Genius Sports (GENI) Q1 2026 Earnings Transcript

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DATE

Thursday, May 7, 2026 at 8:00 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Mark Locke
• Chief Financial Officer — Bryan Castellani

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TAKEAWAYS

• Group Revenue Growth -- 31% reflecting contributions from both Betting and Media segments.
• Adjusted EBITDA Growth -- 21% demonstrating consistent earnings improvement.
• Betting Segment Revenue -- Up 33%, attributed to consistent drivers such as selling new content, winning new customers, and upselling in renewals.
• Net Revenue Retention -- Remained in the 120%-130% range across Sportsbook customers.
• Media Segment Revenue -- Increased by 22% with the Moment Engine launched and integrated across approximately 90% of leading SSPs and DSPs.
• Legend Acquisition Closing -- Completed last week and actively integrating, bringing owned environments with 118 million unique users, of whom over two-thirds are regular returnees.
• Legend’s Impact on Margins -- Expected group adjusted EBITDA margin lifted from 23% to 28%, accelerating the timing of the long-term target by two years.
• Geographic Revenue Performance -- Delivered over 25% growth across Europe, Americas, and Rest of World.
• Legend Financing -- $825 million Term Loan A funded at SOFR plus 350 basis points, sized $25 million below original structure, improving cost of capital and liquidity.
• Q2 2026 Guidance -- Group revenue projected at $185 million and adjusted EBITDA at $45 million, with one month pre- and two months post-Legend consolidation.
• Full Year 2026 Guidance -- Group revenue expected at $990 million to $1.01 billion and adjusted EBITDA at $270 million to $280 million, consistent with prior annualized forecasts.
• 2026 Second-Half Cash Flow -- Combined business anticipated to generate about $100 million in total cash flow, equating to 50%-55% conversion of $200 million adjusted EBITDA.
• AI and Automation -- Agentic AI reduced feature development time by over 50%; GeniusIQ targeted to automate the entire data rights portfolio by end of next year.
• Prediction Markets Adoption -- Several high-profile market makers onboarded during the quarter using low-latency data feeds, with flexible deal terms reflecting evolving market economics.
• Advertiser Partnerships Traction -- Picked up nearly 70 new advertisers at NewFront; Samsung increased spend by 220% from its initial test campaign.

SUMMARY

The integration of Legend has accelerated margin expansion for Genius Sports Limited (NYSE:GENI), enabling a two-year pull-forward of long-term EBITDA margin targets while providing immediate accretion through improved cost structure and liquidity. Strategic advances in AI and automation, including GeniusIQ and Agentic AI, are delivering operational efficiencies and positioning the company as a core infrastructure provider for the sports ecosystem. The product-driven momentum in Media, including wide deployment of the Moment Engine and cross-platform integrations, is setting the stage for ongoing high-margin revenue growth as the company scales its advertising solutions. Progress toward realizing identified revenue synergies, particularly via prediction markets, cross-sell, and data-driven media, remains early but is expected to provide substantial incremental growth not presently reflected in full-year forecasts. Risk-controlled, contract-based models and avoidance of exposure to unregulated markets reinforce revenue predictability as Genius expands its global footprint.

• The CFO stated, "Today's guidance does not yet include the 4 revenue synergies we identified at the time of the transaction, and these are where we see significant upside potential."
• Integration with Legend allows Genius to directly embed its products across Legend's user properties, with initial implementations underway.
• Management described a clear focus on "disciplined deleveraging," with loan sizing and liquidity decisions intentionally structured to support robust free cash flow.
• Company highlighted that over half of total revenue is generated outside the United States, indicating established global diversification.
• Automation of data collection is expected to span Genius’s full rights portfolio by next year, contributing to continued margin expansion.
• Improved product offerings such as BetVision in the Italian (Serie A) market and global football are enabling rights wins outside the U.S. core.
• Genius's agreements with official sports leagues, including the NFL through Super Bowl 2030, ensure contracted revenue visibility and reinforce its position in regulated markets.

INDUSTRY GLOSSARY

• SSP: Supply-side platform, a technology platform enabling digital publishers to manage, sell, and optimize advertising inventory programmatically.
• DSP: Demand-side platform, software that allows advertisers to buy digital advertising inventory, typically using programmatic technology and audience targeting.
• Moment Engine: Genius Sports’ proprietary media platform that predicts fan engagement peaks and enables real-time, intent-based advertising placement.
• BetVision: Genius Sports’ integrated streaming and betting product enhancing in-game engagement for sports betting operators and fans.
• GeniusIQ: The company's integrated operating system automating data capture and distribution across the sports ecosystem, used for officiating, analytics, betting, and media.
• Agentic AI: Genius’s in-house artificial intelligence tool for accelerating development cycles and automating operational processes.
• CFCC/CFTC: Refers to U.S. Commodity Futures Trading Commission, which is signaling regulatory movement toward official data in prediction markets.
• FANHub:ID graph: Genius’s proprietary audience identity graph combining user profiles from across its platforms for targeted media and advertiser engagement.

