Q1 2024 Genius Sports Ltd Earnings Call

Participants

Brandon Bukstel; IR Contact Officer; Genius Sports Ltd

Mark Locke; Chief Executive Officer, Co-Founder, Director; Genius Sports Group Ltd

Nick Taylor; Chief Financial Officer; Genius Sports Group Ltd

Jed Kelly; Analyst; Oppenheimer & Co., Inc.

Bernie McTernan; Analyst; Needham & Company Inc.

Ryan Sigdahl; Analyst; Craig-Hallum Capital Group LLC

Robin Farley; Analyst; UBS

Ben Miller; Analyst; Goldman Sachs & Company, Inc.

David Bain; Analyst; B. Riley Securities

Clark Lampen; Analyst; BTIG

Jordan Bender; Analyst; JMP Securities

Chad Beynon; Analyst; Macquarie Research

Eric Martinuzzi; Analyst; Lake Street Capital Markets, LLC

Brett Knoblauch; Analyst; Cantor Fitzgerald

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Today's conference call will begin momentarily. Until that time, your lines will, again, be placed on music hold. Thank you for your patience.
Thank you for standing by. My name is Pam, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Genius Sports first-quarter 2024 earnings results. (Operator Instructions) Thank you.
I would now like to turn the conference over to the company. You may begin.

Brandon Bukstel

Thank you, and good morning. 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 annual report on Form 20-F filed with the SEC on March 15, 2024. 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 US GAAP. A reconciliation of these non-GAAP measures to the most directly comparable US 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 our CEO, Mark Locke.

