Genius Sports Limited (GENI) Earnings Call Transcript & Summary

Let's get started, stay on time. We're very pleased to have Genius Sports. Nick Taylor, CFO of Genius Sports. Nick, thank you for coming. How are you today?

Yes, good. I was just -- thanks, Jason. It's a bit busy week for everyone, isn't it? On investors side. It's my third Investor Day this week, and there was a moment yesterday when I've been talking, like, doing my 12th meeting that I was worried we might end up having to do this by [ Mine ] because my voice is going. So apologies if it sounds a bit croakier than it normally does, but I'll keep drinking water, Jason.

You sound good. You sound good.

[indiscernible] we're okay.

All right, so maybe I find that investors, since you're a relatively young company, people are still sort of getting up to speed. So maybe just a super brief overview of sort of who you are, what your role is in the broader Sports ecosystem.

Yes. So, yes, we are a young company. I mean, we've actually existed for about 15 years, but we listed 3 years ago. So what do we do? We partner with Sport and we collect their live data and we monetize their live data. That's in essence, what we do. We've traditionally done that mostly in the betting markets, which is kind of I guess, where we're best known for. But increasingly, we monetize that in the media markets and the broadcast markets based on the technology that we have, because we were found as a technology business.

Okay. And what was sort of the generally -- the origin story or the thesis?

Yes, of course. So it's Mark Locke, who's our Chief Executive, he was our Founder. So he found us -- actually, I did ask him the other day what date we actually started, and he couldn't quite remember, but -- he told me, it was around about 2005, 2006 is when he started. So it all came from in-play sports betting. So in-play sports betting, that what I mean by that is whistle-to-whistle. And you hear now U.S. Sportsbooks [ talk about ] -- Jason Robins, he talked about it quite a lot yesterday actually at another conference around in-play sports betting as being a major driver. In the U.K., in-play sports betting mature market, around about 70% of all bets are kind of whistle-to-whistle. So Mark actually started the business really as a sort of mathematical algorithms. What he went to do is he said to the Sportsbooks -- the actual bookmaking itself is just a commodity on an in-play sports bet. Nobody is moving from 1 sportsbook to another to see if you get better odds on who scores the next soccer goal or what's -- who gets the next touchdown, because by then you've chosen which sportsbook you want to go on to, because of the customer journey, because the way they're treating you as a customer, because of bonusing. And therefore -- actually guys, we can do that cheaper than you can. You don't need everybody in your organization looking at this because it's really just a mathematical algorithm of calculation. That's where Mark started, and he had some success at that working with U.K. Sportsbooks. He then probably about 10 years ago realized that's great, but the real leverage in the relationship comes from actually owning the data in itself. So what Mark then went to do with us in the organization was to actually partner with Sports to collect the data that sells. I mean, go up the source of the river, if you will.

Yes.

And that's really where the Genius of today kind of grew from. So what we do is we partner with 500, 600 sports leagues and federations around the world. And everyone knows us because we have a relationship with the NFL or U.K. Soccer or NCAA, but it's also with Singaporean second division basketball, or Polish handball or Czech volleyball. And what we do is we collect all of that data and we do that on the whole for most people, is by contouring our own technology suites. So we digitize those sports on behalf of that. We then get the data and then we monetize that data, as I say, we do this. Because in the betting markets, what's also important to understand is that the NFL is a very important, clearly a very important marquee product for a FanDuel. But it is only 276 games. And if you go onto a FanDuel website -- and what is it now? It's 5 to 11 on a Friday. There will be something you can bet on now on FanDuel and DraftKings and Caesars. And at this time of day, it's probably Asian. It might be Singaporean basketball or it might be Turkish handball. So those -- that long tail of events that we're talking about actually have real value to sportsbooks. And the way we go to market is we sell that all as an overall package.

Okay. That's a perfect summary. Now, your top line has been growing 20%-plus over the last few years. And you said you can grow at that rate for the foreseeable future if you could help sort of unpack sort of the underlying drivers that give you that confidence, under whatever logical buckets you have?