Full Conference Call Transcript

Mark Locke: Good morning, everyone, and thank you for joining. Before I get into the results, a quick word on context. We're really pleased to share that we've successfully closed the Legend acquisition last week. Integration is well underway, and we're excited to share our progress into the quarters ahead. Q1 was another strong quarter, reinforcing the simple point that this is a reliable compounding business model and that we are executing on plan. We delivered group revenue growth of 31% and adjusted EBITDA growth of 21% with meaningful contributions from both Betting and Media. Importantly, Betting grew 33% this quarter, and that consistency is structural, and I want to spend a few minutes on why.

Net revenue retention remains in the 120% to 130% range across our Sportsbook customers year after year. We partner with circa 500 licensed Sportsbook brands across regulated markets globally, and over half our revenue is generated outside of the United States. Our consistent growth comes from the same drivers that we have always communicated, selling additional content and products to sportsbooks, winning new customers globally, sharing in market growth and increasing the value of our partnerships as they come up for renewal. Each renewal is a pricing event, more content, more products, more geographies. And that's what compounds into the growth that you see year after year. What sets us apart is how deliberately this business is built.

That repeated performance across a diverse set of customers, products and regulated geographies is fundamental to how this business compounds. Further, we are selective by design, working only with licensed operators in regulated markets. It is what makes our business model predictable and sustainable. That predictability is reinforced by our contracts, which are structured to protect against the downside. Volatility in handle or hold does not translate to earnings volatility for Genius. We have proven this through periods of industry-wide pressure, and this quarter was no different. While discussing our Betting business, I want to spend a moment on prediction markets because, as we've mentioned before, this is a meaningful new ecosystem for Genius Sports. The regulatory framework is evolving.

Leads are establishing agreements with the CFCC and prediction market platforms and well-funded operators are deploying significant new influxes of capital at scale. We are a beneficiary of this. Where we are different is that our position here is structural. We provide the data and the infrastructure that enables prediction market operators and the other stakeholders in the ecosystem to function at scale. We expect this to translate into both incremental data revenue and advertising demand as those operators ramp customer acquisition. The way to think about this is simple. We are applying the same proven model in the U.S. online sports betting market to a new category.

As a concrete example of revenue, during the quarter, we onboarded several high-profile market makers using our low-latency data feeds to help them participate in prediction markets. That is the pattern. Our infrastructure becomes the foundation for new products as they emerge. And as the industry continues to evolve, we see a clear opportunity to execute that same proven strategy and effectively expand our addressable market. We are at the very early stages of that journey today and are excited about our pipeline. That is the Betting story. Now media. Media grew 22% in this quarter.

Most excitingly for Genius was the launch of our Moment Engine that has already gained significant traction across the advertising industry and become the new standard. The Moment Engine identifies when fan engagement is likely to peak, not just from the scoreboard, but from momentum shifts, comebacks and the kind of high-impact moments where customer attention is most valuable to advertisers. GeniusIQ is what makes that possible. And importantly, it matches that moment to high-value audiences and activates them instantly. It's not just about identifying what is happening in the game.

It's about understanding who it matters to and how they are likely to respond because not every fan reacts to the same moment in the game in the same way. That signal, the connection between the moment, the fan and the response is what advertisers pay for. What differentiates us is the combination of data and identity. Our FANHub:ID graph, 250 million consumers, combined with Legends intent signals drive better targeting and higher yields. The result is enabling advertisers to target high-intent audiences in real time, which drives higher yields and increased spend over time that translates directly into high-margin media revenue.

To accelerate the growth of this opportunity, we have now integrated the Moment Engine with leaders, representing approximately 90% of the programmatic market, agencies, broadcasters and the major SSPs and DSPs. These integrations lets us connect into existing advertising workflows and budgets with minimal friction, supporting our ability to scale efficiently. The product was already live during the tentpole events like the Super Bowl and March Madness with NBA finals and FIFA World Cup still ahead. What we are executing here is a structural shift in how digital businesses create value. The economy has moved from selling attention to capturing intent. Search engines did it. Retail media did it at the point of purchase.

In sports, we are enabling that shift to happen in real time, and the Moment Engine is built precisely for it. At our NewFront event in New York a few weeks ago, we partnered with nearly 70 new advertisers, clear evidence of growing demand for outcome-driven sports advertising. That builds on existing partnerships that we have with Publicis, WPP, DoorDash, Venmo and Samsung. Samsung, in particular, tested our self-serve CTV product early and quickly graded Genius as a Tier 1 partner within its internal evaluation framework, increasing spend by 220% from their test campaign to their most recent booking, a remarkable signal given Samsung's scale and selectivity in choosing advertising technology partners.

We expect more of these graduations as advertisers complete their first full season with the product. As adoption continues to grow, we expect the Moment Engine to be a meaningful driver of high-margin media revenue over time. The core businesses in Betting and Media are on a strong footing. And now I want to spend a few minutes on the 3 areas that are accelerating our margin expansion and profitability. Legend, GeniusIQ and AI. They're all connected and all running on the same platform. First, Legend.

