Genius Sports Ltd (GENI) 2021 Q3 法說會逐字稿

Welcome to Genius Sports Q3 2021 Financial Results. (Operator Instructions) Today, I'm pleased to present Brandon Bukstel, Investor Relations Manager. Please go ahead.

Good morning, everyone, and thank you for joining us today. Before we begin, we'd like to remind you that certain statements made during this call may constitute forward-looking statements that are subject to risks that could cause our actual results to differ materially from our historical results or from our forecast. We assume no responsibility for updating forward-looking statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our last annual report on Form 20-F filed on April 30.

During the call, management will also discuss certain non-GAAP measures that we believe may be useful in evaluating Genius' operating performance. These measures should not be considered in isolation or as a substitute for Genius' financial results prepared in accordance with U.S. GAAP. A reconciliation of these non-GAAP measures to the most directly comparable U.S. GAAP measures is available in our earnings press release and earnings presentation, which can be found on our website at investors.geniussports.com.

With that, I'll now turn the call over to Mark Locke.

Good morning, and thank you for joining us today. We're thrilled to announce Genius' growth is accelerating at an unprecedented level and we have delivered another strong quarter with record revenues growing over 70% year-on-year. On today's call, in addition to updating you on our performance in the quarter, I'd like to focus on 3 key updates. First, we'll provide quantitative detail on the recently announced agreements with our Sportsbook partners. Off the back of our exclusive NFL contract, we structured mutually beneficial partnerships which fuel industry-wide growth and accelerate our journey to meeting long-term targets.

Second, we plan to formally frame the size of the market opportunity for our media and engagement business. On our previous earnings calls, we've outlined our differential fan engagement solutions and now we hope to round it out by articulating the total addressable market and our place in it.

Third, we'll discuss our vision for the future and highlight some of the incredible opportunities that we have in front of us. We're excited to share the work we've done and the areas of investment that will enable Genius to continue to fulfill its place as the technology leader in the sports ecosystem.

I'll cover each of these topics in more detail shortly. But first, I'd like to quickly recap on some of the highlights from the third quarter. We're very excited about the progress we've made since our last call. And this quarter's strong results reflect our team's continued execution.

First, we've reported record revenue of $69.1 million in the third quarter. This represents another quarter of strong revenue growth, increasing by over 70% year-on-year, driven by well-balanced growth across all business segments, while adjusted EBITDA was broadly breakeven. As we've mentioned in the past, our core business strategy lies in our approach to efficient data and our deep, long-standing partnerships with leagues and federations worldwide. This quarter alone, we signed over 30 new rights deals with leagues as global and varied as Kazakhstan Football Federation, Canadian Soccer Premier League, China Super League, Croatian Basketball Federation, Israeli Volleyball Association, Drone Racing League, International Pool Association, Swedish Basketball Federation and a personal favorite of mine, Professional Pickleball Association. I could go on.

Each new league partnership expands the breadth and depth of our coverage of high-quality events and supports our customers' provision of content around the clock. As Q3, our leading rights portfolio includes 192,000 events under official rights, of which over 120,000 are exclusive. We are the leading technology provider to leagues and federations around the world. As an example, we recently announced that Second Spectrum was appointed the exclusive official tracking data provider of Danish Superliga and First Division.

With Second Spectrum's cutting-edge technology, Genius will be able to provide Danish football fans with transformative new statistics, including player speeds, acceleration, deceleration, shot velocity, path probability and expected goals. These insights will be made readily available across multiple platforms, combining tracking data, visualizations, augmented reality and customizable graphics to deliver truly immersive fan experiences. This demonstrates our successful integration of recent acquisitions and our unique ability to create value across the sports and entertainment ecosystem.

We've also continued to leverage our exclusive NFL partnership to build upon our key Sportsbook relationships. These agreements enable us to provide a full range of official Sportsbook content and fan engagement solutions to help our customers better engage and monetize their users. While we're still in the early stages of our NFL partnership, we're very excited about the vision to enhance the value of NFL's content and reimagine the way that sports is consumed.