Yes, yes, of course. I mean, the 2 main buckets that we at the moment, the way we talk about our business is either in the betting business or the media business. There is a Sports section which I'll cover as well. So if I look at betting, which is kind of what I've just talked about, the sort of how it evolved. So we go to market 2 ways in those relationships with sportsbooks. We either do, we call it a fixed fee kind of -- it's not fixed. There are lots of levers of growth within it, but it's a bit like a SaaS deal, and all you can eat. Somebody will pay $5 million, and for that, we'll give them 100,000 events a year. And that sportsbook can then choose whichever of those events -- of all of those events we've just been talking about, they can choose which those events are. So there's a repeatability, there's a visibility of those revenues, and that traditionally, that's how we've gone to market in -- for example, the European market, in the U.K. market. The U.S. market, we've come to market differently. We take a rev share model. Obviously, given the significant growth in the U.S. markets and other markets; Brazil, for example, coming up, I'm sure we'll touch on in the next 30-odd minutes. That's also kind of rev share model. And what we do is we take a percentage gaming revenue on that basis. So at its simplest, if you believe gaming revenue will continue to grow year-on-year, then Genius should, at a base level, grow the same as much and indeed more than gaming revenue. So there's a whole growth aspect around TAM. So as new states roll out -- that's an important piece, but also existing states, you look at -- just looking this morning, New Jersey, which has been betting for 4 or 5 years now, year-on-year it's January to July, bet -- GGR and handle has grown by over 30%. So people sometimes forget that existing states, there's still significant growth as sports bet has become more sophisticated across the -- over the years. So that's definitely one of our growth levers. Another growth lever in the betting space will be in-play sports betting. So as I said to you, in the U.K., in mature markets, it's about 70%. U.S. market is probably, at the moment, probably inverse there. It depends on the sport, it depends on the sportsbook, it depends on what type of bet. But you're looking at somewhere in the region of about 30% of sports bets being in-play sports betting at the moment. And it will go. It will drive to that 70% position indeed. I think, Jason Robins said it yesterday, is that actually U.S. Sports in many ways lend itself to in-play sports betting, given the natural breaks in sports itself. So it will move. And now, why does that matter? Well, it matters for lots of reasons. It's great for sportsbooks, it's great for the sport themselves because nobody's more engaged than the guy who's got $10 on the next, on the score at the end of the fourth quarter. So it's great for engagement through dead games. And I know, last night's game was anything but a dead game, it went right down to the wire. But a lot of games this weekend, and you get to the fourth quarter, the results will be known by that point. So in-play sports betting, driving engagement. The why it's important for Genius, Jason, is because we take, broadly speaking, just a generalization, about 3x as much revenue from an in-play sports bet as we do a pre-play sports betting. So if you were to put $10 on the game last night, 10 minutes before kickoff, traditionally we've earned around about 1.5% of that. Again, massive generalization but it -- because it varies from sport-to-sport, so -- but it's about that number. You put exactly the same bet, $10 into the game. We earn around, we've traditionally earned about 5.5% of that bet, with zero additional change in cost base. And therefore in-play sports betting, therefore, as it moves, as sportsbook's product improves, as our product helps develop that means that that's another big growth lever of all -- of us. Back to your 20%. There are lots of other product related growth, but I'm conscious of time, I talk about this for a long time, but that's a sort of broad where betting revenues grow, price is obviously another one. And I'm sure we'll talk a little bit coming up about renegotiation with sportsbooks that are currently ongoing. But that's clearly something as well. Over the course of not just the next 2 years, but the next 10 years, the next 15 years that we'll continue to take.

Is there -- so I think in general, U.S. rev share, international more fixed price. Is there an assumption that international moves more to rev share or U.S. moves more to fixed or you don't really care or?

No, I mean. I don't envisage the U.S. moving away from rev share for the time being simply because of the growth in the U.S. ongoing market. Now at the right price, we would absolutely offer a fixed deal. It's a bit like length of a deal. Sportsbooks on the whole, again, massive generalization want longer term deals because they want the visibility of what that looks like. On the whole, we'd prefer shorter term deals for the exact opposite reasons, but it's just a negotiating leverage. So if people want to fix it, then we're absolutely interested in that answer. But it would need to be at the right price in the same way as we're negotiating all sorts of different aspects of the contract. European, it tends to be fixed deal, but the growth isn't quite the same in that. What tends to happen is, we go into a new growing market, as I say, like Brazil, that tends to naturally lend itself more to a variable model for us.