As you know, Legend adds the intent layer of the system that we have been building for 2 decades, owned environments where 118 million unique users actively engage with sport and iGaming with more than 2/3 returning regularly. Combined with the official data and infrastructure that Genius already provides, the platform now connects context, engagement and action all in one place. As AI commoditizes information retrieval, owned environments are where users come back to engage. They become more defensible, not less. Legend also extends the Moment Engine into the global iGaming market, which is expected to grow at near 20% CAGR over the next 3 years.

On customer acquisition, as U.S. markets mature, sophisticated operators are shifting spend from the blanket promotional offers towards targeted high-intent performance media, channels where Legend is a proven leader. We're already seeing clear evidence of this shift. For example, Legend acquired customers delivered 60% higher yield for operators after 1 year. The category is moving towards Legend's model. Integration is underway, and we'll share more on synergy execution next quarter. Second, GeniusIQ is replacing legacy systems across the sports league landscape.

As we outlined at our Investor Day, GeniusIQ is the operating system of modern sport, one platform that captures live game action, understands fans, distributes data and powers every touch point where sports is consumed, officiating, coaching, betting, fan engagement, advertising, all running on the same system. Legacy manual data capture, where humans key in events from television feeds is obsolete. Leagues are transitioning towards automated AI-driven solutions, and we are winning that transition. Our recent expansion with Liga MX is one example, a single relationship covering officiating support, performance analytics for clubs, betting data and fan engagement, all powered by GeniusIQ.

We see a meaningful opportunity to take market share and drive incremental revenue with limited additional costs as more leagues make this transition. This is the strategic shift that we anticipated and that we built for, and we are now seeing the return on that investment in real time. Third, AI lowers our cost base and increases speed across the business. GeniusIQ automates data collection in venues where it is deployed, delivering faster, more accurate data with reduced operational overhead. By the end of next year, we expect that automation to span our entire data rights portfolio. That is a meaningful margin lever as we scale.

Internally, Agentic AI has cut feature development time by more than 50%, and we expect these gains to compound. We're extending the same capabilities into partner workflows, embedding our technology more deeply into customers' operations, which both creates stickiness and creates additional commercial opportunity. We have also developed automated antipiracy solutions to protect our most valuable asset, the data itself. AI is not just enabling innovation in our products, it is structurally improving our margin profile and reinforcing the defensibility of our business. The true line is this: one platform; three, accelerants, expanding operating leverage. That is what gives us confidence in sustained margin expansion from here. Bryan will take you through the financials, but I'll leave you with this.

Q1 extends a consistent pattern of execution on a durable model. We are moving from a data provider to the operating system and monetization layer of global sport. We've built a competitive position and margin profile that few others in the sports ecosystem can replicate. Consider this against the backdrop of an industry that's being reshaped by AI. Every wave of AI progress increases the value of 2 things: data that can't be replicated and destinations audiences actively choose. We own both, which puts us in a rare position. AI doesn't threaten our core. It compounds it.

The opportunity is to use AI to make our data more useful, our destinations more essential and the gap between us and everyone else even wider. I want to close with a direct comment. We understand and appreciate but it's early days with respect to Legend. As I wrote to shareholders in February, the gap between how we see this business and how some of the market currently sees it is where the asymmetric returns live. The way that we close that gap is by delivering quarter after quarter with the discipline that has defined this business for 2 decades. These results begin that process and every conversation between today and our next call will be about exactly that.

And with that, I'll turn the call over to Bryan.

Bryan Castellani: Thanks, Mark. Three things I want to land today. Q1 was another quarter of well-balanced, consistent growth. The Legend financing priced well with strong lender support and the combined company takes our 2026 EBITDA margin from 23% to 28%, pulling our long-term target forward by 2 years. Starting with Q1, we delivered well-balanced revenue growth across both segments. Betting was up 33% and Media up 22%, translating to group revenue growth of 31% and adjusted EBITDA growth of 21%. Geographic balance was equally strong with over 25% revenue growth across Europe, the Americas and Rest of World. Two housekeeping notes on the quarter. First, as outlined previously, we now consolidate our Sports Technology and Services business into Betting and Media.

This aligns with how we manage the business and reflects where expected growth and profitability will come from. Going forward, we will report on those 2 segments only. Second, on cash, we historically see outflows in the first half and inflows in the second half, netting positive for the full year. We expect that pattern to repeat in 2026. Now on Legend. The financing tells you what outside capital thinks of this business. Concurrent with closing last week, we funded an $825 million Term Loan A at SOFR plus 350 basis points, better terms than where credit markets sat when we originally signed and a lower cost of capital than we initially expected.