As we'll discuss in more detail shortly, our recently announced deals, served as a brilliant foundation to achieve our longer-term ambitions. In addition to the key Sportsbook announcements, we've also announced our first team-based partnership with the Philadelphia Eagles, where we'll deliver real-time betting odds to drive fan engagement in Lincoln Financial Field's sports betting lounges. A fundamental part of our NFL partnership is to provide innovative platforms for teams to engage with legalized sports betting. And so we're excited about this new development.

Additionally, as part of our disciplined M&A strategy, we remain focused on the efficient integration of newly acquired businesses. For example, Spirable helped companies like Hennessy, Pringles and Heineken increased brand awareness with sports fans through deeply personalized dynamic video content. The Spirable technology allows brands to automatically deliver custom tailored data-driven content to sports fans in real time, which we look forward to rolling out to an even wider range of partners as part of our broader Genius platform.

Additionally, using FanHub's platform, we launched new free-to-play experiences for partners across different verticals, including sports leagues, sports betting clients and even brands outside of sports and betting such as Jersey Mike's and Buffalo Wild Wings.

With leading technologies like Spirable and FanHub, Genius has broadened the options available to a wide range of customers who are seeking to connect with a sports audience in a purposeful and efficient way. With the commercial progress we've made this quarter and the positive global sports betting market backdrop, we're raising our 2021 revenue guidance to a range of $257 million to $262 million, equating to over 70% year-on-year growth.

Nick will cover the financial aspects in more detail shortly.

A core focus of the business this quarter was to structure commercial agreements with our Sportsbook partners to include the NFL offering. As many of you know, our partnership with the NFL is far more innovative than any other right deal in the market and differentiated from the NFL's previous rights deals with its incumbent. We're extremely happy with the commercial deals we've made, so I wanted to provide a bit more detail on our success.

These are all encompassing strategic deals that include our full suite of products. Let me give you an example of a typical deal that exemplifies how we are engaging with U.S. sports books. They typically include an absolute commitment to use Genius data where we own the official rights. Streaming, outsourced managed trading and other value-add technology services, a commitment to advertising spend across our media products, including FanHub and Spirable, and an average 3-year term, providing a perfect balance between short-term visibility and medium-term flexibility as the market evolves.

The NFL agreement has only increased our opportunity to successfully expand our commercial partnerships to include our all-encompassing suite of solutions. As we're partially through our first NFL season, we're happy to provide more color on the specific NFL component of these wide-ranging deals. To start, over 97% of NFL bets placed in the United States are powered by Genius Sports. We've agreed commercial terms that properly reflect the value of our premium data. While our contracts include a full range of products, if we were to isolate specifics around NFL, our take rate of prematch gaming is in line with our current global blended average while our in-play take rate is a weighted average in excess of our stated goal of 5%. This sets Genius up to benefit from both the growth of the NFL sports betting market and the continued shift to in-play betting. It's worth noting that the elements of the deal structure will vary by contract, but we often structure our deals to limit our downside exposure by creating minimum revenue guarantee floors, which allow us to reduce some of the inherent volatility.

So in periods with lower holds and significant promotional spend like we've seen recently, these deal structures give our revenues and protection. Overall, these commercial agreements support an accelerated path to our long-term target of an average of 5% take rate of global gaming revenue.

Lastly, our customers have committed to spending an initial minimum of $125 million across our media products, including FanHub and Spirable over the average of the 3-year terms. However, we've seen so much success that certain major customers will spend their entire first year's commitment within the first 4 months of the contract. The majority of these commitments come from customers we were already working with, and they have, therefore, had the confidence to trust unions in the long term, thanks to excellent results that we've delivered to date. This confidence is proven by DraftKings, making Genius their preferred programmatic partner and BetMGM making Genius their exclusive programmatic partner.