Okay. So it seems like given the growth in GGR and the direction of travel for in-play betting, the 20% growth doesn't seem like a highly aspirational or stretch goal. It seems something that is reasonable confidence [ of achievement? ]

Yes, absolutely. If you look at our last 3 years, and I always try and look at proof points we've grown at -- these numbers won't be exactly right, but we've grown north of 20% in the last 3 years. I think, our current guide this year, which is $510 million of revenue, gives us an implied 23% growth from 2023 to 4 (sic) [ '24 ]. So in the -- and in the business we're working in right now, it doesn't feel like a business that's slowing down. And therefore, naturally we wanted to tell the market that we felt that, that was a sustainable business. Now, it won't be linear. There might be some years where it might grow 18%, but there might be some years that grow at 28%. So it was kind of a blend of you that we felt 20% on an ongoing basis felt absolutely reasonable.

And primary risks to that, to sort of materially underachievement. I mean, would you say recession is a risk? Or if California and Texas don't legalize? Or are there -- what are the potential big banners in the world?

I mean, medium term, I don't think there really are any. On that basis, we're in a very fortunate position here, which is we talked about the U.S. and growth in in-play sports betting and so on and so forth. The U.S. is about 30% of our revenues today, so proportionally it's getting more important. But it'll never become so important that it's probably a majority of our betting revenues, for example. And not having all those eggs in one basket. I don't -- yes California, you mentioned California -- California or Texas opening up. Well, clearly that's good news for Genius. It's good news for the market, but it's just another state. If you think about 70% of our revenues are non-U.S. related. If you think about Illinois tax, for example, does it mathematically impact our revenues? Yes, because we take a percentage of gaming revenue. But if you think about the funnel saying, well, X is on media -- we'll talk about media, I'm sure, in a second. So X is on media which isn't impacted by that 70% is non-U.S. Well, they're not impacted by that -- 40 or 30 odd states betting. By the time you go through the funnel if you will, actually any individual state behavior, or indeed any individual hold, for example, on a month doesn't really have that much material difference for us. Yes, a good month hold on Sportsbooks is good news for Genius, and conversely, bad news is bad news. But it would have to be bad every single month to have anything that really to impact those revenue growth that you're talking about. Super Bowl, I think it's fair to say it wasn't -- that Super Bowl '24 wasn't great for Sportsbooks with the sort of Mahomes effect coming back to win. That impacts our revenues? Yes, it did. But nothing that was anywhere close to being a material number for us because it was one game out of 200,000 that we offer on a global basis.

Understood. What about competition? Can you talk about competition?

Yes. So we've concentrated quite a lot on data here. I mean, there's a whole other side of our business around media and tech, which are significant and going to become increasingly significant parts of our business. Our media programmatic businesses will do there or thereabouts $100 million this year. And our tech, you've heard us talk about GeniusIQ, Second Spectrum that we bought 3, 4 years ago. One of the world's leading AI and Computer Vision Sports business is really driving our growth around BetVision, around some of our announcements we've made around U.K. Soccer, around European Soccer. And Jason, we'll cover that today. But what I'm saying is, no, there is no competition that has the same level of tech. In each one of those verticals we'll have our own competitive analysis. So in that AI-Computer Vision world, our major competitor is a company called Hawk-Eye. Hawk-Eye are part of the Sony Group, for example. So on the data side, which is obviously better known, you are major competitors, and it's fast becoming a bit of a duopoly, is Sportradar. Sportradar is a wonderful company and does lots of things very well, have scale, but they don't have the same. We don't see them as competitors in our other verticals because they don't have the same technology. What I would say on the data space, though, in terms of competition, is to say it's fast becoming a duopoly. We have all the rights that we need to succeed. I know Sportradar have said the same. Our NFL deal is now out to 2028. Our U.K. Soccer deal that we announced in the last quarter goes out to 2029. We have a long-term NCAA relationship. Things like Argentinian Soccer, that's going to be very important for the latter. I mean, we've had out to the end of the decade, and therefore we don't need anything more. And as I say, I know Radar has said the same. So people think about us being very competitive and we are on a right-by-rights basis for obvious reasons. But there's plenty of opportunity for us both to do very well over the next 6 or 7 years. And frankly, make plenty of money for both of our shareholders. So competitive? Yes. But we can coexist alongside each other perfectly well.

And what about the smaller players outside of Radar? I mean, they -- is this sort of a, it sounds like a scale business where you need to have sufficient scale or what?

