter part of the quarter. Rest of World AV was up EUR 8 million or 20% year-over-year, supported by the addition of our new CONMEBOL and NBA rights and an uplift in services to existing and new clients. The United States was up EUR 12 million or 28% year-over-year, driven by strong market performance, including the initial contributions from our NBA deal and an uplift from selling additional services to existing and new clients. In U.S. dollar terms, our U.S. business grew 37% year-over-year. All other revenues were broadly flat year-over-year. Profit for the quarter from continuing operations was EUR 23 million compared to a loss of EUR 33 million in the prior year quarter. This improvement was driven primarily by a EUR 40 million positive year-over-year impact from foreign currency and a stronger revenue contribution in the current year. Looking at our adjusted EBITDA. Adjusted EBITDA was EUR 40 million, up EUR 4 million or 13% year-over-year. Adjusted EBITDA margins were 15.7%, down 1.3 percentage points and deleverage from higher sports rights, partially offset by operating leverage primarily in personnel expenses. Personnel expenses were EUR 89 million, up EUR 8 million or 10% year-over-year. Sports rights were EUR 75 million, up EUR 25 million or 51% year-over-year, driven by the new rights, in particular, the kickoff of our NBA partnership in the current quarter. In summary, we delivered a strong Q4 financial performance to cap off a strong growth year in 2023, where we have delivered at the high end of our guidance ranges. With these strong business fundamentals, we are well positioned for continued growth and success in 2024. With that, let's turn to our 2024 outlook. For fiscal 2024, we expect to continue to scale our business globally, delivering at least 20% growth in revenue and EBITDA, which will equate to a bid case of revenues of EUR 1.05 billion, adjusted EBITDA of EUR 200 million and adjusted EBITDA margins of 19%. In fact, just to consider when assessing our outlook for 2024 include, our outlook assumes a euro to U.S. dollar exchange rate of 1.07. Revenue growth will be driven primarily from our strong recurring client revenue streams, leveraging our best-in-class content and product portfolio amplified this year by the addition of our ATP and NBA partnerships. As we've noted in the past, we will continue to challenge all aspects of our business to ensure we are focusing our talent and resources on the most profitable growth opportunities and unlocking operating leverage. We expect the strategic actions we have taken to date as well as our continued focus on sustainable profitability in 2024 will unlock approximately 5 percentage points of operating leverage collectively in personnel, cost of sales and other operating expenses. This will offset the impact on operating leverage resulting from the onetime step-up in sports rights costs primarily from the first full year of our NBA and ATP partnership deals. Accordingly, for the full year, we expect our adjusted EBITDA margins to be similar to 2023, progressing from the mid-teens in the first half of the year into the low 20s in the second half of the year. This seasonality is primarily a function of the [ phasing of ] sports rights costs and the realization of the full year run rate benefits from our cost section. We are very much focused on enhancing margins and free cash flow generation. And as we look out beyond 2024, we expect to unlock operating leverage from all major expense line items as we continue to scale our business, actively manage our operating cost run rate and benefit from a more stable sports rights portfolio cost [ space ]. As we reflect on our performance in 2023 and our outlook for 2024, we are well on track to deliver on the long-term financial targets we outlined at the time of our IPO, namely, revenue growth of at least 20% and adjusted EBITDA margins in the 25% to 30% range. Before we open the call for questions, I want to note that we expect to enhance and simplify our financial reporting in 2024, better aligned with the changes we've made to our business organization. We will have more communicated on this in advance of our Q1 earnings call. With that, we would like to open the call for questions. Operator, will you open the line for questions?

[Operator]

[Operator Instructions] Our first question comes from Michael Graham with Canaccord.

[Michael Graham, analyst]

I wanted to ask about 2 things. One, in the press release, you talked about some nice initial contributions from the new NBA deal. And I just wanted to dig into that a bit and maybe see if there was anything incremental you could share about some of the customer conversations and what were they really excited about -- and then I just wanted to ask more broadly, can you just make a comment on your product roadmap for the year? Should we expect this to be a relatively innovative year relative to 2023?