As a reminder, Genius was named the NFL's exclusive sports betting and igaming advertising partner. A new component of our rights deal that doesn't exist anywhere else in the market and is completely unique to our capabilities. This gives us access to the NFL's audience and select digital advertising inventory that, when combined with our live data and deep understanding sports fans, puts us in a unique position to drive better return on our partners' customer acquisition spend. Again, the breadth and depth of agreements we've reached are exactly what we envisaged when we first structured such an equally innovative and wide-ranging NFL partnership.

So we touched on the committed advertising spend through our NFL deals, and now we'd like to provide more detail on the market opportunity and the key growth movers for our business. Our media business provides services that extend beyond just sports and betting and allow us to capture a share of digital marketing budgets across a range of customers, representing an entirely new addressable market. We see our addressable opportunity as the $60 billion Global Digital Sports Advertising Market. Now this is obviously highly competitive and include search engines, traditional ad agencies and other solutions developed in-house. However, we believe that our unique access to the data and inventory through our exclusive partnerships leads to a differentiated offering with high rates of return for our customers.

That said, based on our penetration to date, predominantly with Sportsbook customers, we believe a market share of 75 to 100 bps is achievable in the long term for the entire digital sports advertising market. In order to reach this long-term market share and the $500 million revenue opportunity it represents, we believe we'll need to broaden and diversify our media customer base. Our advertising solutions are valuable to any brand seeking to connect with sports audience using contextually relevant data-driven content. For that reason, we believe our media customer base today represents a fraction of what it can become.

Whilst it is most certainly early innings, this is a business that has doubled year-over-year. We've made strides in diversifying our customer base to include brands outside of sports betting that are interested in leveraging our unique access to sports audiences, live data and content distribution capabilities.

I'd like to conclude my remarks by clearly defining our vision for the future. Our goal is to create a business that takes a slice of every sports-related transaction globally, whether that's a bet, a ticket sale, a live stream, a purchase of a hotdog in a stadium or a jersey sale, Genius exists to provide the technology platform that both powers these transactions and enables true global fan monetization. The investments we've made, both organically and through Second Spectrum, FanHub and Spirable have created the world's leading sports technology platform. Nothing in the market comes close to what we have, and we are miles ahead of our competition.

As a result of that, the commercial conversation that we are having with our existing partners such as the NFL have taken on an entirely new meaning. Not a single conversation with a league or federation goes by without discussing the massive opportunities for them to tap into our vision and cutting-edge unique technology services that only we can deliver. Therefore, we have defined a more aggressive investment road map that will enable us to continue to put clear water between us and the rest of the industry through our truly differentiated cutting-edge technology platform.

This strategy will not only deliver the world's greatest integrated solution, but also give us a phenomenal advantage in our negotiations with leagues. They will strengthen our long-term positioning and reduce the risk of rights inflation. To reiterate, one of the main reasons that the NFL chose to partner with us was because of the shared vision around our technology capabilities. This shared vision is now coming to life as we're beginning to deliver on it. We have absolutely no doubt if we invest now, this vision can be delivered to every league and every fan worldwide. This is such a unique opportunity that we simply must take advantage of it. Therefore, we plan to reinvest heavily in the business to continue delivering on our vision and strengthening our competitive advantage.

And with that, I'll now turn to Nick to discuss our financial results and outlook in more detail.

Thanks, Mark. As Mark mentioned, our Q3 results reflect our solid execution in the underlying business. Third quarter group revenues increased by over 70% year-on-year to a record $69.1 million, with each business line increasing significantly, demonstrating another quarter of diversified and well-balanced growth.

First, our betting technology content and services grew 48% year-on-year to $43.6 million. Growth in this segment was driven by increased pricing with existing customers, new customer wins and increased utilization of available content. In the third quarter, we also recognized revenue for the first 3 weeks of our inaugural NFL season.

Our media technology content and services revenue continues to increase at a phenomenal pace, more than doubling year-on-year to $13.9 million. Strong growth in our media business was driven by new customer wins, both within sports betting and non-sports betting sectors.