I think, that's right. I think, when we listed 3 years ago, I think if you went back to our listing documents, we probably talked about another couple of competitors in there. I think you've talked about IMG Arena, which is part of the Endeavor Group. Stats Perform, which is a private-equity owned business. Good businesses have some rights in there, but they definitely haven't grown in the size and scale in the way that Radar and us have grown. IMG Arena is up for sale, and Endeavor Group publicly announced that in their last quarter. So there is -- we're seeing both of those organizations less now than we did 4 years ago. I think, [ as I said ]

Okay, okay. When you told the origin story, it sounded almost like you were a technology company first, and this was just sort of a natural way to express the use of software and technology. So can you spend a bit of time and go a little bit deeper, both in terms of the technology you're most excited about for the Sportsbooks? For Sportsbooks that want to advertise? And for the Leagues and Federations where there's like a different customer potentially?

Yes. I mean, you're absolutely right, Jason. That's exactly right. And that DNA of the technology business lives on today. And what we're seeing is that technology is all included in every single part of our business. So when you look at it in a betting business, for example, one of the products which I know is relatively high profile at the moment is a product called BetVision. BetVision is an integrated betting slip with live streaming through -- for NFL that you watch on a Sportsbook. That's live, we went live last season with, I think, it was 4 Sportsbooks. It was live last night. What that looks like for those in the room who don't actually know what it is, so it's almost [ no latency ] so certainly good 45, 50 seconds ahead of that, you would have seen on NBC last night. So it's actually broadcast stream. And what we do is we overlay our Sports AI, Computer Vision graphics and stats that you see as a consumer you've traditionally seen on places like ESPN, you've seen it on Amazon "Thursday Night Football", you've seen it on [ CBS RomaVision. ] You see it in Premier League productions on Peacock in the U.S., you see it on -- goodness me, NFL.com. All of this, we do all of that. And now you see that on the, on Sportsbooks. And you see that, but then you also have the integrated betting sling. So what you do is you click on the player that live, you click on that player, all the betting markets come up for that player and you drive that. So that suddenly becomes a very, very effective tool for Sportsbooks in terms of dwell time, in terms of in-play sports betting. I can't give you any stats because they're not our stats, they're Sportsbooks' stats, unfortunately. But the eyeballs on that have been really quite significant. And that is -- so you see our tech in that within -- in the betting space. That's a great example of that -- of what you see in the betting. In other areas of the business, what you see is.

Can I just pause you right here?

Yes, please.

It's on the betting side, I want to make sure I have this right. So I'm watching television and there's a bunch of graphics on there. But when you said you click on a player, this is the player holding their mobile phone at the same time while they're watching television?

Yes. So you see it through tablet and mobile, so you can't second screen it onto TV, but it becomes a completely interactive way of watching the game. And the engagement really -- I mean, it's just -- all, that's all betting really is in-play sports betting is just another -- is the ultimate form of entertainment. As I say, nobody's more engaged than the person, the guy or the girl who's got $10 on who scores the next touchdown. That's what betting is. So what you find is -- that's why in-play sports betting is coming, is because what you end up is the bet sizes tend to come down because you don't get the past the acquisition odds that you do on the pre-match sports bet. And you think of it as akin to almost like an iCasino product, because you win your bet in the second quarter and then you recycle that bet in the third quarter and so on and so forth. So that's the way to think about it.

Okay. Sorry, I didn't mean to interrupt.