[Gerard Griffin, executive]

This is Gerard. In terms of the NBA, the -- as we said in our prior earnings call, this is a premium partnership we have that's worth over a [ EUR 1 billion ] in revenue to us over the lifetime. It's off to a very strong start. We've locked in all of the major operators here in the States, and we've got really strong engagement internationally as well, given that it is a global deal. So it's performing as we said, ahead of our original expectations, and it's obviously implied in our guidance.

[Carsten Koerl, executive]

Well, on the product roadmap, as you saw, we launched now [ 4sightes ]. We launched Alpha and Embet, all [ has that ] year how can we convert quicker into life and how can we collect more data. And yes, you are right, we can expect more of those products. We have a full ramp-up engine here, and we are focusing laser sharply on those 2 topics, live conversion and collecting more data to put it into innovative products.

[Operator]

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

[Ryan Sigdahl, analyst]

I want to start with sports rights. So looking at Slide 22, very helpful. Appreciate that. But based on the existing contracts you have, any more specifics you can give on kind of sports rights leverage in 2025 and then the next several years as you season and get out your into year 2, 3 of the NBA and ATP, but also considering you have a renewal with Major League Baseball and others coming, so?

[Carsten Koerl, executive]

Ryan, Carsten here. So for the sport rights, like we said, we are focusing on return of investment looking into that. We are sitting on a strong cash position. We are perfectly placed from our scale and the distribution power, which we have but we carefully evaluate for every right, what is the return of investment. If that fits into our long-term proposition, of course, we are ready to acquire new rights. For the moment, the numbers which we present our numbers, which we can fulfill and deliver with the rights which we have. So we feel pretty strong and confident about where we are sitting, but we are monitoring the market actively.

[Gerard Griffin, executive]

And Ryan, just to build on Carsten's comment. When you think about '25 and '26, as we stated in our prepared remarks, we have the ability to deliver operating leverage across all items, including sports rights. And this year, it's a meaningful step up because we're adding 2 very important premium rights in ATP and NBA. But as you know, the amortization of those rights is fixed over the lifetime. So as we go into outer years, that's a definitive. We know over the life of these deals, what that sports rights number is. We also know that as these deals evolve, we see an evolution of the revenue, which means the contribution from these deals is more beneficial to the company in the latter half of these deals as it would be at the early years. So that in itself will enable us to have more confidence in operating leverage as we look out beyond '24.

[Ryan Sigdahl, analyst]

Good. Then just for my follow-up question. Curious about I think you have to say on Brazil. I think you guys do some business currently with your large customers like Bet365 there. But I guess, how does regulating that market change those deals and any potential opportunities there?

[Carsten Koerl, executive]

So I'm flying to Brazil in 4 weeks' time, there was a big conference there. It is a very exciting market. It is a priority for us and for me, the market, how we see it at the moment is it's still in the gray zone. So we still see adaptations. There was a piece of law, which was introduced in December last year. Still, there are no licenses given. We expect that this will happen quarter 2, beginning of quarter 3. So the market is ramping up here. From a size perspective, the online gray market with the big players, which you mentioned is maybe a EUR 2 billion GGR. We expect, with regulation, that market is growing on a EUR 5 billion GGR per year. To put that into comparison, the U.S. is around about EUR 10 billion. So that shows you it's a very scalable and sizable opportunity. And it's an opportunity which is driven on soccer. Our CONMEBOL deal here is very supportive. We are looking into strengthening this portfolio to attack Brazil for years, but it's a focus area for us.

[Operator]

Our next question comes from Bernie McTernan with Needham & Company.

[Bernard McTernan, analyst]

To start, the 20%-plus revenue growth expected this year, would love just to get a sense in terms of how much of that is driven by rate versus volume, trying to get a sense in terms of the new rights deals, how much that's contributing to the top line? And then as a follow-up, just if you could talk about the visibility into future revenue of the business, the 20% plus revenue growth, how sustainable is that into future years, and I guess, given the context of the $200 million buyback authorization as well, too?