Mark Locke

Hello. Good morning, and thank you for joining us today a s we begin another year on a positive note, with strong momentum across the business. Before we dive into the results, we'd like to begin by thanking our partners at Apax for their support and investment over the last six years.
You may have seen last month that Apax used their holdings in Genius to a level where they now step down from our Board of Directors. The Board Representatives from Apax provided valuable insight and expertise as we went through a period of transformative growth, expanding from $88 million of revenue in 2018 to $0.5 billion forecast in 2024.
We have spent the last three years as a public company, working very hard to cultivate a great group of public equity investors who we are proud to call shareholders in Genius Sports. And we look forward to working with them and many others over the years ahead.
And with that, we're very happy to report our ninth consecutive quarter of outperformance relative to our guidance, once again, demonstrating our consistent and predictable business model and strong execution. In the first quarter, we grew revenue by 23% year on year to $120 million, beating our guidance of $117 million.
Our group adjusted EBITDA was $7 million in the quarter, also exceeding our guidance of $6 million. We remain focused on consistently outperforming financial targets whilst delivering on our core strategic objective of becoming the must-have digital partner for leagues, sports content distributors, sportsbooks, and brands.
The first quarter was an excellent example to highlight each of these areas as we continue our wide-scale distribution of technology and value-enhancing products across the sports ecosystem. This is exactly how we have retained key lead partnerships over the years and positioned our commercial model for sustainable growth and profitability and cash flow.
Our strong start to the year make this even more confident in our outlook. So we are raising our 2024 group revenue and adjusted EBITDA guidance to $500 million and $82 million, respectively, up from $480 million and $75 million [beginning] the year.
This implies year-on-year group revenue and adjusted EBITDA growth of 21% and 54%, respectively, and raises our group adjusted EBITDA margin to 16.4%, representing 350 basis points of improvement. We are also reaffirming our cash flow positivity for the full year, which will continue to strengthen into 2025.
As we reach this important annualized milestone, we may be more proactive in deploying capital across a range of potential initiatives, such as M&A, share repurchases, or otherwise. Therefore, we want to position ourselves to any opportunity that may arise in the future as we continue to mature as a public company. As such, we are carrying out a few steps to optimize our overall financial flexibility with relatively low cost capital.
Firstly, we are close to $90 million revolving credit agreement with Citibank and Deutsche Bank, which , combined with our cash and balance sheet, gives us greater flexibility to access additional capital if ever necessary. Second, as a matter of general corporate housekeeping, Genius Sports is now WKSI eligible, following our three-year anniversary of listing.
Therefore, in accordance with customary market practice, we intend to file an F-3 shelf registration statement this week. Our intention with this filing is simply to follow ordinary best practice in SEC housekeeping now that Genius is WKSI shelf eligible.
We are taking these steps towards greater financial flexibility because we want to be nimble when the potential opportunities arise in the near to medium term, particularly as our business fundamentals continue to improve and we gain further clarity on our long-term growth and profitability prospects.
Our confidence in the underlying business fundamentals is reinforced not just by our financial results, but from the successful execution of our core strategic objectives. For example, we continue to reach wide-scale distribution of our computer vision and AI technology with leagues federations around the globe, the broader our reach, the more we established Genius Sports technology as the standard for next-gen data collection.
The foundation with leagues across the globe is strong and continuing to expand. And we successfully launched several new betting and media products on that basis. Most notably in the last few months, we struck long-term technology partnerships with the likes of fever, Lithuanian Basketball League and the WNBA., which is the first women's professional sports league in the US to utilize.
We also to the end of last growth market. Important proof point, colleagues are increasingly focusing on capturing the rich data and enabling new forms of analyst local insights of broadcasters, media outlets and fans all built on a Genius Sports technology.
This then becomes the foundation on which we are launching new products such as that vision and real-time broadcast augmentation solutions, which are being monetized today. One real exciting example of how we've taken this as a step forward is our new partnership with Premier League team, Brentwood football club. I'm one of the responses geotech to power augmented highlights to fan Instadia and on social media.
We have now combined our player tracking Ambrose cars, augmentation tools with our advertising technology to create entirely new sponsorship inventory to Brent foods. Sapiens naming partner Lightspeed becomes a new sponsor will asset to Brent's at Entergy tech. It represents an opportunity to associate their brand with the most engaging moments of the match shots on goal, our ability to automatically capture this data through computer vision and AI and to transform it into a creative graphical overlay.
All in real time is completely unique to Genius Sports technology, creating another level of connectivity for leaks, sponsors and fans. In summary, the greater our distribution, the more product we can monetize at scale and the more integral We becomes too leaks themselves.
This is how we have successfully retained key lead partners like the NFL and English Premier League over time. Technology is increasingly front-and-center in our lead relationships, and this is the type of differentiated value that we provide.
For instance, last summer, we extended our two most important data rights agreements, the NFL and for good data cuts, which governs all of UK football, including the English Premier League in March. We also announced that we're now in exclusive discussions to extend our football games co agreement through 2029 season. While this agreement is still under final negotiations, we are delighted that they have chosen to work with us for another four years given the massive importance of UK.
So on a global basis, this relationships has materially improved our commercial offering in the global sports betting market over the years. Looking ahead, we expect that this will continue to be a key pillar of our growth strategy through the end of the decade.
While we obviously cannot disclose specific terms of the deal, we want to address head on what we expect from our business over the length of this relationship, like what we have proven with our NFL partnership, a strong and long-term relationship with equity stake will enable us to continue expanding margins and increasing cash flows.
With the trajectory that we did was envisaged. We are now more confident than ever in our ability to sustain strong revenue growth for this foreseeable future. And don't envisage this growth slowing in the near term, given the positive structural tailwinds and the momentum in our business.
In fact, nothing our two largest data rights deal secured for the next four or five years gives us an even greater visibility of our cost base and a higher degree of confidence in the trajectory and the pace at which we reach our long-term EBITDA margin target of at least 30%, ultimately converting to increased cash by the increased guidance we announced for the remainder of 2024 should be indicative of our momentum into 2025.
Not to mention this also affords us four to five years more to become even more deeply integrated with the digital infrastructure of leaks. This enables more ways to try to access next-gen data antibody in many different ways. Spence funding, broadcast fan engagement, advertising, sponsor, activation and sports betting. Ultimately, the access to this data enables us to continue fueling growth in our core business model.
These rights agreements gives us access not just live data feeds to power sports betting markets, but to the broader sports ecosystem where we can leverage data and technology to activate audiences with data driven content, marketing services and immersive gaming experiences year-after-year, we approved and how our commercial model is built to benefit from the multiple tailwinds that exist in the world of sports, whether it's growth in the online sports betting market, growth in in-play betting, growth in sports, digital advertising spend and increased engagement in sports as a whole, we are poised to benefit in many years.
Wes. This is how we've been able to achieve our strong results over the years. I'll now turn the call to Nick to discuss the Q1 results in more detail. Thank you, Mark. We are very happy to report another quarter of outperformance relative to our expectations. Each quarter, we discussed the many ways in which we can outperform, whether that from a growing sports betting TAM, in-play betting, improving win margins, cross-selling additional products and content for high demand for digital advertising services.
This quarter, our outperformance was primarily driven by our media business, which increased by 63% year on year, marking a significant reacceleration of growth and our strongest quarter in nearly two years. This was driven by meaningful spend for major US sports book operators around the key sporting events, namely the NFL playoff, the Super Bowl and March Madness, as well as the launch of online sports betting in North Carolina in the quarter.
And that is just seen on slide 8, we are executing digital advertising campaign for many non-banking brands around these key sporting events as well, ranging anywhere from food and beverage brands to individual leagues and teams themselves. Betting revenue also increased year on year by 14%, largely driven by strong revenue share performance in the US, albeit a relatively small contributor to overall betting revenue in the quarter, we also reported group adjusted EBITDA of approximately $7 million, slightly ahead of our $6 million guide.
As it relates to our adjusted EBITDA this quarter, there are two points worth noting. Third, as I mentioned last quarter, we expanded our NFL partnership last summer to include domestic streaming rights, which powers our that vision product to sports book was entirely new in the 2023 2024 NFL season.
These light to expense equally in each month during the season, including January and February. As a result, this has an outsized effect on our Q1 2024 profitability, simply because there were fewer NFL games to generate revenue. Despite this new set of rights being accretive over the course of the fall season.
Second, our adjusted EBITDA is largely a function of the mix between packing and media revenue, with betting outperformance typically contributing to profitability. The higher incremental margin media has significantly outperformed in Q1. And therefore, the incremental flow through this outperformance was approximately 32%.
Turning to cash, we finished the quarter with $93 million on the balance sheet, roughly in line with where we expected to finish the quarter. And we're constantly reaffirming our expectation to be cash flow positive in H2. And for the full-year 2024, to conclude our results from the quarter and our increased revenue and EBITDA guidance to $500 million and $82 million, respectively.
Sets us on a steady path to our long-term adjusted EBITDA target of 30%-plus, we are more confident than ever about the core strategic objectives. And as a result, we're working to extend our relationship with arguably the most important sports assets globally. Therefore, we are feeling very optimistic about 2025 as well.
And while we are not issuing formal guidance just yet, we believe our increase in 2020 for guidance to be broadly representative of our structural momentum into 2025, as we expect continued revenue growth, margin expansion and increasing cash flow. With this strong momentum and additional financial flexibility, we have a heightened sense of excitement across the business, and we look forward to sharing future updates.
With that, we now conclude our prepared remarks and open the line to Q&A session.