And lastly, the sports technology and services revenue increased 159% to $11.6 million, once again, getting significant contribution from Sportzcast and Second Spectrum.

Our revenue to date is trending positively towards our full year outlook. And we've made exactly the right kinds of commercial deals in the quarter to continue our momentum through year-end. It gives us great confidence to increase our revenue outlook to a range of $257 million to $262 million, equating to over 70% year-on-year growth at the midpoint. We're also revising our adjusted EBITDA target to be broadly breakeven for the year, as we expect to reinvest in the business to achieve the long-term vision that Mark has just spoken about. As Mark mentioned earlier, we structured our commercial agreements in line with our expectations, and we're more excited than ever about our opportunity to generate solid returns on our groundbreaking NFL deal.

We've reached terms that allow us to earn a significant share of gaming revenue. We've leveraged our unique position to increase customer utilization and take market share. And our partners have contractually committed to spending at least $125 million in marketing spend through our Ad-Tech platform. The business is poised for continued revenue growth as the sports betting market continues to expand and evolve.

Broadly speaking, within the U.S. and globally, we feel confident in our ability to continue taking market share, achieving premium pricing for value-added content and services and executing on our partners' committed media spend. This, coupled with the dynamic growth and maturity of the global sports betting market, should drive well-balanced revenue growth over the next several years with meaningful contribution from multiple levers.

As Mark has just touched on, we also recognize that we are in a unique stage early in our growth cycle that presents a window of opportunity to be front-footed and financially flexible in order to fund the long-term scale and build the infrastructure to achieve our vision that Mark described. We think about those strategic investments in 3 categories: firstly, technology development. We are transforming global sports, betting and media through our technology and we're focused on continuing improving our existing tech platform. For example, continue to innovate Second Spectrum technology to reduce latency, improve tracking and expand to new sports such as American Football.

Secondly, we're also focused on accelerating our right strategy to continue building a best-in-class portfolio of data and streaming rights. As noted previously, many of our data and streaming rights generate meaningful near- to medium-term payback. So we're investing ahead of the revenue curve in many instances.

And thirdly, we continue to build out our U.S. infrastructure to support our expanding local operations. Additionally, there may always be other opportunities outside of these 3 categories where we see potential for shareholder return and to improve our competitive position.

To recap, our global business continues to perform strongly, and we expect continued revenue growth through the year of 2021 and beyond. On an adjusted EBITDA basis, we expect the business to be broadly breakeven or better on an ongoing basis in order to maximize the potential of our strategic reinvestments of underlying profitability.

To conclude, we are excited and focused on the big picture opportunity ahead of us. We believe that we are in a strong position to capitalize on this rapidly growing market. We also believe that the disciplined reinvestment of near-term earnings is the best use of capital at this stage in our growth cycle to position us for success over time and achieve our long-term vision. In fact, our current market position and thoughtful deployment of capital gives us even more confidence in achieving our previously communicated long-term aspirational targets of 40% market share, 5% of gaming revenue and 40% adjusted EBITDA margin at scale.

Thank you again for your participation. We'd now like to open it up to Q&A.

(Operator Instructions) The first question is from the line of Jed Kelly from Oppenheimer.

Nice quarter. Two, if I may. Just, Mark, on your 5% comment on global GGR, can you kind of expand on how we should think about it? We kind of hear from the operators that, that might be a little too aggressive, that maybe we're oversimplifying it. And then just on the guidance on the quarterly guidance, can you give us an update on how your betting revenue is trending in October and November relative to the guidance?

Jed, it's Nick. Let me take the second one first and perhaps, Mark might be able to pick up the first bit. But on the second one, I understand the question, and I know the market has been some noise around operator profitability in October. I think Mark said on the call, we certainly have some downside protection there. We structured our deals to such that we have that in our deals. And any views on where we sit in October and the first couple of weeks in November have been taken into consideration when we've upped our revenue guidance to the $257 million to $262 million.

On the -- on your first question, if you're asking if 5% of global gaming revenue is too aggressive, I think that's the question, right?