In a more selective credit environment, lender diligence reinforced the predictability of our cash flows, our low leverage profile and the durability of the model. We also elected to size the debt $25 million below the original structure, reflecting our confidence in free cash flow generation and our commitment to disciplined deleveraging. This reduces upfront and ongoing interest, fees and amortization while preserving ample liquidity which brings me to guidance, now reflecting the combined company beginning May 1. For Q2, we expect 1 month of stand-alone Genius and 2 months of combined group financials, delivering group revenue of approximately $185 million and group adjusted EBITDA of $45 million.

For full year 2026, we expect group revenue of between $990 million and $1.01 billion and adjusted EBITDA of between $270 million and $280 million, in line with the 2026 annualized estimates we provided in February. The headline number. This raises our 2026 adjusted EBITDA margin expectation from 23% to 28%. The acquisition is immediately margin accretive and accelerates our path to our previously stated long-term revenue and margin targets by 2 years. On cash flow, 2 points. First, this year Q2 will mark the low point, consistent with the seasonality of prior years, while also having one-off acquisition expenses.

In the second half, we expect the combined business to generate approximately $100 million of total cash flow, including all interest expenses and debt repayment. This equates to roughly 50% to 55% conversion of the approximately $200 million of adjusted EBITDA we expect in the period. Second, the trajectory. As we move into 2027, free cash flow conversion increases towards our previously stated 2028 target of at least 60% on an unlevered basis. And 2027 is also the year we transitioned to positive GAAP net income on a sustained basis. One last point, and it's the most important forward-looking one.

Today's guidance does not yet include the 4 revenue synergies we identified at the time of the transaction, and these are where we see significant upside potential. To recap them briefly, they are: first, customer cross-sell uniting Genius' official data with Legend's high-intent acquisition funnel; second, monetization of the combined audience asset across the advertising ecosystem; third, scaling Legend's technology platform across our 400-plus league and team partners; and fourth, distributing Genius data and products through Legend's channels. On that fourth synergy, work is already underway. Over the coming weeks, users on Legend's properties will begin seeing Genius products integrated directly into their experience. This will be the first visible signal of integration progress.

In 2026, the majority of Legend's value comes from consolidation, margin uplift and cross-sell of Legend inventory into existing betting partners. Deeper data-driven media synergies build as we move into 2027 and beyond. One specific synergy worth calling out separately, prediction markets. As Mark covered, the ecosystem requires both official data and high-value audiences, capabilities we uniquely combine. Together, Genius and Legend create the only platform in our industry that delivers both at scale. We see this as one of the most attractive incremental revenue opportunities ahead and only the very early stages of this opportunity are reflected in today's guidance. To close, Q1 extended the track record, the financing validated the model.

Legend pulls our long-term targets forward by 2 years. The combined business is set up to deliver sustained revenue growth, margin expansion and cash flow and meaningful long-term value for shareholders. With that, we'll open the line for questions.

Operator: [Operator Instructions] Our first question comes from the line of Ryan Sigdahl from Craig-Hallum Capital Group.

Ryan Sigdahl: Nice to see the strong Q1 results. I want to start, Bryan, with guidance just because you ended on it. Are you able to break out the legacy Genius guide relative to your new guide? And then what's included for Legend? I tried to do some reconciliation relative to the stand-alone expectations you had put out there. It appears like maybe a little lower on the revenue and the same EBITDA, but hopefully, hoping you can help me with that.

Bryan Castellani: Ryan, thanks. On guidance, this is all in line with the earlier guidance we gave in February. And in February, we started with the Genius stand-alone guidance that had 22% revenue growth and 36% EBITDA growth, which is really strong, and we're on track to achieve that. With Legend closed just last week, we now present it as a combined business. So the guidance you see is effective May 1 on the combination. And you can see it's immediately accretive to margin and cash flow, potential synergies to drive upside. And so we feel good about that guidance. And again, I just want to stress it's all in line with that earlier guidance in February.

Ryan Sigdahl: Helpful. NFL, so there's -- it's reported the NFL does not have an official Sportsbook. They're in those negotiations, previously DraftKings, FanDuel, Caesars that expired at the end of March. Curious kind of what your view is of that. I know it's a long time until the start of the season, but just how that relates to you guys and what you expect to happen there?

Mark Locke: Ryan, thanks for the question. Yes, I mean, look, it is a long time to start the season, right? And I mean, this is nothing we haven't really seen before. I don't want to comment for the NFL or how those negotiations are going. But from our point of view, we've got very strong visibility over our future revenues and our partnerships and our relationship with the NFL, just to remind everybody, is locked in until Super Bowl 2030.

Operator: Our next question comes from the line of Clark Lampen from BTIG.

William Lampen: Thanks for really detailed thoughts around sort of Legend and the opportunity sort of moving forward. Maybe to drill down on that at a slightly more micro level. I wanted to see if you guys could talk about some of the ongoing work and the Publicis and sort of Moments integrations that you guys talked about in the March time frame. Could you give us a feel for early commercial traction, what you're seeing with the integrations? Are those driving incremental revenue now? Or are we still in the sort of activation and testing phase? And then a clarification on guidance. I think, Bryan, you just said immediately accretive.