[Carsten Koerl, executive]

Yes. In terms of looking at the 20% growth and the largest element of that growth is coming from what we call business as usual. In other words, it's contractual increases year-on-year market growth, our focus on client centricity and adding new clients into our core business. So you could sort of estimate that broadly at roughly 60%. The balance, to your point, is sort of the step-up from ATP and NBA from a revenue perspective. Obviously, from a sports rights perspective, we talked about that. That's the deleverage factor that you see in '24. So that's the basic shape of '24. As we look out into '25 and '26, you obviously are going to see a continual evolution of the revenues, as I said in the last question from our ATP and NBA deal. In addition to , we have consistently grown organically over 20% in terms of our core business. And so as we think about the out years, we do expect to continue to grow. We're not giving long range guidance on this call, but if you look at our historical performance, and the investments we're making into new technology and new products, we have confidence that we've got the leverage to continue to grow our top line, and more importantly, unlock operating leverage as we think about '25, '26 and beyond. The buyback, obviously, from a -- when we look at our stock price and we look at the value, we believe that there's obviously significant more value in the fundamentals in the future of this company than we're currently getting credit for. So we thought it was appropriate to put a buyback in place so that we can obviously enter the market and address the purchasing back stock at lower levels. And it's just a -- it's a nice lever to have within our capital allocation strategy as we move forward. If you think more broadly about capital allocation, obviously, we believe in the future of our business, so we will continue to invest in areas where we feel we can scale our capabilities and the opportunity further. So the buyback is just one aspect of our capital allocation strategy.

[Operator]

Our next question comes from Robin Farley with UBS.

[Robin Farley, analyst]

I wonder if you could give us some color on how U.S. EBITDA fits into your guidance for 2024 in terms of the overall EBITDA target?

[Gerard Griffin, executive]

Yes. No, the U.S. is profitable in 2024, and it's continuing to evolve. It's growing, obviously, top line, and we are seeing operating leverage in the U.S. So from that perspective, it's expected to be profitable. Obviously, it came in, in Q4 with compressed because of the NBA deal. But with the benefits of the revenues from the NBA plus growth in the rest of the portfolio, plus our focus on managing profitability and run rates, the U.S. will be a profitable contributor to our business in 2024.

[Carsten Koerl, executive]

Maybe, I can add. We will -- Robin, maybe I can add. We expect to outperform the market growth in the U.S. according to the statistics which we all have. So we think we have a leverage here. We will grow stronger than the market in the U.S. And to repeat, yes, we expect to be profitable in the U.S. more profitable than we have been this year.

[Robin Farley, analyst]

Okay. And maybe just as a follow-up. Just as you were sort of talking about how your sports rights costs are fairly fixed now, and there'll be this operating leverage and with the growth in new markets coming on. Is there a thought that you guys might at some point, not on the call today, but that you might give 3-year targets at some point given that maybe some of these expenses you have pretty good visibility on, and there's also pretty good visibility on some of the revenue growth in the U.S. I'm just curious if you -- if that's something you think you might do in the next few quarters? Or any thoughts on that?

[Gerard Griffin, executive]

No. There is thoughts on that in terms of giving more long-range outlook and a deeper look into the company, but there will be more to come on that in future calls.

[Operator]

Our next question comes from David Katz with Jefferies.

[David Katz, analyst]

I appreciate it. And I think this is a similar vein to the prior question. But with respect to the NBA sort of cost weight and its impact on margins, can you just talk a bit about what the trajectory of that is as we move out into the little longer term, just so we can start to envision why the profitability there works.

[Gerard Griffin, executive]

Yes. The actual sports rights cost is fixed. We -- all those projections are done. So we know exactly how much we're amortizing every quarter because it's on the balance sheet and it's amortized over the life of the deal. The variable part is obviously the evolution of the revenues, which are projected to grow over the lifetime. So as you think about that, it's -- you're starting -- you're starting in the teens in terms of the flow-through from an EBITDA point of view, growing into the 20s. And by the end of the contract, you're north of the 30s just because of the nature of the lifetime. Lifetime on that deal and similar for the ATP deal, you're looking at margins lifetime that are in the realm of our long-term goals of 25% to 30%. So again, it's math. And as you think about a fixed line for the sports rights and a curve -- a growth curve for the revenue with no real meaningful incremental OpEx considerations. You're looking at a higher return on these deals in the latter years than you are in the early years.