No, no, that's fine. Okay. So let's talk about media quickly, because we haven't really touched on that, so just to give everyone an understanding of what we do, and then I'll say how technology plays into it. So we have a programmatic media business. What that basically means that if any brand wants to associate themselves with sport, then we are the go-to people to be able to do that. And we've traditionally done that through a managed service, and it's traditionally done with Sportsbooks. And why this -- why Genius? Well, in Genius, we have the -- a unique set of data. So we have all the first-party data that we have through our sports leagues and federations, through our results, through whether that's NFL.com or other sports leagues and federations. We obviously have all the live sports data as is, because that's our bread and butter in terms of what we're doing. And that allows us to place real time to the right person, the right context, at the right moment in the sport to attract that individual to the brand that we are working on behalf of. And as I say, traditionally, about 85% of our revenues have been with Sportsbooks. Such traditionally being with Caesars and FanDuel and Fanatics and so on. That's not just an acquisition tool, it's also a reengagement tool. So it works. We work as much in a New Jersey environment at the start of a season trying to reengage fans who perhaps haven't bet for 4 months as it is about finding new [ fans ] in North Carolina, that's just legalized sports betting. But it's equally appropriate for any sports, for any brand that wants to attract that sportsperson. So if anyone listens into our quarterly earnings, you'll hear us name check people and brands that we've worked with recently, and guys like Pepsi and American Express and Heineken and so on and so forth. And that's great. As I say, it's about $100 million business right now. It's another way that we're able to leverage those relationships with Sportsbooks. It's another way we're able to leverage our rights position within our contracts with Sportsbooks. We tend to have a minimum media spend that they commit to on that basis. But in technology terms, the next step for us, and this is going live now, in fact, I believe it's now launched, is a self-serve model. So the model that we've been doing traditionally is a managed service. So we'll manage the whole process for a DraftKings or a Fanatics. The next step is to a self-serve model. We just built our own DSP on that basis, as I say, which is ready to go now. And that opens up a whole new addressable market of all the agency spend, if you know the Omnicoms of this world who are frankly doing the managing on behalf of the FMCG brands, and now they would so us. So again, for a technology perspective, you can see that we spend a level of R&D every year. This is the sort of thing that we are spending in order to drive that product. And that will be a significant part of our media growth story, going forward. Media has done very well. It's growing at, I don't have off the top of my head, but it's what it is year-on-year, but it's 30%, 40%. It's that kind of number on an annualized basis. But now the in-play -- sorry, the DSP self-serve model is just another string to our bow that you'll see and you'll hear us talking about as we go through '25 and beyond. Because again margin-wise, Jason, the thing to remember about that, and we'll talk about margins at some point is, that's really at 100% margin. That's -- or close to 100% margin, which obviously makes a significant difference in terms of our margin profile. So -- if you, again, if you think about business, that's the data side, the betting side, and how technology is helping drive that. You've then got the media side. And then the third part is what we call Sports. We've not quite got that naming quite right, in truth. And we spent 3 years trying to work out how to do that. We look at that as an enabler. All of this relies on our relationship with Sport. That's obviously critical. As you've heard, just not just with U.K. Soccer or NCAA, but the other half, the 300,000 events that come from 500 to 600 sports that we're working with. We gain revenues from some of those relationships directly. So, for example, we'll work with sports, we'll work with teams and leagues, we work with most of the NBA franchise. We work, I think, with all now the NFL positions, and we work with 19 out of the 20 Premier League U.K. Soccer teams. And that's through our AI and again, through Computer Vision, using insights, using tools, using our vast level of data working with those guys. But what we're increasingly doing, good example is our U.K. Soccer announcement that we announced in July is our AI, Computer Vision, Zero Latency technology has all sorts of other user cases, and one of those is semi-automated offsides. So U.K. Soccer -- and I apologize, I know sometimes I talk to rooms and everyone knows more about U.K. Soccer than I do. And other times, not so much. But offside rules in U.K. Soccer is a hot topic, I think we'll say, and it's done manually today, and we've just won the -- as I say, for this season, Go Live, sometimes live before Christmas, where it will all be automated or at least semi automated, I think, is what we're calling it. That is a very interesting and strategically important deal. Not only because it's U.K. Soccer and it's massively profiled, it's the biggest soccer league in the world. And therefore, classically tech. If it's good enough for the Premier League, it's probably good enough for the other 125 professional soccer leagues around the world, and you build it once and sell it a thousand times. But it's also, this is all about ingraining ourselves in the sports ecosystem around. We announced in the same week that we had won that, and we had extended our U.K. Soccer data deal. You can understand our job is to ensure that we are right across all of that sports eco platform. And this is a really good example of that.

That's interesting. And so the customer there would be the league itself.

The customer there would be league itself, absolutely. That's exactly right.

Okay.

Another one, for example, is we've announced UEFA. So we announced a deal with UEFA, which is the global, which is the European umbrella of soccer. So look after all the professional leagues in Europe, and we just announced that we are their official tracking partner. In the same way, I think we've just been announced as we're the official tracking partner for the WNBA here in the States.

And what is tracking partner?

