Sportradar (SRAD) Q3 2026 earnings review
Sportradar's US sales jump, but league costs squeeze margins
Sportradar, a supplier of live sports data and video to betting apps, rebounded in the United States while higher league fees squeezed its profit margins. Total sales rose 24% from a year ago as US revenue jumped 47%, driven by the IMG ARENA rights acquisition and new contracts with prediction market exchanges. Chief executive Carsten Koerl kept the full-year outlook unchanged, which by our math leaves revenue growth slowing to 19% in the fourth quarter.
| Revenue | €362.5M +24% from a year ago |
|---|---|
| US revenue | €98.0M +47% from a year ago |
| Adjusted EBITDA margin | 28.2% -0.8 percentage points from a year ago |
| Full-year outlook | Unchanged middle of the range: 18% revenue growth |
⚖️ Verdict: 🟢 Bullish
The story got better because fast demand from prediction exchanges and brokers eased fears that the American business had stalled after last quarter's outlook cut. Staff cuts also lowered payroll costs by 5% from a year ago, helping pay for expensive new league rights. One caution: the company still kept its full-year targets flat, so all of the planned full-year margin improvement sits in the fourth quarter.
The question now is how fast sales can grow once the IMG ARENA acquisition reaches its one-year anniversary in November. Either prediction market contracts bring in enough new money to keep growth near 20%, or growth drops back toward the single-digit pace of existing sportsbook customers. Fourth-quarter results and the 2027 outlook will settle it.
🐂 Bull Case
Prediction Markets Lifted US Revenue 47%
Sportradar supplies live sports data and streaming video to betting operators and media groups. Three months ago, a slowdown among traditional US sportsbooks forced the Swiss company to lower its annual targets, raising fears that its American business had stalled.
Instead, US revenue jumped 47% from a year ago to €98 million in the third quarter, lifting the country to 27% of total sales. Chief executive Carsten Koerl credited demand across its content portfolio, "including further monetization of the acquired IMG ARENA rights and significant contributions from across the prediction markets landscape." It expanded its deal with prediction exchange Polymarket to over 20 leagues and signed new agreements with brokers and market makers.
Because prediction exchanges let users trade contracts on game outcomes in states that have not legalised traditional sportsbooks, they give the business a new group of buyers. That fast growth faded the concern over slower traditional US betting, though one quarter while the IMG ARENA acquisition is still in the numbers does not settle what the underlying growth rate is.
What to watch: fourth-quarter US revenue growth, once the IMG ARENA acquisition reaches its one-year anniversary in November. Strong growth without the acquisition boost would show that prediction markets are adding new demand rather than just shifting bettors away from traditional sportsbooks.
Staff Cuts Offset the Cost of New Rights
When Sportradar took over the IMG ARENA portfolio of sports rights late last year, it added heavy license fees that threatened to weigh on profitability. To protect its margins, the data provider began cutting staff and automating operations earlier this year.
Those cuts showed up in the third quarter. Staff costs, excluding one-offs such as €4.5 million in severance and share-based pay, fell 4.9% from a year ago to €68.3 million. As a share of revenue, those adjusted staff expenses dropped by 5.7 percentage points to 18.8%, nearly matching the 6.0 percentage point jump in sport rights expenses.
What to watch: fourth-quarter severance charges and staff expenses. If severance charges fall from the €16.3 million spent over the first nine months while staff costs stay below €70 million, the savings will drop straight into net profit next year.
🐻 Bear Case
Sport Rights Costs Outpaced Revenue Growth
Koerl said the business is set to "deliver durable growth and expanding profitability" as it sells its sports rights across more platforms. The third-quarter cost table shows the opposite effect on margins right now.
- Sport rights expenses: €111.7 million, up 54% from a year ago and rising from 24.8% of revenue to 30.8%
- Adjusted EBITDA margin (operating profit before depreciation, taxes and one-offs, but after sport rights costs): 28.2%, down 0.8 percentage points
- Implied fourth-quarter revenue growth: 18.9% by our math, down from 24.1% in the third quarter
- Implied fourth-quarter Adjusted EBITDA growth: 33.7% by our math, requiring a 27.3% margin vs 24.2% a year ago
Because the company pays fixed multi-year fees to leagues like the NBA and Euroleague Basketball, rights costs do not drop when revenue slows. In November, the business laps the November 2025 closing of IMG ARENA. Hitting the full-year profit target requires fourth-quarter margins to jump by 3.0 percentage points just as top-line growth slows down.
What to watch: sport rights expenses as a share of revenue in the fourth quarter. A reading above 31% would make it hard to reach the full-year profit plan or the company's longer-term margin goals.
Buybacks Cut Cash in Half Before the Atrium Sale
Management has leaned heavily into its $1 billion share buyback plan this year, arguing that its debt-free balance sheet allows large capital returns. Supporters view the pace of purchases as a sign of confidence that shrinks the share count.
During the third quarter, the group spent $157 million on buybacks, completing its $250 million accelerated open-market programme and bringing 2026 purchases to $408 million through October. That reduced diluted Class A shares by 9.6% from a year ago, lifting diluted profit per share by 29% on a 20% rise in net profit. However, the spending spent all of the nine-month free cash flow of €177 million and nearly halved the cash balance from €365 million at year-end to €190 million.