[Carsten Koerl, executive]

Maybe we can add one element on it. That's the live conversion. That's a benefit for us. When we managed to convert more pre-match into live betting, that means from every percentage point, which we can convert, it's a EUR 1.2 million flow through on our revenues without costs. We are sitting on this property.

[David Katz, analyst]

Perfect. And if I can just follow up a little bigger picture question, which I suppose also seconds the appetite for some long-term targets. But when we think about the next 3 years, can you just talk a bit about how much of the path to profitability and revenue growth is within your control through new product introductions on the roadmap versus growth in just the underlying markets?

[Gerard Griffin, executive]

I think -- yes, I'll start in terms of -- if I look at it from an operating spend point of view, sports rights are completely within our control. It's our decision if we want to add incremental sports rights into the portfolio, and we will only do that where we see the kind of return that will contribute to our profitability and our growth. When you look at our expenses outside of people cost, they've grown in single-digit range. So -- and we expect to continue to manage that line very tightly. Similarly, when you look at what we've done last year and our focus on run rates and profitability for people costs, -- that's also within our control. It's our decision where we're investing our talent and where we're deploying them. And so in the end of the day, there is variability in the future, but we've got very much a visceral focus on run rates, how we're deploying capital and investments going forward. On the revenue side, year in, year out, the depth and scale of our portfolio, both our content and product portfolio enables us to deliver significant value to our client base. And we've got over 900-plus sports betting clients globally. So from that point of view, we feel good about us addressing a growth rate that's in line with the market. And then incrementally to that, given the investment we have in new products and the innovation within the company and our pricing capabilities -- that's how we can index above market growth rates. And we've -- again, if you look at the history of the company, we've delivered on that, and we continue to deliver on that based on the guidance we're giving this year. Again, the future is not defined. But when I look at the capabilities we have within this company, more than any other, I think, company in our space, we have the ability to scale and grow.

[Operator]

Our next question comes from Jordan Bender with Citizens JMP.

[Jordan Bender, analyst]

Gerard, I want to follow up on the share repo, comments you made earlier. Is there a way to think about cadence, whether it's [ Dollar Mel ] or just number of shares once that trading window opens here in a couple of months?

[Gerard Griffin, executive]

Yes. Jordan, as you know, with these 10b5-1 plans, we will -- obviously, we will be working with an investment bank in terms of the execution. And under the plan, we'll be managing the level of spend based on the trading volume of the stock and where the stock price is landing. We obviously will be only doing a percentage of the trading volume. We have a low liquidity in the market. But as you know, with these kind of plans, you generally -- you're looking at a 10% to 15% sort of governor on the kind of purchasing you would do just so you're not influencing the stock in an abnormal way. Outside of that, it will be opportunistic. It will depend on where the stock is and the trading volumes. So it's -- there is -- the plan is governed by its parameters. Their standard parameters. There's nothing unusual in there. So we'll see how it evolves over the coming quarters.

[Jordan Bender, analyst]

Understood. And then just on the net retention ratio, that seems to have fallen off in the back half of the year. Is there anything to kind of call out on that?

[Gerard Griffin, executive]

No, I think it's scale. It's still a very strong -- any ratio above 100 is really strong. What I would say is when you think about the additional adds to our portfolio with the NBA and ATP rights and some of the focus on client's interest, I'd say to put it in my old parallel same-store sales should be stronger in '24 than they were in '23. So that will obviously help the ratio going forward.

[Operator]

Our next question comes from David Karnovsky with JPMorgan.

[David Karnovsky, analyst]

Carsten, with AV streaming, it's a fairly developed market internationally, more nascent in the U.S., but we have started to see products come through from some of the leagues like MLB and NHL or NFL with your competitor. Curious, first, what you're seeing in terms of engagement with these live streams. And then maybe with the NBA specifically, just given they're going to negotiate overall media rights soon, do you see an opportunity coming out of that process for more dedicated betting streams that you could power?