Question and Answer Session

Operator

(Operator Instructions) Jed Kelly, Oppenheimer.

Jed Kelly

Great. Thanks for taking my questions. Are Just two, if I may. Just on the increase in the back half guidance. Is that under current that in my confidence around some of the contract renewals coming up for more momentum in the bedding tech services are in the media that we are the media tech and content services?
And then Mark, appreciate the opening comments and potentially raising capital. Where do you actually see the most opportunity in your technology for portfolio? Or where is the most opportunity for growth that you would potentially do an acquisition? Thank you.

Mark Locke

Okay, that's good to hear from it. Your first question and the increase in the back half. I mean it is what we're seeing in the business that we've got an awful lot of momentum and the things that things are going extremely well.
And we're not really focusing too much on contract renewals as part of it is about general momentum in the business. And it is not released after we take into account the back half. In terms of capital business, as I said, has been a strong foundation of income businesses.
They're performing well, want to have optionality and five, which is which is and why do you plan progress with the revolver? I mean, the two main areas that we see as potentially is really M&A and potentially to the share buybacks and in the future. But we're taking this one step at a time.

Jed Kelly

Thank you.

Operator

Bernie McTernan, Needham.

Bernie McTernan

Great. Thanks for taking the questions. Just wanted to talk about the data rates and get a sense maybe to start how competitive it was to get the exclusive negotiating rates for football derecho. And then Mark, just given your comments on some of long-term profitability in getting to 30% plus EBITDA margins and just any insight into the rights costs and commentary on the impact on cash and profitability based?
I want to ask of these contracts generally have large Tier one step-ups and should we expect EBITDA to be going backwards for a given year when those step-ups, if ever setups occur if they do happen? Thanks. Yes.

