Mark Locke: There’s another also sort of softer point on the Media side is the growth that we’re getting in the revenue delivery that you’re seeing is really from the, what I call, the existing media business only. I mean, it’s from the business that you guys are all aware of and you see. It won’t have escaped you. I think we’ve talked about it before that, we’ve been putting money into different areas in the media space. We’ve been building new products, one of which is literally in launch phase at the moment, which we have I think, it’s fair to say, we’ve got no real revenue expectations in at the moment. We are feeling pretty good about that because that product is delivering really well. But again, that won’t be showing up until H2 of this year in the revenue lines.
The other thing that’s starting to look really quite promising and coming through really well, which again is also not in our view is, in the view that we’ve given is sort of some of the additional client split that we’re getting. Historically, this business has been all about really sportsbook revenue. I’ve mentioned a number of times in these calls that, we’re looking at bringing in different additional brands outside sportsbooks and driving revenue growth from media revenue growth from that. That’s something that we’re really starting to see come through more aggressively in the numbers. The split between sportsbook and non-sportsbook is looking quite attractive. We feel like we’re in a strong place on the Media side and we’re excited about not only the new products but also the new clients that we’ve started to bring on board.
Just on the renegotiations, look, there’s not a drop dead date where we suddenly start conversations and our job is to be a good partner of sport and to continually to have those relationships and have those conversations. We’re always talking to our partners and that’s not really, really changed. Clearly, there are dates around new seasons of sport, which you correctly identified, which will definitely feed into the numbers at some point. But again, at the moment, we are not putting too much weight on that in any of the forecasts that we’ve released to the market.
Operator: Your next question comes from the line of Jordan Bender with Citizens JMP Securities.
Jordan Bender: Good morning, everyone. We have a lot of good data in terms of the performance in the U.S. sports betting market, but the one missing piece we don’t really have is, Hard Rock in Florida. Maybe without getting into the financials of that, can you just talk about how you’ve built, helped them to build that business? Does the improvement in guidance in the back half of the year have any, or does the state of Florida have any play within that?
Nick Taylor: Hey, Jordan, it’s Nick. Florida and Hard Rock is a great example of the underlying success of the business model of Genius. Hard Rock just become a bigger customer of Genius’ if they continue to have the dominance they have in that Floridian market. I obviously can’t go into the specific details, but everything we’re doing for DraftKings or plant renewal or Caesars is exactly what we’re doing for Hard Rock as well within the Florida market. The events that we’re providing, obviously, there’s a lot of sports betting. There’s a lot of professional teams based in Florida. Right now, I think I called out one of the questions on media. There’s also been significant amount of media spend in Florida, particularly through social media over the first quarter as Hard Rock solidified their positions.
Jordan Bender: Great. And then on the follow-up, now that debt could be in the picture here, where could you be comfortable taking leverage up to for the sake of growth?
Nick Taylor: Yes. I think Mark touched on this earlier, Jordan. This is just another building block in our maturing as a business. Nothing changes in terms of our asset, what we want to do. It just gives us firepower to be able to be opportunistic. We’ve actually filed the exhibit today, so everyone can go and have a look. It’s pretty straightforward. Its $90 million as it stands. As I say, to be used as opportune as and when any circumstances detect.
Operator: Your next question comes from the line of Chad Beynon with Macquarie.
Chad Beynon: Good morning. Thanks for taking my question. Nice results. Wanted to drill into the in-play mix a little bit more. You said 22% was the number. Are you still seeing growth in older vintage states in terms of betting behaviors? I’m not sure if you have that detailed data at your fingertips. States like North Carolina and some of the newer ones in ’23, are you just seeing a higher starting point with in play? I think we’re all just trying to figure out what the ceiling is in the U.S.