There are potential synergies, but guidance should be considered basically in line. It sounds like you guys have a very nicely growing demand backlog from core and prediction customers. What would you want to see before maybe starting to underwrite or sort of embed those potential synergies that you just talked about?

Mark Locke: Clark, thanks for the question. Look, I'll let Bryan pick up the second part of it. But I mean, suffice to say, I think we said a few times that the upside isn't priced -- sorry, isn't in any of the guide. To answer your question sort of micro details, I think you called them. Look, we've got a few main things we're going. On the Legend integration, things are going really, really well.

From an operational point of view, we've got a 60-person commercial off-site together, I think, next week or the week after, which is going to bring the businesses together, and we're going to address a lot of the inbounds that we're getting already, which is a really, really good sign. So the combined offering is going down very well. From a product point of view, we're integrating BetVision into Legend at the moment, which gives us not only additional reach, but more inventory, which we should be able to immediately drive value from through our advertising partnerships. On the Moment Engine, you saw the comments or heard the comments in the prerecorded script.

We think we picked up 70 new customers and 90% of the SSP, DSP market, and that's delivering immediate revenue. So we're extremely excited about the opportunities. It's going exactly to plan, and we feel very confident about the growth and the revenue numbers that we put out into the market previously. But I'll let Bryan pick up the second part of the question.

Bryan Castellani: I think that second part, just on the what we would need to see to layer in those synergies. And we've always been consistent that the acquisition was -- we guided with what was in front of us. And as those synergies come to light, we will start to layer them in. We've said the nearest ones are the cross-sell opportunities. And as Mark said, the teams have started to get together. There's interest on both sets of customers and proposals going out where we can now leverage the combined opportunity. So as those things start to layer in, we will update you as we go.

Operator: Our next question comes from the line of Jordan Bender from Citizens JMP.

Jordan Bender: Mark, you touched on onboarding the market makers to your platform. Broadly, can you maybe just help us think through the economics of what selling that data might look like? I know you're not going to be able to kind of give us contract by contract, but just kind of help us size the overall opportunity there for you guys? And maybe the second part of that is you have the infrastructure in place, would you guys ever consider market making yourselves?

Mark Locke: Yes, it's a good question, Jordan. I mean these are fairly early days. Whilst we've got a great deal of experience of doing this in Europe, I think we've mentioned before that we've worked with market makers there for a long time on the exchanges. And I think from a technical point of view, we don't really see much difference over here, saying all about the economics and the way it's going to wash out in the U.S. is clearly something that we're keeping an eye on and watching the evolution of. As a result of that, the deals that we're running are short-term deals. We have various different economic structures.

But fundamentally, as time goes on, we'll evolve those deals as we get more clarity, frankly, on what the best economic deal is, but that's going to be on a case-by-case basis depending on the quality and the type of the market maker that we're working with. We're leaving ourselves a lot of flexibility.

Jordan Bender: Understood. And then just on the follow-up, Bryan, I think I caught that you said $100 million of free cash flow in the second half of the year. If I look at the 1Q number, it kind of implies you have to not lose that much in the second quarter. Is that to say that you might actually be free cash flow negative for the entire year? Did I catch that correctly?

Bryan Castellani: Sorry, no. So let me just give you a little bit of a walk on the cash flow. So Q1 seasonal pattern, that is part of our history and just the way timing vis-a-vis -- timing of rights payments versus revenue, right? We monetize our rights over 12 months, but the rights payments time into the season. Q2 will have a number of onetime impacts just given the transaction. So we will see the low point in Q2, probably around $140 million to $150 million.

And then that build back that $100 million and starting from really the second half of the year, you really start to get a clean read on the earnings and cash flow power of the combined business. And so that's 50% to 55% total conversion just so that we were cleaner on where you might model that. And so that reflects basically the back half of the year earning about $200 million of EBITDA that may be more Q4 than Q3, again, in line with the pattern of history here. But hopefully, that answers your question as to how to think about the cash flow in that.

Operator: Our next question comes from the line of Barry Jonas from Truist Securities.

Barry Jonas: Maybe just talk a little bit more about the prediction opportunity right now. I don't believe the NFL has reached an agreement at this point. So just curious what the opportunity is and then what you're sort of waiting on to proceed once you get more buy-in from the NFL or any other leagues.

Mark Locke: Yes. It's a good question and clearly a hot topic at the moment. So I think it's probably best to break it into 3 buckets because already the prediction markets are driving a lot of value for us. And the first one, we touched upon a minute ago with the market makers, we're generating good revenues there. Early days, but we're seeing real positive opportunities there. You've got the second part of the -- or the second bucket, if you like, I'm sure you've all watched the valuations and some of the raises that have been going on at the moment, which, frankly, is going to be for marketing for product.

And we see a lot of that raise coming through to Genius and Legends as part of customer acquisition and the marketing. So there's a significant opportunity there, which we are already starting to capitalize on. And then finally, on the data side, look, we've got to have a very close eye on the regulators and the regulatory environment is something that we are obviously very sensitive to and our partners are very sensitive to. But you're seeing positive moves from the CFTC towards official data. A lot of our partners outside of the NFL are showing strong interest in engaging.

