SportRadar (SRAD) Q2 2025: Managed Trading Services Volume Hits €45B, Powering Margin Expansion
SportRadar’s Q2 showcased a disciplined, multi-pronged growth model, with managed trading services (MTS) turnover reaching €45 billion and U.S. revenue mix rising to 28%. Margin expansion and robust free cash flow conversion reflect operational leverage and cost discipline, while the pending IMG Arena acquisition sets up further content scale. Management’s raised outlook signals confidence in the durability of its platform approach and client penetration strategy, even as competitive bidding and regional dynamics demand ongoing vigilance.
Summary
- MTS Momentum Accelerates: Managed trading services volume surged, reinforcing SportRadar’s value chain strategy.
- U.S. Outpaces Global Growth: U.S. segment now 28% of total revenue, with product adoption broadening.
- Margin Expansion Drives Upward Guidance: Cost discipline and leverage underpin higher full-year outlook.
Performance Analysis
SportRadar delivered a record quarter, with broad-based growth across both product and geography. Betting technology and solutions, which represented the lion’s share of revenue, grew at a double-digit pace, driven by increased uptake of streaming and engagement products, as well as higher volumes in managed trading services. The U.S. market continued to be a standout, expanding to 28% of the revenue mix and outpacing rest-of-world growth, reflecting the company’s deepening relationships and product penetration with American sportsbooks and media clients.
Margin performance was a highlight, with adjusted EBITDA margin expanding by 250 basis points to 20.1%, enabled by stable sports rights costs and disciplined headcount management. Free cash flow conversion reached 68% for the first half, up from 62% the prior year, even as the company stepped up investment in cloud infrastructure and affiliate marketing. The company’s ability to outpace underlying market growth is being driven by a combination of upselling, cross-selling, and moving clients up the value chain into higher-margin services like MTS and Foresight streaming.
- MTS Turnover Scale: Managed trading services volume reached €45 billion, with 50 new clients onboarded in 2024 and a pipeline of 42 more in integration, fueling both revenue and trading margin gains.
- Content and Product Breadth: 40% of clients now take four or more SportRadar products, a sign of deepening wallet share and cross-sell potential.
- Geographic Diversification: U.S. revenue grew 30% YoY; rest-of-world up 9%, with some quarterly choppiness in international advertising spend but sustained annual momentum.
The company’s share repurchase program continued, with nearly half of the €200 million authorization completed, reflecting management’s confidence in long-term value creation. Importantly, the raised full-year guidance does not yet include the pending IMG Arena acquisition, signaling further upside ahead.
Executive Commentary
"We delivered all-time record quality revenues up 14% year over year, once again demonstrating the strength and durability of our business. Our performance underscores our position as a mission-critical partner, deeply embedded in the global sports ecosystem."
Karsten Kirl, Chief Executive Officer
"This past quarter, Sport Radar delivered revenues of €318 million, an increase of 14% as compared with the second quarter a year ago, driven by higher product uptake from existing clients, incremental spend from new clients, continued U.S. market growth, and strong trading results from our managed trading services business."
Craig Telensine, Chief Financial Officer
Strategic Positioning
1. Managed Trading Services (MTS) as a Growth Engine
MTS, SportRadar’s outsourced trading platform, saw turnover grow 23% year to date, reaching €45 billion. The company’s ability to onboard 50 new clients last year and maintain a robust pipeline (42 in integration) has created a flywheel of volume, data, and algorithmic improvement. Clients increasingly rely on SportRadar for trading while focusing on marketing and branding, reinforcing SportRadar’s position in the operator value chain.
2. Content Portfolio and Product Penetration
SportRadar’s content depth—over 1 million matches annually across 85 sports—enables it to cross-sell and upsell effectively. 40% of clients now take four or more products, and management sees meaningful runway with the remaining 60%. New product launches (micro markets, Foresight streaming, enhanced Bundesliga offerings) are driving both engagement and incremental revenue opportunities.
3. U.S. Market Expansion and Diversification
The U.S. segment, now 28% of total revenue, grew 30% YoY, benefiting from both the underlying sports betting market expansion and SportRadar’s ability to penetrate with premium products. In-play betting is approaching 50% of pre-match volumes in the U.S., with management targeting 70%+ over time—a conversion that directly lifts EBITDA given the high incremental margin per point of in-play share.