Nick Taylor: Yes. Let me give you a couple. First of all, there’s a couple of questions in there. The first one around sort of more mature states. Yes, we continue to see significant growth in the states. They’re publicly available. You can see New Jersey. I think, was the first state that legalized in any meaningful way and that continues to grow significantly. I think if you look at things like Kansas that grow doubled year-on-year and its second year to its first year. Absolutely, we continue to see comp grow. We also continue to see customer behavior, I guess, become more sophisticated, which inevitably drives in-play sports betting. We’re seeing that on a state-by-state basis as well. As you know, product enhancement is the third leg of that in terms of growing.
We gave some very early statistics of BetVision, which is just our example but a really good example of product evolution in this space. We’ll continue to see that. Mark touched earlier about how BetVision is going to become more ubiquitous over the course of the following years In terms of where does this go in terms of U.S. market, we’ve consistently said in mature markets, in place sports betting is anywhere around that sort of 60% to 70% kind of the level of in place sports betting. We are absolutely confident to ensure that we anticipate the U.S. will ultimately end up in that position as well.
Chad Beynon: Thank you, Nick. On Brazil, you’ve touched on this a couple of times. I believe you’ve said that, it is factored into the back half of the ’24 guidance. Any details in terms of when the market is expected to launch and how meaningful this could be in the back half?
Nick Taylor: Yes. Yes, we have. We have a very small amount. In truth, it’s not a material amount for 2024. It’s not going to change the dial there. The latest we have is that would their licenses are being awarded in the second half of this year, probably in the fall, with expected betting to be legalized and to be actually us earning revenues in really sort of back end of Q3, Q4 for Brazil. As you know, there’s an NFL game happening in Sao Paulo in September, to help to drive the in place sports betting. We understand that, there are significant number of licenses that are going to be awarded. But in terms of TAM, some of the numbers on an annualized basis are really quite significant coming out of Brazil, certainly several billion dollars’ worth of TAM we’re anticipating. I wouldn’t get carried away for that for 2024, but that’s certainly something that’s a really significant opportunity in ’25, ’26 and beyond.
Operator: Your next question comes from the line of Eric Martinuzzi with Lake Street.
Eric Martinuzzi: Yes, I wanted to go and revisit the media strength that you had. Just from a modeling perspective, looking out to 2025, do you view this as kind of a new seasonality around the sportsbooks emphasizing that, Super Bowl, January, February, the March Madness, is this kind of something we should consider as the new normal or was this there was more of a macro issue with customer acquisition a one off, so to speak?
Nick Taylor: Hey, Eric. Q1 and Q4 have been traditionally our strongest Media segments, really following the U.S. sporting calendar. I think that’s going to be the case for 2024. As I said earlier, look, we’re delighted with 63% year-on-year increase. I think that’s probably a little bit hot to be sustainable, but we’re still forecasting given the uptick in guidance that was just given in this call. We’re expecting our major growth annually for the year to be north of 30%. We are certainly seeing a reacceleration of that business. As I say, on an ongoing basis, we’re not giving guidance yet to 2025. But on a number of questions, we’ve talked about it in terms of the shape of 2025 and how we’re expecting the tailwinds that we’re seeing in ’24 to continue through ’25 and ’26, that should drive those three key financial metrics that we talked about, which is the double-digit revenue growth, the expense in EBITDA margin and the continued cash increase.
Media will play not insignificant part of that.
Operator: Your next question comes from the line of Brett Knoblauch.
Brett Knoblauch: Hi, guys. Thanks for taking my question. On the guidance revision, can you maybe parse out the growth that you’re expecting between or was the revision mainly due to the Media segment outperforming or was it also some greater confidence on the bedding technology segment as well?
Nick Taylor: Brett, look, first of all, strength right across the whole business. We’ve got real confidence in what 2024 is looking like. In terms of the specific numbers, the majority of it is Media based on, obviously, the Q1 media performance and therefore, the confidence we have, particularly in Q3 and Q4, following on from Eric’s question in terms of media position. That’s the kind of makeup of the 2024 revised guide.
Brett Knoblauch: Perfect. Thank you. And then on the flow through of margins, could you just, I guess, remind us again, the incremental margins of the betting technology segment versus that of the Media Technology segment?