So we expect that those sorts of deals will come in on a longer -- sorry, on a short-term basis. On a medium-term basis, the NFL and the U.S. sports leagues, I'm sure, are considering their positions. But I think it's fair to say that for the prediction market to have a long and rosy future, they're going to want to work very closely with those leagues and with the CFTC. So as a result of that, we expect in the medium term some progress on that front.

Barry Jonas: That's helpful. Then just for Mike, can you talk about allocation specifically customer purchases? I think the company volume in the quarter fell off.

Mark Locke: So we will prioritize our capital in the highest ROI opportunity. We're closing the trends and finance favorable focus on management. We always focus on scheme and to a paying down that as well. We get done because we've set our strap and the quick lever, the quick have optionality to do those other types of things you're asking about. Our focus right now is the delever.

Operator: Our next question comes from the line of Chad Beynon from Macquarie.

Chad Beynon: Wondering if you could expand a little bit just in terms of engagement in Syria as that season comes to a close. And this was a big integration year with your new rights contract in BetVision. So any additional color just in terms of what you've seen from that contract in this first year?

Mark Locke: Yes. Thanks for the question. Look, it's super interesting. I mean the -- Italy is the biggest betting market in Europe. It's often missed by people. Our relationship with them is very strong. We're very happy with the technology integration that we've done and the distribution of the products. And we feel really good about the future of that relationship.

Chad Beynon: Okay. Great. And then as we think about the NFL ad inventory opportunities and kind of tying that back with the event that you just had with NewFront, when will we start to see you kind of fill the bucket in terms of that inventory? Is that something that's closer into the season? Or is that a process that's going on right now? And any commentary there would be helpful.

Mark Locke: Yes, sure. Look, we're already outselling the NFL inventory. And clearly, with the addition of the Moment Engine and the improvement in ROI that our advertisers see a result of that, we are very confident that's going to generate a very good result for us this year.

Operator: Our next question comes from the line of Eric Handler from ROTH Capital.

Eric Handler: I wonder in terms of your Media business, is -- would you be willing to sort of quantify either from a volume or dollar basis, how interest is shaping up for the NBA finals this year? And as well, when you look at the incremental opportunity with the World Cup, is there any color you can give around that?

Mark Locke: Yes. So this is an interesting moment for us, excuse the pun, with our Moment Engine. We -- the great thing about it and the fact that we've distributed it so widely and it's being picked up by so many clients is that we're part of the workflow of those clients. And so when you combine that with the fact that we have a rolling set of events throughout the year, you mentioned a couple, and obviously, the World Cup is a big one. The combination of that means that this product will automatically be used by our clients as part of their campaign management.

So effectively, we are now running our product sets on a 24/7, 365 basis based on the events, based on what's going on in the match and generating revenue from every campaign.

Eric Handler: Great. And I wonder if there's any sort of updates or color or data you can give for BetVision in the quarter.

Mark Locke: Yes. Look, BetVision, we're super happy with it. It's going really nicely at the moment. We've seen BetVision's growth in global football actually now with the with the off-season, but now pass some of the NFL. So there's a huge amount of opportunity that we're seeing outside of the core U.S. market there. We're really happy with the output and the results that we're getting are really strong. And clearly, we're winning result -- sorry, we're winning rights away from our competition, and that product is really helping us do that. So we feel very, very strongly about it, and we're super happy with the ROI that we're getting on that.

Operator: Our next question comes from the line of Bernie McTernan from Needham & Company.

Bernard McTernan: Maybe to start, Mark, I know it's early days, but is official data holding that same demarcation that had in online sports betting meeting? Are you and your competitors staying in your own lanes in terms of selling data to prediction market stakeholders that only you have official data for? Or is it more of the Wild West out there at this moment in time?

Mark Locke: Yes. I mean it's certainly not the Wild West. It's much more -- the market has evolved. It's much more rational than it used to be, and I think you're seeing that in the results. We are pretty clear, and I think our competitors are pretty clear about what rights we hold, and we're engaging with not only the rights holders, but the prediction markets on that basis.

I think the most important thing that people need to think about in terms of prediction markets is as they evolve and mature and become -- move towards sort of stronger regulatory framework, they're going to need to fall much more in line with the way that, I guess, the more traditional sports betting market work. So they're going to look to mirror those -- that type of framework, which provides a significant opportunity for us and also other players in the market who have access and the control over that data.

And again, if you look at the -- and I think I mentioned this before, you look at what the CFCC has said about the need to move towards official data and the fact that the leagues are starting to align, you're just going to see more adoption on that basis. Again, we're very well placed for that.

Bernard McTernan: Got it. And then just a clarification. Bryan, I believe you mentioned the full year kind of legacy Genius guide was unchanged, but there was a pretty substantial beat in the first quarter. So was this just a pull forward or just maybe some confusion that we had on seasonality?