So, tracking is providing -- it is providing the tracking data, live tracking data to, in this instance, UEFA. And that's very valuable data for UEFA. And at the moment, it's valuable data because they can provide it to the Sports in terms of their own analysis, their own coaching tools. But that same tracking data, that same technology that's providing that is also providing the semi-automated offside, it's also providing broadcast to what we're doing with, as I say, with ESPN, and what we're doing with CBS and so on and so forth. So by getting that deal with UEFA, that's putting our technology across 26 different professional leagues, 120-odd stadiums across the Spanish League and the French League and the Italian League. And it's that same data, that same technology that's providing all of these different user cases. So again, it's a little bit of -- okay, UEFA are paying for this right now, and that's great. And look, I'm CFO. This is all good news to get, talking about our growth rates, but the really strategic, interesting thing for us...

Is they are asking for that, yes.

...is what that technology will then provide over the years.

Okay. That's super helpful. Are there any questions that anyone has for Nick? We can take any questions. If you do have them, just feel free to raise your. Okay. We'll just wait for a mic, if you don't mind. Unknown Attendee Obviously, it seems like a different story here in the States with markets opening up, but I'm Australian and there's been proposed legislation around the curbing of sports betting advertising. Maybe in some of your more mature markets, is that a concern or a consideration at all?

Yes, and we see it. You're actually -- we see in some of the European markets, Italy is a good example in the European markets at all. The majority of our media work is U.S.-based. So I talked about 70% of our revenues being non-U.S. and 30% U.S. Within our $100 million media, it's much more swift to the U.S. So is it creating headwinds in our Media space in some of the mature markets? Yes. But the numbers that were actually driving from those markets are really not meaningful anyway, and therefore it's not a massive concern. The other thing about our Media space is also, is -- again, all the other technologies we're doing, we've just done a deal with X called Genius Trend over the summer, which was specifically in relation to the Olympics, which is not a betting sport really at all. There's very little betting in the Summer Olympics. And that was working, as I say, with social media. It was with Hershey's, the chocolate company, about getting their brand on the social media attaching themselves to the key moments in sports. So there are so many strings to our bow is a bit what Jason was asking around about tax rates of California. There are so many strings to our bow, that there will inevitably be headwinds around the ecosystem at various points. But there are so many different growth levers that I'm in a fortunate position to not to get too concerned about anyone. We came out with $480 million as a revenue target at the start of the year, we're now at $510 million. That $480 million included 1/4 of Brazilian sports betting, because at the start of the year we felt that brazilian sports betting would be live by [ X. ] That's why it's no coincidence that the game tonight's in Sao Paulo. That hasn't happened. That's a headwind. But because of all the different levers, we're able to manage that elsewhere. And therefore, I don't know if the phrase translates into the U.S., but there's a phrase in the U.K. about having all your eggs in one basket.

Yes. I know that translates in U.K. I never know. Sometimes I say these Britishisms and people look at me as if I'm very strange. But that's the case for us. Any other questions? So, Nick, you brought up some of the visibility you have and your data rights sort of being locked up in the NFL through '27, '28. I think you said the football data go through '29.

Yes.

Are there sort of, outside of those known-knowns, are there other things that investors should think about in terms of renewing smaller things or any sort of disruption or?

It's just, there are renewals all the time, but none of them material.

Okay.

And what I'd say about the ongoing renewals is that because we're a technology business and because we ingrain ourselves in the technology, the friction factor to get rid of Genius is very difficult. I mean, our churn on Sport is almost 0 churn. Because if you think about -- and it's the same for the major leagues as well, but if you think about the minor leagues and you think about how we are helping digitize in their sport, and we'll give them Competition Management systems, we'll give them Player Registration systems, we'll give them OTT platforms, media feeds, scoreboard beads, the websites themselves. It means that if anyone ever wanted to leave Genius, and hopefully there's no reason to do so, but if they ever want to do so, it's very, very difficult for them to do so practically because they lose all of that suite of technology. As I said, nobody else has that suite of technology. So from a rights perspective, we have all we have. All the plans we set out, we've talked about our margin position. We've talked about those of us who follow you closely will see that we went from a margin negative -- EBITDA margin negative position. I think it was back in 3 years, 3 years ago we were 5% margin business; 2 years ago, we were 12.5% percent margin last year. I think our current guide, this is around about 16.5%. You can see that margin progressing. And we've said publicly, within our line of sight, we will be a 30% EBITDA margin position. And we were able to say that with confidence, Jason, because that's exactly as you say, the visibility of our cost base is huge. Rights step up every year. Yes, of course they do. But I know to the exact dollar what those rights costs will be in 2029 to U.K. Soccer or 2028 to football. And the operating leverage that we have in the rest of the business is huge. I think, our operating costs over the last 3 years, I think, have actually declined possibly rather than gone up. But there's certainly, if we sell our data to more Sportsbooks, if we were able to monetize our rights through different technologies, if we were able to get more price from a sportsbook, if more people are betting on it because of TAM, if more people are betting on in-play sports betting, none of that impacts my cost base by a single $0.01. So you suddenly see that operating leverages in that business.