[Carsten Koerl, executive]

Yes. That's a good question because it looks into the future. And I think where this is going to is hyper-personalization. So you're going to need to know the sports fan, you're going to need to know which team, which player, and then you need to give him a customized experience. That's where this is going. 4sight is touching on this first. We are using already deep data to show some information about the match, which you can't see. So you visualize the performance, you anticipate what is the [ board ] speed and you're giving this experience to the users. The next step is to really customize this for the user and then to stimulate the user for whatever you want to do with monetization. It can go into sports betting, but it's not limited. It is merchandising, it's ticketing, it's sponsoring. Now speaking to our partners on the NBA side, that's exactly what they are looking for. So the future of this is hyper-personalization, trying to embed all the data points and all this information and giving a very enriched digital product to the sports fan. The competition here is globally for the Tier 1 sports and the NBA prides themselves to be the most innovative spot. So for us, that was one of the big decision points while we choose NBA as our premium partner for this to be innovative, but that's where the market is going. And I think for the Tier 1 rights holders, that's a very important aspect to use technology to distribute their product further. Yes, there is a good side aspect for us in sports betting, given the size of the global media market, you see where this is trending to and Sportradar is embedding itself as a technology partner, premium partner for the NBA.

[Operator]

Our next question comes from Stephen Grambling with Morgan Stanley.

[Stephen Grambling, analyst]

So I guess a couple of follow-ups on the reorg. One, I guess, where are we in terms of the labor savings exceeding those? Where have they generally come from so far? And is the business right now being operated the way that the segment results are currently disclosed? Or is it much more centralized?

[Gerard Griffin, executive]

Yes, we're -- the majority of the actions that we announced at the latter half of last year are complete. You'll see the benefit of those flow through in '24, more in the second half of the year than the first half of the year. And as we indicated in our in our prepared remarks, as you're thinking about your models, you're thinking about EBITDA margins, think about sort of mid-teens for the first half of the year and then growing into the 20s in the second half of the year. It's just a function of the sports rights and obviously, the -- getting the benefits from the actions we took in '23, but also our continued focus on profitability in '24. So from that point of view, that's how you should think about it.

[Carsten Koerl, executive]

Maybe if I can add more on the CEO personal note here. The teams are feeling extremely empowered with the reorganization. We focus razer sharply on the product on the ROI and on the growth and the innovation which is driven there. We have significant more clarity and significantly more focused to execute on this. So that comes from inside our organization. It needs some time to restructure now all teams and scale this down, but we feel very strong about this, and we see very positive results already.

[Stephen Grambling, analyst]

And maybe as another follow-up on that. I think this is the first earnings call since Gerard announced your departure. It's not often we have this kind of change in the midst of a reorg. I'd love to hear what you think are key focus areas for any incoming CFO and things you want to in part?

[Carsten Koerl, executive]

Let me take this one. I think Gerard did a fantastic job. So it's not only Gerard in the financial department. Gerard installed Chief Accounting Officer. We have here Jim sitting with us for the IR and the preparation and several other leaders which have been installed in the last year. So we feel very, very strong from a people perspective, from an organization perspective. And yes, it's sad that Gerard took a personal decision to depart, but this is a team exercise. We have a very strong team in place. And as I said, we are very confident to find a replacement for Gerard with on the level of Gerard and who can help us to push the company further forward.

[Gerard Griffin, executive]

Yes, I would just build on that. I haven't left the building yet. But as I think about the leadership team, there's the 7 of us in the leadership team, that group is very much, as Carsten said earlier, very much focused on the priorities and the opportunities we have ahead of us. And one of those things as we grow our top line is operating leverage, as I said, in some of the other questions. While that may sound like a financing, it's not -- it's a visceral focus by the leadership on making sure we're investing in the right areas, and we're managing our run rates in a way that we are unlocking that value. That's not going to change. And whoever comes into the CFO seat, as Carsten said, we have a very strong finance organization. But more importantly, they're coming into a management team that's dialed in on the opportunity and what they need to do is continue to focus us on the right ROIs, the right level of operating leverage and let the rest take care of itself. So I think from that point of view, just to build on Carsten's point, we have a very strong team in this organization. My personal decision aside, this company is well dialed in to continue to grow profitably.