What to watch: fourth-quarter buyback spending once the $170 million Atrium Sports sale closes. If management slows purchases to rebuild its cash buffer, the per-share profit boost will fade in 2027.
Currency Swings and Betting Outcomes Hurt Profit
Two outside forces continued to weigh on results. First, Managed Betting Services — the unit that runs trading and risk management for sportsbooks — saw revenue fall 3% from a year ago to €54.7 million. Customers placed more bets through the system, but the company said "lower trading margins due to unfavorable sport outcomes" wiped out the volume gain when favourites won.
Second, because Sportradar reports in euros but pays for major American league rights in US dollars, exchange-rate moves create accounting swings. The third quarter included a €6.4 million foreign currency loss, bringing nine-month currency losses to €24.8 million against an €81.7 million gain a year earlier.
What to watch: fourth-quarter Managed Betting Services revenue during the peak NFL and European soccer calendar. A second straight decline would show that lower bookmaker win margins are offsetting betting volume growth.
Risks this quarter didn't answer
The earnings release gave no update on five standing concerns that require conference call commentary or future filings to test.
- Customer net retention rate: missing from the release for a second quarter after sliding from 127% at the end of 2024 to 108% (excluding IMG ARENA) in the first quarter.
- NBA sign-off for Kalshi: the release noted expanded Polymarket and broker deals, but did not say whether the NBA approved the Kalshi data feed needed for fourth-quarter targets.
- Prediction market lawsuits: state challenges to sports prediction contracts remain listed in the risk disclosures, where injunctions could curb the new revenue stream.
- Regulatory and compliance reviews: no new detail on whether regulators or leagues followed up on April allegations regarding data supply in non-compliant markets.
- 2027 league renewals and labour talks: upcoming UEFA soccer rights bidding in early 2027 and potential MLB baseball labour disputes remain ahead.
👓 Other Themes
Atrium Sports Sale Brings In $170 Million
On October 7, the company announced an "agreement to divest Atrium Sports, the Coaching & Scouting business of Synergy Sports, to Teamworks Innovations for US$170 million". Atrium sits inside the Sports Performance unit, where third-quarter revenue dropped 8% from a year ago to €10.3 million. Shedding the shrinking coaching unit brings in cash and trims low-growth revenue; management will update its full-year outlook if needed once the deal closes in the fourth quarter.
💲 Other KPIs
Total contract liabilities — cash customers have paid upfront for data and services not yet delivered — rose 51.0% from €65.8 million a year ago, and climbed 25.0% from €79.6 million in the second quarter. Current contract liabilities nearly doubled since December to €67.0 million, pointing to higher upfront billing from new rights and partnerships.
Free cash flow — operating cash after sport rights payments, equipment and leases — grew 12.2% from a year ago in the third quarter, slower than the 22.8% pace in the first half. Operating cash flow jumped 36.7% to €157 million, but higher payments for capitalised sport rights licenses absorbed €81 million in the quarter.
🔮 Guidance
Unchanged. Sportradar kept the full-year target it lowered three months ago, pointing to 18.3% reported growth at the middle of the range. By our math, that leaves €438.7 million for the fourth quarter, or 18.9% growth from a year ago — a step down from 24.1% in the third quarter as the IMG ARENA acquisition reaches its one-year anniversary. The plan excludes the upcoming Atrium Sports sale.
Unchanged. The plan still calls for 22.6% reported profit growth at the middle of the range after last quarter's €31 million cut. By our math, hitting the middle of the range requires €119.5 million in the fourth quarter, up 33.7% from a year ago — faster than the 20.8% growth delivered in the third quarter.
Unchanged. After nine months, the margin is 22.5%, identical to the same period in 2025. To lift the full-year margin by 0.7 to 1.0 percentage points over last year's 23.0%, our math shows the fourth-quarter margin must reach 27.3%, up 3.0 percentage points from 24.2% in the fourth quarter of 2025.
Unchanged. The company still expects the share of Adjusted EBITDA that turns into free cash flow (excluding non-routine legal costs) to beat last year's 56%. At 72% through the first nine months — matching the 72% rate at this point in 2025 — the full-year floor remains well within reach even with fourth-quarter rights payments.
❓ Key Questions
What was customer net retention excluding IMG ARENA?
Sportradar did not publish its customer net retention rate in the release for a second straight quarter. After the metric slid from 127% in late 2024 to 108% in the first quarter, investors need the number to see what underlying growth looks like once IMG ARENA laps.
Did the NBA approve the Kalshi prediction market data feed?
Last quarter, management said fourth-quarter targets depended heavily on NBA approval for its data contract with prediction exchange Kalshi. The third-quarter release highlighted Polymarket and broker deals but did not mention Kalshi or the NBA.
How much revenue and profit will the Atrium Sports sale remove?
Sportradar agreed to sell Atrium Sports for $170 million, with closing expected in the fourth quarter. Management has not disclosed how much of the €40 million annual Sports Performance unit goes with Atrium or whether the sale helps margins.
Will buybacks slow down after cash fell to €190 million?
Share repurchases reached $408 million so far in 2026, cutting cash from €365 million at year-end to €190 million. With $481 million still authorised and $170 million coming from the Atrium sale, management has not stated its target cash floor.