Yes, correct. I guess, that is how you structure one of your recent deals, yes.

Yes. I mean we don't think so. We think on a long-term basis, it's evidently achievable. And what we were saying in the earnings was really that we're on a sort of very strong journey, probably slightly ahead of where we thought we would be towards reaching that. I think I said in the earning, a lot of the deals were striking on the in-play with the NFL in excess of our long-term goals. So we feel very comfortable with that.

Got it. And then just as a -- I guess, 2 quick follow-ups. I guess, the November holds. We've seen some mean reversion there. And then one more question, Nick. On the third quarter, media revenue, very strong, I mean, is third quarter going to be the peak quarter for you guys for media, just given the cadence on how the OSB operators advertise?

Yes. Jed, I mean I can't really comment on the November position here. I'll just kind of refer back to my comment I think I made in the October position. In terms of media, yes, very strong revenues. There is an element of inorganic growth in there. But on the underlying basis, the revenues are still significantly up year-on-year. I'm -- actually, third quarter isn't that high for us. I'm anticipating actually our fourth quarter to be a slightly higher position than where we've come out on Q3 and all that, again, is built into the $257 million to $262 million guidance.

The next question is from the line of Stephen Grambling from Goldman Sachs.

I just want to clarify, I guess, a couple of things. One, I guess is the NFL transaction trending to the cash breakeven that you thought? And when you're referencing some of the reinvestments into the business, where are the biggest buckets that this is being allocated to? And just to confirm, I think you said that your commitment is to a breakeven going forward. Is that on an annual basis?

Let me have a first go at that and then I guess, Mark and the guys can chip in and add if they want to. So yes, there's a couple of questions there. You're right. Just on that last point, we, as a board management team are united in managing the business in the short term to an EBITDA breakeven or better position. And that will be on an annual basis, there will obviously be ups and downs on a quarterly basis as we go.

In terms of where we're looking to invest, I mean, I think Mark was very clear on the call, we're in a really early position in our growth cycle and the opportunities in front of us are really accelerating significantly. And therefore, being front-footed in the ability to invest now, we think is the right decision. Now practically, what that means is really 3 areas. First of all, I think we've called out rights. This remains to even that foundation of our growth and we'll continue to and have done historically continue to invest in that area. And like a lot of rights deals, not just in our industry, in any industry, some of those rights deals means investing ahead of the revenue curve. But we will only do so on right deals that we think is a long-term value for the business.

Second area is tech. And again, you've heard from Mark about our sort of leading tech position in the market. But as you know, we can't really stand still there. We're looking to turbocharge the investment. And I look -- and I particularly call out our acquisition is a great example of that. Second Spectrum technology, we're looking to invest in such areas as low latency, improving the tracking, building out the products in other sports that they don't currently footprint in for things like U.S. football.

I guess a good example, I guess, to just bring everyone to attention to show sort of early dividend of our investment that we're making there, you might have seen on the CBS podcast over the last couple of weeks, the Second Spectrum visual overlays that are on there. Obviously, the rights will affect COGS, as you know, that will be a significant amount. The technology will come into the R&D section. And then really, that last area is the investment in the U.S. operations.

We have been very careful over the last 2 years, I think not to put too much infrastructure into the U.S. on the ground too early. But obviously, given our phenomenal U.S. growth that we're seeing, and you'll see when you get into the detail in the quarter, the U.S. is actually 21% of our revenues for the quarter. That's the first time. It's that significant, and I expect that to grow again in Q4. And now it's the right time to really be putting in that infrastructure.

I'll talk about commercial teams. You've seen our announcement of Steve Bornstein and really to optimize that growth. So that's the other way. And that will really, across the income state, will be in a number of areas, both in terms of sales and marketing but also will impact SG&A little bit as well. So they are the areas that we're really investing.