[Operator]

Our last question comes from Shaun Kelley with Bank of America.

[Shaun Kelley, analyst]

Great. So I just wanted to go back to the sort of MTS and MBS growth that you saw. And just I'm thinking more about 2024. I'm just trying to get a sense of -- and it goes back a little bit to, I think, David's question at a high level. Are there any sort of new geographic markets that are sort of meaningfully outgrowing the core? And I guess, Carsten, the reason I ask is, obviously, we see some maturity and some regulatory headwinds in the more mature European markets, particularly the U.K. and the Netherlands. So just trying to think about where you're seeing like globally that meaningful outsized growth? And specifically, is there anything in for Brazil? Or is that entirely upside if that market comes online in the second half?

[Carsten Koerl, executive]

Shaun, so we see Brazil, as I just told. So the opportunity here is probably a EUR 5 billion GGR per year for the next 3 years. That's a EUR 15 billion comparing it with the U.S. with a EUR 10 billion that shows the size and scale, of course, that is the optimistic case here that the regulation goes fully in place in a way that the sportsbooks are empowered to really invest decently in that market opportunity. So we are very bullish and optimistic on this. There are a couple of other small states in Latin America, where we think that's interesting. It's interesting to look into Africa continues to grow besides all the local issues, which we see in Nigeria and South Africa we see overall a strong growth here. In Europe, you are right. There are countries where we see it is a bit more difficult. The U.K. is probably the most prominent of this. But there are other opportunities, for example, in Italy or in Croatia, where we see the opposite. So I would say that's a balanced view for Europe. Looking into Asia, we have continued to monitor India very closely. We are looking to the Philippines here. And we believe there is an opportunity, not in this year, but maybe in 2 or 3 years in Japan, not so much in China. So overall, if I'm looking around the globe from a growth opportunity, we see significantly more opportunities than threat. That's the overall picture. Looking to MTS and MBS. We see enormous scale. We see that we established here system, which is really solving a problem for the operator. It's delivering a higher return for them in the risk management with a lower cost. And we see that this product is really sensational performing. That is something which we can relatively quickly implement with the operators, the risk management. The managed betting service and the platform is a slower development. It takes longer, longer lead times to convert operators on the platform, but we showed that we can do this on scale with the Taiwanese Lottery.And we are building up here a very strong pipeline for looking into the managed betting services in the future. It will take a bit longer than the MPS integration. And to finally give you the percentages, 75% of it is MTS. 25% of it is the managed betting sportsbook services, what we predict in the next years.

[Shaun Kelley, analyst]

Great. And then maybe just a follow-up, same idea. But obviously, the year experienced a little bit of pressure in the Rest of World betting segment margins. Is that just, I mean, amortization of sports rights across the broader global portfolio? Or is there anything else that's driving that and you expect that to start to level out again as you gain operating leverage, anything specifically to call out on the segment margin side?

[Gerard Griffin, executive]

No, I think it's partially due to the point you made sports rights. We obviously, we're continuing to invest in our global platform with the majority of that cost would be hitting the Rest of World, which is the largest part of our scale. As you think about moving forward, the rest of world is sort of -- you can look at the total company view and Rest of World is very similar. We do expect to see operating leverage over the coming years out of Rest of World. We actually expect -- I know you made some comments about some of the more developed markets. We still expect our Rest of World business to grow very strongly over the coming years. And for all of the reasons we've said in the various questions and the prepared remarks. So yes, Rest of World is expected to follow a similar flow for the total company, which means operating leverage coming out of '24 to '25 and 26.

[Carsten Koerl, executive]

Thank you, everyone, for joining us for our earnings call. We'll turn it back to the operator.

[Operator]

Thank you for your participation. This does conclude the program. You may now disconnect. Everyone, have a great day.