Bryan Castellani: No confusion. We're always mindful in managing to the full year guide, and we're consistent with that. And so again, here with Q2 just closing the transaction, we want to come out of the gate here well. And so really no change, just managing the full year rather than quarter-to-quarter.

Operator: Our next question comes from the line of Jed Kelly from Oppenheimer.

Jed Kelly: I think when you acquired Legend, you were kind of calling for like 20% growth for the full year. It seems like 2 of the largest sports books are increasing the amount they're willing to invest in prediction markets. Kalshi has gotten funding. So it seems like we're ramping up for what one would call maybe a '22, '23 advertising spend that you saw in OSB in prediction markets. So just how should we think about the back half advertising ramp for Legend?

Mark Locke: Thanks for that. Look, obviously, we love that comparison, and we agree with it as well. We're seeing a lot of the sort of excitement that we saw in those early days. The back half is going to be seasonal. There's still going to be rational spenders and even though they raised a lot of money and they're being aggressive with their acquisition. However, it's going to be based around sports events, and we would think it's likely to follow that calendar, albeit it's a big opportunity for us. And as I've said for a while, we're extremely well placed, even more so now with Legend and the distribution network that they have.

Jed Kelly: Got it. And then just as a follow-up, just with Legends, I guess, just in the relationship with the LLMs, when you go do and you kind of go into some of these LLMs, they are scraping covers and taking the sources. Is there any way to protect that data or protect what they have or maybe integrate with the LLMs? Can you just talk about that relationship in terms of preserving some of the uniqueness around the Legends portfolios?

Mark Locke: Yes. Look, LLMs are a big opportunity for us through Legend. We -- I think I said in my prepared remarks, we -- what LLMs are good is aggregating information. But really, this is all about destination sites, which Legend has and the new app that's just been soft launched as well. So we feel from an AI point of view and an LLM point of view, we're a net winner. And we're seeing record audience coming through the LLMs to Legend at the moment, which is obviously translating to cash.

Operator: Our next question comes from the line of Mike Hickey from StoneX.

Michael Hickey: Mark, Bryan, congrats guys on a great 1Q and the closing of your deal here. Just 2 questions from us, Mark. First one, renewals. Obviously, you've had a lot of success in renewals historically. Just curious sort of how you're thinking about any upcoming operator renewals in the U.S. And what are the key levers you think in terms of driving incremental growth from these agreements?

Mark Locke: Yes. I mean, look, Mike, we're horizontally relaxed about this stuff. We've been doing it for years, and we expect this to carry on in the same way that we've seen it historically. We know what the levers are. We know what our value proposition is, and we've got an incredible track record of customer renewals and net revenue retention and growth. So we feel very confident and very relaxed about that.

Michael Hickey: Then just curious on the marketing opportunity you see, Mark, international. Obviously, the U.K. is a big area. I think in terms of Legend on gaming marketing, just the tax situation there has gotten nasty. Obviously, that's already baked into your guidance. Just wondering the impact you're seeing there. Do you think it will normalize or I guess, how it will trend through the year? And then just broadly speaking, when you look at the Moment Engine, which has been absolutely exceptional. And now Legend, when you look international, the biggest opportunities for growth that you guys see in the future?

Mark Locke: Yes. Thanks, Mike. Good question. Look, I mean, Legend obviously globally diversified, and that's a super important part. One of the things that might be quite interesting is to think about the U.S. If you remember, look at Flutter's results yesterday, 90% of the growth was iGaming versus 1% betting. Now clearly, Genius is outperforming on the betting front in a very significant way, as you've seen from the results this month and going forward. But I think the proportion of the money that's coming and growth that's coming from iGaming is very significant and a really good indicator for how well Legend is going to perform in the U.S. market.

Suffice to say, we're pretty excited about that, pretty excited about the new exposure that we've got to the iGaming market. That, combined with the growth that we're seeing in the advertising product means that we expect some really strong results from that space.

Operator: Our next question comes from the line of Trey Bowers from Wells Fargo.

Raymond Bowers: Just first, a couple of guidance questions. Any seasonality to call out around Legend? The incremental EBITDA for Q2 just relative to 2 months, seems a little lower in that quarter, if I just annualize the overall annualized EBITDA contribution of Legend. And then with that, any update to those long-term guide targets that you guys provided at the time of the acquisition? And then I have a quick follow-up.

Bryan Castellani: While Legend is less seasonal than Genius, and you guys know our back half, just given the sports calendar and the advertising calendar is significantly weighted to Q3, Q4. Legend is more even given that it is iGaming, but they still have their peak quarters in Q3, Q4. So there is some seasonality to it where the front half is notably less than the back half. And no change on the guide. We remain consistent. And I think you guys know me well enough that I keep saying we're consistent.

Raymond Bowers: And then just on cash flow, just if we could put a finer point on this. If Q1 burned around $80 million, Q2, you guys expect that to be $140 million to $150 million and then a rebound in the second half of $100 million, it's a negative cash flow year of north of $100 million. And then you mentioned kind of conversion showing up at the 50% plus rate in the second half. But if you're usually in a cash draw position in the first half, you should be well north of that in the second half.