In terms of your original question around NFL and how we're getting on, I think we said last time, it's going to be increasingly difficult given the nature of these deals to separate out a particular sport and the individual profitability as you know how we go to market. And I think this particular, our U.S. enhanced deals, because they're so wide and all-encompassing, right across our products and our suite of products, media, data, trading, streaming, also across the whole portfolio, not just the 272 NFL events, it's going to be increasingly difficult.

What I will say, Stephen, is we're learning every week. We are -- what are we now? And I think we're up to week 11 of a 6-year deal. So we're really still in the very much the foothills of this deal. And we're learning a lot. We're learning a lot about all sorts of things. Not just handle, but in terms of -- we're learning about revenue mix. We're learning a lot around Sportsbook proportionality, which obviously has an impact. We're -- in play versus preplay. Per Jed's question, operator profitability as well. All this is we're learning.

What I can say is that this deal is driving that phenomenal U.S. growth quarter-on-quarter, year-on-year, in upwards of 200%. And this deal is the absolute cornerstone of that and will be significantly profitable in the U.S. contracts over the course of the life of the next 3 to 5 years.

And so perhaps one follow-up there. Since you mentioned rights, as being effectively the primary focus. Maybe if you could just touch base on the NBA deal that was recently signed, how you thought about that potential partnership and the impact that, that could have from the agreement with one of your competitors.

It's Jack Davison here. I'm the Chief Commercial Officer. I think it's a really interesting question. I mean just to give a bit of background on -- where we are and how we arrive at this point. I mean clearly, the NBA is important, and we were part of that process, and that's something that -- having the NBA is part of our stable of rights in that way would be something that would clearly be good for the business. The flip side to that is that there has to be balanced process, balanced judgment around the viability of any deal we do with any rights sale, whether it's the NBA or anyone else, and we've got to be prudent and smart about how we do that.

I don't want to talk specifically around elements that are for us, but perhaps a good way of articulating it, would be to sort of compare it a little bit to the NFL and that relationship, because we see some similarities but also quite a lot of differences, really. And ultimately, we have to find a way to make sure that we were making smart decision for the business. So good differences, the NFL deal that we have, it gives us, as we've talked about, and Nick and Mark articulated, a lot of benefit in the media space. We get a lot of inventory. We get a lot of assets as part of that relationship that enable us to show the sort of growth that we've talked about today, and that's a big part of the ecosystem. None of that stuff was really available as part of the NBA dynamic, partly because -- I'm sure everyone knows that they have a JV with Turner with some of the digital assets. So that stuff just wasn't on the table. That made it quite difficult from our point of view.

The other part of it, and we've talked a lot about this is really that whole innovation piece and the relationship with the NFL is not just about the NFL, but it's actually about allowing us to move and do all of the things that we want to do in a wider sports technology ecosystem forward and do that. And that, again, wasn't really available as part of the deal that's been signed.

The final part, and perhaps the most important part from our point of view and really where we -- while we wouldn't pretend that we wouldn't want the NBA as part of our portfolio, we couldn't really square the circle on with the structure of the deal really -- our understanding is that the NBA will continue to maintain a direct relationships with all downstream sports betting operators, that we'll see them continue to take a share we've handled directly from those operators, NBA, that sits outside of the ecosystem.

Effectively, from our point of view, that very much felt like operators gain charged twice, once for the data and once from the NBA directly to be part of the ecosystem. And we just couldn't square the circle on those numbers and make it make sense from our point of view. So we will be thrilled to have the NBA as part of our portfolio. That hasn't happened, but it's also true that our betting revenues for the NBA, at the moment, are extremely limited. And so the impact of not winning that deal on our business is very, very small at this point.

The next question is from the line of Mike Hickey from Benchmark Company.

Congrats on the quarter. Just curious on your view of the Canadian opportunity. Looks like, obviously, they're moving to a regulated market beginning with Ontario. Just sort of thinking how expansionary do you think that could be? Obviously, there's a sizable gray market there. And then also, care is on the media side with a lot of operators going into the market.

