Carsten Koerl : 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. 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. 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. As we think about the out years, we do expect to continue to grow. We are not giving long range guidance on this call, but if you look at our historical performance and the investments we are 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, 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. 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.
It’s just 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. The buyback is just one aspect of our capital allocation strategy.
Operator: Our next question comes from Robin Farley with UBS.
Robin Farley: Great. Thank you. 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: Yes. 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. From that perspective, it’s expected to be profitable. Obviously, it came 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: Robin, maybe I can add. We expect to outperform the market growth in the U.S. according to the statistics, which we all have. We think we have a leverage here. We will grow stronger than the market in the U.S. To repeat, yes, we expect to be profitable in the U.S., more profitable than we have been this year.
Robin Farley: Okay. Thank you. Maybe just as a follow-up, just as you’re talking about how your sports rights costs are fairly fixed now and there’ll be this operating leverage and with the growth new markets coming on. But is there a thought that, you guys might at some point not on the call today, but that you might give three 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 that’s something you think you might do in the next few quarters, or any thoughts on that?
Gerard Griffin: No, there is thoughts on that in terms of giving more long-range outlook and a deeper look into the company, but there’ll be more to come on that in future calls.
Operator: Our next question comes from David Katz with Jefferies.
David Katz : 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 how the profitability there works?
Gerard Griffin : Yes. The actual sports rights cost is fixed. 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. As you think about that, it’s 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.
As you think about a fixed line for the sports rights and 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 : Maybe, you can add one element on it. That’s the live conversion. That’s a benefit for us. When we manage to convert more pre-match into live betting, that means from every percentage point which we can convert, it’s a EUR1.2 million flow through on our revenues without costs we are sitting on this property.
David Katz : If I can just follow up a little bigger picture question, which I suppose also seconds the appetite for some long-term targets, but we think about the next three 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?