So I think it would be super helpful just to kind of try to quantify what the one-timers related to the deal, et cetera, were in the first half, just to get a better sense of what kind of underlying cash flows look like.

Bryan Castellani: The underlying cash flow, again, Q3, Q4 is the clean read. It's about $100 million total. And that Q2, a reminder that given just the confidence in the business, we did reduce the loan balance in any transaction as any company would upon close, you do have the financing and the closing costs. So -- and as we end the year, we will have optionality on that cash balance in terms of delever or invest in the business. So again, the Q3, Q4 is the better read. And the guidance to '28, we expect '27 to build towards that 60% free cash flow conversion in '28. And so all of it remains consistent.

And as you get through the second half into '27, much cleaner and moving away from one-off transaction-related costs.

Operator: Our next question comes from the line of Jeff Stantial from Stifel.

Jeffrey Stantial: Maybe just starting off by following up on, I think, Bernie's question earlier. So the CFTC just wrapped up an engagement process for some potential rule-making. We know there's some understandably mixed responses regarding whether or not the CFTC should require the use of official data. I think it's specifically from the exchanges. Mark, can you just help us think about sort of sensitivity to the addressable customer mix and the TAM here for your data if the CFTC does require the usage of official data versus the scenario where it's really more a function of latency that determines official versus nonofficial data?

Mark Locke: Yes. I think the key thing is that quality of data that you need to have an official result set by. Otherwise, you've got the Wild West. And I think that's well understood. And you're only going to get the official result from the official holder of data, and that's fundamentally the leagues and Genius or the leagues and whoever holds those rights. So I think that's a fairly clear relationship that's out there. In terms of the TAM, the way I think about or the way we think about it, the way we model it is we think of each of the major prediction markets being like one of the top U.S. sports books.

So we see the economics of Flutter or DraftKings or Kalshi or Polymarket or Robinhood, we see all of them being equal in terms of their size. So when we think about the TAM and then we think about the opportunity for revenue from us, that's our sort of base case. You've then got marketing around the edge. You've got the addition of Legend, which obviously over-indexes on customer acquisition, which in the current market is extremely good for us because they've got the opportunity to go outside of the current states where you've seen potential saturation from the existing OSB. So we see an outsized opportunity in the prediction market.

But ultimately, we think that the underlying data piece will settle down, as I said, around the large OSB players size.

Jeffrey Stantial: That's great. And then switching gears, Mark, you touched on this briefly in your prepared remarks, but just double-clicking here into some of the focus on specifically or only regulated markets and operators. I just want to clarify, does any of your betting business or material -- any material portion of your betting business revenues come via B2B resellers? Or is it only direct relationships with regulated license operators? And then if you could just sort of broadly refresh us on your compliance processes that are in place to ensure that customers are behaving according to commercial terms and conditions, that would be helpful as well.

Mark Locke: Yes, sure. Look, I mean, I think it's a good question. And obviously, we expect it to talk about this. But I've been doing this for 25 years, and we've always taken very deliberate steps to avoid any exposure to any sorts of these risks. And the way we operate is that we're very, very selective by site. And what that means is that we structurally set ourselves up to only work with operators that meet our very high property standards, which is why we've limited ourselves to such a carefully curated list of only about 500 operators.

Operator: And our last question comes from the line of Greg Gibas from Northland Securities.

Gregory Gibas: You mentioned being flexible with respect to market maker contracts and them being fairly shorter term relatively as a result. So I was wondering if you could -- maybe how you expect those contract terms to evolve over time as prediction markets mature.

Mark Locke: Sure. It's a good question. Look, you've got a couple of levers, right? You've got liquidity and you've got breadth of market and then you've also got regulatory change. And we've got to be focused on all 3 of those. So taking short-term contracts gives us a bit of a view and flexibility around that. As liquidity in those markets grow, clearly, the value of our data and the need for low latency, high-quality specific data becomes more valuable. And that's something that we've got a very clear eye on.

So we see a very, very clear path to revenue -- significant revenue growth in that space as the natural evolution of that market values the higher quality data that's available.

Gregory Gibas: Got it. Very helpful. And as a follow-up, I wanted to just see with your Moment Engine now generally available or greater availability now integrated across partners that represent 90% of programmatic advertising ecosystem, how would you maybe characterize early adoption or engagement with those advertising partners relative to your early expectations?

Mark Locke: Yes. Look, we're super excited about this. The adoption rate that we've seen is really, really good. And more importantly, the results that we're getting are very, very strong. As I think you heard in the prepared remarks, we mentioned Samsung out spending by 220%, and it's early days. So I mean, look, there's a number of test campaigns that we're running at the moment and is still to finish. But if the initial results maintain at the level that we've seen, this is going to be a very strong product in the market.

Operator: Thank you, everyone. That concludes our conference call for today. You may now disconnect.

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