Yes. Yes, Jack Davison again, Chief Commercial. I'll be happy to pick this up. I mean for us, regulation has always been a good thing, right? There is a -- what you're going to see is a business that's going to come out of the shadows. And we know that they exist there, and we know there's a gray market to something that's going to become more mainstream, obviously, starting with Ontario. For us, like as those -- as Ontario and in time, other states in Canada, you regulate in a more traditional way, I guess, is the U.S. -- same way the U.S. sports -- U.S. states regulating, that's a good thing from our point of view. It's opportunity. Like suddenly, there was a real opportunity in terms of -- from both the size of the market that can grow, but that is mostly from a data and trading point of view and all of those things. We obviously like our position in terms of the NFL because the NFL has some weight in Canada.

So we like that from that point of view, but also from a marketing point of view, it creates a whole new opportunity for us to work with regulated operators who can spend property on marketing, and we can hopefully mirror a lot of the success that we've seen across the U.S. states, in Canadian states as they open up.

So for us, it's obviously good news. The opportunity is -- it's more opportunity in areas that we feel very, very good about the business. Not only just in the sports betting space but all of those relationships, we'll be able to build with media partners there, publishers there, all of that stuff that we were able to execute. In the U.S., we hope to be able to and expect to be able to mirror in the Canadian states as they open up. So hopefully, that answers your question.

The next question is from the line of David Bain from B. Riley.

Great. My first question is if we're seeing a shift to longer-term data rights agreements and just given the length of some of the larger deals that we're seeing, can you speak to the potential disruption to a league to perhaps displace an incumbent today, versus what you envision 3 to 4 years from now, with your technology and kind of technical plan. I mean, could pricing with certain partners actually stay flat or even decline multiple years from now? Or how do you view that?

Yes, it's a really good question. And we think about it a lot. And frankly, it's a lot of what's driving our technology investments. We believe that as this market evolves, the sports leagues are going to need much difference in kind of specialized technology sets. And what we're seeing in our business actually is since the acquisition of Second Spectrum, we increasingly -- I mean, I think almost every single lead conversation we're having now includes elements of Second Spectrum and some of that next-gen technology. So the way that we see this evolving over the time is an increasing reliance on those technologies.

And again, that will be reflected in those rights fees going forward. So part of the -- as I said, part of the drive and part of the thing we're so excited about and the opportunity that we see is really getting our technology widely distributed, making sure that we treat the considerable distance that we have in the market, i.e., the technology advantage that we have both from the likes of Second Spectrum, the data and the tracking analytics, but also the marketing side as well, where we've got really unique views of audience. And the continued investment in that should give us that position in the future to have significant leverage in those conversations around rights fees.

Okay. Great. That's helpful. And my second one would be, you mentioned a very significant TAM in your prepared remarks that you're entering, specifically the advertising market with non-betting platforms. Can you give us a little bit more color on what type of platforms you're having traction with? And is this something we can see a substance to deal on by, say, early next year? Or is this a longer-term opportunity at this point?

This is Josh here, the Managing Director for the media business. The -- yes, exactly that. In terms of the addressable market for the media business, we're already seeing a lot of traction in that space. In terms of the platforms that we're branching out to, it's really an expansion of what we're already doing for operators in the programmatic sphere and rolling in the technologies from FanHub and Spirable. Essentially, we believe that ultimately, that technology applies equally as well to major brands around sports, be it Coca-Cola and Anheuser-Busch. It will ultimately drive the same fantastic results that our Sportsbook customers have seen.

Okay. Great. And is this something we could see some substantive announcement on early next year? Or is this something we should think about having real impact to the model sometime in the next year or 2?

Yes. I mean we're already winning a number of contracts in this space, probably the most recent one is Jersey Mike's, where we provided them with their tailgate trivia free-to-play game. We've provided a lot of advertising services around that to promote the game. So there's already a few customers that are there, and we've got a really strong pipeline as we head into '22. So I expect us to be making plenty of announcements around new wins in the sort of outside of the sports betting space over next year and years beyond.

The next question is from the line of Bernie McTernan from Needham Company.