That's super helpful. One of the unique things about your company is that the NFL is an owner, I think 8% or something?

Yes. That's right. 8% on a fully diluted basis, yes.

Okay. What is that? I mean, how should investors sort of think about? Do you think that it gives you advantages or are there disadvantages? There any sort of weird things that?

Okay. Yes, it's great. Is there anything weird in that? No, we treat the NFL like any major shareholder. We meet them after earnings in the same way that we do. And as you would expect us to be close, both from a shareholder perspective, but obviously from a partnership perspective. I would hope that shareholders take some real comfort in that, that we are directly aligned with the NFL in terms of a successful Genius, is a successful news for the NFL. And in terms of anything beyond that, there's nothing peculiar. I would hope that people think that's a good thing.

Okay. On the OSB side, are there any sort of major negotiations that are coming up or anything that people should think about as positives or risks?

Yes, I mean, U.S. Sportsbooks, we had 3-year deals with U.S. Sportsbooks, the majority of U.S. Sportsbooks, and they have -- those Sportsbooks, those 3 years ended in right now, [ '24. ] So we are in the process of completing those negotiations now. I think, Jason, it's fair to say they've gone exactly how we thought they would go, both in terms of quantum, but also in terms of timings. I think it's fair to say the majority of the deals have now been agreed. And they're of a similar size and scale, I'd say, as deals that we've historically done. We're very happy with them. The lengths are different going forward. Outside of our U.S. Sportsbooks, on a European basis, we're always -- there's always some negotiations going on within that.

Okay. I don't have the full history of Genius, but at least for the public data that we're looking at, as you've been public, you've never had any debt?

No. We've always been a debt-free business and continue to be a debt-free business today. It's -- we're at a really good tipping point of the business. We were cash positive in the second half of last year, and we will be cash positive 2024 with the first time we've been cash positive across the year. I think we had, if I remember right, $93 million in the bank account at the end of Q2, so the end of June. And entirely debt-free. So yes, very positive. We've just extended -- we've just taken on a revolver for the first time through some of your -- through yourselves, through Citi and Deutsche Bank and Goldman, which I think is $120 million. So from a capital structure, we're in a great spot, because what I'd also add to that in terms of capital structure is our private equity owners Apax, who ended up as -- they were, I think they had 40% of our shareholding when we first came out into the market in 2021. They sold their final segment in July this year. And therefore, from a capital markets perspective, that has all been tidied away as well and very clean going forward. And you can see that if you look at our liquidity profile, I mean, our stock, it has increased significantly over the last 8 to 9 months. Thanks to, as I say, Apax selling down.

So in terms of the -- given that you have no debt, given that you generate free cash, have this revolver, you've done a handful of small tuck-in acquisitions, FanHub, Spirable, Second Spectrum. Is that how investors should think of the most likely use of your cash flow is like small tuck-ins to augment the platform or?

I'd say a couple of things on that, Jason. I think, first of all, we don't need anything. We have everything we want. The plans that we've set out publicly and we've talked about today, we have all that technology, that technology exists today. That doesn't mean that there aren't anything opportunistic that there may or may not be out there. But what I can say is it because we don't need it, we're coming at this from a position of strength. We will only do that if we work very hard to be cash positive. We look very hard on that EBITDA margin to get to where it is. The deals would need to make sure that they fall into those 2 critical positions, is what I'd say. The other thing, from a cash perspective, because I'm going to preempt your question, Jason, because I suspect that the next one is things like share buybacks. Tidying up the Apax stock in July makes that a lot more straightforward. We don't have publicly a buyback program in place, but I think it's fair say it is something we are constantly monitoring, given, as you say, our cash profile not just in 2024, but the cash profile that will continue to become really quite significantly cash accretive at [ $225 million. ]

Yes. That's fantastic. Thank you so much. Any questions? Our one final check on questions from the audience? Okay, I'll take that as a no. Thank you so much, that's great.

No, well, thank you, Jason. Thank you.

Yes, absolutely. Thank you.