4. Technology and AI-Driven Efficiency
AI and automation are increasingly central to SportRadar’s operating model. Engineering productivity is up 40% thanks to new API tools, and AI-powered customer support is delivering faster resolutions. These investments are streamlining infrastructure, reducing friction, and supporting scalable growth without proportional headcount increases.
5. Disciplined Rights Acquisition and Capital Allocation
SportRadar’s disciplined approach to sports rights was on display as it passed on loss-making or non-strategic data deals (e.g., European Leagues and Serie A). The pending IMG Arena acquisition is expected to be accretive across revenue, EBITDA, and cash margins, further strengthening the content moat. Capital allocation remains balanced between buybacks and organic/M&A investment.
Key Considerations
SportRadar’s Q2 results reflect a business extracting leverage from scale, technology, and client penetration, but also navigating a shifting rights and regulatory landscape.
Key Considerations:
- Client Wallet Share Expansion: Upselling and cross-selling remain critical, with 60% of clients still taking fewer than four products.
- U.S. In-Play Betting Mix: Every 1% shift to in-play is estimated to add €6 million to EBITDA, a powerful lever as the U.S. matures.
- Advertising and Media Integration: Media and tech clients are increasingly seeking SportRadar’s data and streaming APIs for fan engagement, creating an adjacent revenue stream.
- Brazil as iGaming Testbed: Early traction in Brazil’s newly regulated market positions SportRadar for future international iGaming opportunities, with 50 operators integrated to date.
- Rights Cost Visibility: Long-term contracts and a disciplined acquisition strategy provide cost predictability and margin stability, but also require vigilance as competitive bidding intensifies.
Risks
Competitive intensity in sports rights bidding remains high, and undisciplined acquisitions could erode margin structure. Regulatory uncertainties, particularly around prediction markets and international expansion (e.g., Brazil, APEC), may impact growth trajectories. Quarterly volatility in advertising and sports rights payments could drive near-term cash flow fluctuations, though annual conversion remains strong.
Forward Outlook
For Q3, SportRadar expects:
- Seasonal step-down in free cash flow due to timing of sports rights payments
- Continued margin expansion as operating leverage builds
For full-year 2025, management raised guidance:
- Revenue of at least €1.278 billion (16% YoY growth)
- Adjusted EBITDA of at least €284 million (28% YoY growth)
- Free cash flow conversion above 2024’s 53% rate
Management cited sustained operating momentum, robust client pipeline, and high visibility on rights costs. The guidance excludes any contribution from the pending IMG Arena acquisition, which is expected to be accretive post-close.
- Focus remains on client penetration, innovation, and disciplined rights management
- Expect continued U.S. outperformance and ongoing iGaming experiments in Brazil and other regions
Takeaways
SportRadar’s Q2 confirms its position as a scaled, diversified platform with multiple growth levers and strong margin discipline.
- MTS and In-Play as Margin Catalysts: The rapid scaling of managed trading services and higher in-play mix in the U.S. are driving both absolute and incremental margin gains, with direct EBITDA sensitivity.
- Content and Tech Moat Deepens: The breadth of rights, coupled with AI-driven productivity, is enabling SportRadar to both out-innovate and out-operate smaller competitors, while disciplined capital allocation preserves flexibility.
- Watch for IMG Arena Integration: The pending acquisition is set to further consolidate SportRadar’s content leadership, with immediate financial accretion and long-term strategic upside.
Conclusion
SportRadar’s Q2 results demonstrate a business executing on all fronts—scaling high-margin services, expanding in key geographies, and leveraging technology for operational leverage. With a raised outlook and strategic discipline in rights and capital allocation, the company is positioned for durable, compounding growth, though vigilance is warranted as the competitive and regulatory environment evolves.
Industry Read-Through
SportRadar’s margin and free cash flow gains signal a broader trend: in the sports data and betting infrastructure space, scale, rights visibility, and technology integration are increasingly separating winners from laggards. The shift to in-play betting in the U.S. is accelerating, forcing both operators and suppliers to adapt tech stacks and product portfolios. Rights bidding remains fiercely competitive, but disciplined acquirers with diversified revenue streams and robust client penetration are best positioned to deliver sustained value. Adjacent moves into media, streaming, and iGaming suggest further convergence across the sports entertainment ecosystem, with data and engagement as the connective tissue.