Great. Maybe just to start, the $125 million committed advertising spend. Just wanted to clarify that, that's in aggregate over the next 3 years? And if it's only in the U.S. And then I'm assuming these deals have basically been struck over the last 3 months, just wondering how they came in versus your initial expectations?

This is Josh Linforth again. Yes, that's correct. The deals are structured over 3 years. In terms of the market, the majority are across the North American market. There's a few nuances where there's some international spend, but the majority of it is focused on the North American market.

Understood. Can you just remind us about how big the media revenue stream is outside the U.S. currently?

It's Nick. I mean, traditionally, we've been around about 50-50 in terms of U.S. versus rest of the world on a media basis, that's not heavily more slanted towards the U.S. right now. And that's certainly where the focus of growth is over the course of the next 18 months to 2 years. As Josh just talked about those deals, they are predominantly North American focused.

Understood. And Nick, just a follow-up. On FanDuel, struck an agreement with them yesterday. That was great to see. But I was just wondering if there was -- how you guys were -- I believe you were supplying them with NFL official data in the third quarter. So just wondering how that was booked from a revenue standpoint.

Yes. Yes, of course, you're absolutely right. And for everyone else's benefit on the call, and we continue to provide FanDuel with the services throughout the period as a long-term sustainable partner with FanDuel. The announcement that we issued 48 hours ago, that is -- we expect a deal to take us back to the start of the NFL season. And what we've done is there was an element of the deal that was recognized in the quarter because we already had a pre-agreed deal with them. So that's been recognized for the first 3 weeks of the NFL. And then we will recognize the remainder of the deal retrospectively for those first 3 weeks.

What I will say is, obviously, it's one operator for 3 weeks. It's not a material number, Bernie. And the new deal metrics have been built into the revised guidance of the $257 million to $262 million.

The next question is from the line of Ryan Sigdahl from Craig-Hallum Capital Group.

Curious on -- there's been a trend towards in-house sports trading services, but at the same time, FanDuel in that agreement, you were just talking about expanded its take rate of your live trading solution. So I guess where are you seeing the most headwinds as well as tailwinds from a management trading services standpoint?

It's Jack Davison. I think in what we see here is a kind of -- what you're seeing with the FanDuel in particular, is a comfort of -- their comfort in outsourcing elements of their sports betting operations to a company like us. So you're seeing a real balance of some stuff being in-source currently but also, we'll focus on what is being in-sourced by an operator from an operational point of view. So real focus, as you can imagine of FanDuel on trading the NFL, which we don't do for them. But they -- at the same time, the outsource elements of that.

So you will end up, I think, seeing a combination of these things. The trajectory of the industry, I think, will be about much more efficient in terms of where they spend money, where they get the most bang for their buck. And I think that our view and as played out with our customer agreement, is increasingly large ways of their operational function will indeed be outsourced.

And then on Ad-Tech, do you have any comparative metrics or customer acquisition cost improvement or anything you guys can compare internally on how your solutions are faring versus traditional sources?

And then secondly, how do you feel about your human and technical resources for Ad-Tech and marketing? You guys missing anything there?

This is Josh Linforth again. Yes, happy to provide some context in terms of the results that we've delivered. I can give you a specific example of one operator that we've been working with this NFL season and the results that they've seen through Genius' Ad-Tech solutions, have been really strong. So to give you an idea of that, on average, that customer sees the first deposit value breakeven against the total ad spend. So to give you an example, if we spend $100 to acquire a player, on average, their first deposit value is $100. And actually, within the first 30 days, we tend to see, so far, this season around about 285% return on ad spend in subsequent deposit values off of those players acquired by Genius.

So needless to say, those are some pretty strong results and that individual customer is very happy about the results. And I can think of another operator who, by the end of the year, is on track to exceed their minimum commitment in their first contract year with us on their media contract. And that speaks to the results that they've seen so far through Genius.

Ladies and gentlemen, in the interest of time, we have to stop the Q&A session. So the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.