Mark Locke

Thanks, Bernie. I mean, look, and we said along the way, we're in a really in a strong position Jadestone. Nevertheless, I know that's been proven on the basis we want to I'm absolutely delighted with very, very happy with the deal that we've done so and we're feeling good about the impact on the business. I mean, one thing that I'm it is sort of becoming clear is we listened to the market and talk to people is the people.
And, you know, I guess don't totally appreciate. And the deal and the relationship that we have with Safeco is that this is a lot more is a lot broader than just the data, the data rights relationship. We we're a technology lead business. We've said all along that technology deployment and the use of that technology strengthens our position in the market.
And that has become a really key part of these negotiations. And again, we're feeling really good about that technology deployment and a lot of the opportunity and a lot of the sort of a partnership, a lead, the new drivers that are coming from that I hope I've been in there because it's think of the second part, I think am I I think we said the prepared remarks, the data yet.
We feel very optimistic, not just about 24, but actually that 25 and 26 and the great thing about the deal, the SDC. deal, although albeit it's obviously first negotiations, I can't comment specifically on those turns is it gives us a really strong visibility now all the way out to kind of 2029, 2020 30 on our major rights deals.
And as I said, repaired Mark, who's doing what we've done in 2022 to 2024. We expect it to continue through 25 26, which is continued double digit revenue growth, continued margin expansion and continued increased cash flow throughout this year. But then the following years as well. I mean, one other thing I guess it's worth adding is that when when we did the NFL deal, we were pretty clear about the opportunities that the NFL and gave to us and all those years ago.
And off the back of that, I think we categorically proven that that was a very strong deal and has allowed us, as Nick said, to continue on our profitability in May, margin expansion. And we see data cone exactly the same way in which we're delighted with it. And I'm really excited about the future through.

Operator

Ryan Sigdahl, Craig-Hallum.

Ryan Sigdahl

Good day, Mark. Mark, maybe just a direct follow-up to Bernie that last question by what the new data rates contract with better for Mark, do you expect your operating leverage on data rates as a percent of revenue next year?

Mark Locke

Hey, Ryan, I guess first, just to remind everybody is on any new data, right, feel that we're currently in exclusive relationship impacts. The second half of 2025 with the current deal obviously runs until the 25. But in some extent run, I'm going to slow, I repeat myself.
What I said to Bernie, is that on the three key things that I'm concentrating on line that we have the business financially concentrating on is double digit revenue growth, continued margin expansion link and cash profitability and increases. And as you know, we've had some success in that of three 23 on of also having just to add to that as well, I mean, we winning data coal on a long-term basis and from a from a commercial point of view, is a really strong position for us to be.
We've got the two largest sports and 11 in the world in our in our stable and on that, that gives us a really good basis for and long-term partnership conversations with with our clients and really puts us in a sort of a leading position there. Forget just for my follow up second spectrum, a lot of great products and innovation coming kind of partnership with leagues, NFL, EPL. So on, albeit an exploratory partnership with about three, six five.

Ryan Sigdahl

So switching to kind of the operator side, but any update there and kind of the potential to really accelerate second spectrum and some unique stuff you can do more so from an operator customer standpoint?

Mark Locke

Yes. Great question. And the animal be the operator side of this is a big part of our focus at the moment. We are spending an awful lot of time and investment on that vision. That's I'm really proven.
M&A is actually in a day and it's delivered results that we're ahead of what we and I guess what we had anticipated, having said that before, any one of these goals. So and we're going to we're putting a lot of focus on that.
And you know, I think I do the proof point of that vision and has been made. So our job now is just to focus on execution, focused on delivering an additional product and rolling this out to the bookmakers community on a wider basis.

Ryan Sigdahl

Really nice job, good job guys.

Operator

Robin Farley, UBS.

Robin Farley

I think back to ask about the support that coal agreement and maybe asking a slightly different way than the previous questions, we think about the increase in revenue in the UK rate, it generally expected to be at a much slower rate of growth and then US revenues.
So should we think about the increase in APL sports rights expense, which I realize it's not been finalized yet, but home you would not be expecting to pay more of an increase in sports rights expense. They're not faster than the revenue growth that you expect in the UK.
If that is that reasonable to conclude from your commentary about margin expansion, that the sports cost rates wouldn't be increasing more there and your expectation for UK home lending revenues for the growing of things.

Nick Taylor

I will then take let me start on that, and then I'll hand over to Mark to give you a bit more color. I mean, the thing that I guess I think I understand the question of it. I mean, you must remember UK soccer items, the largest bedding for in the world and is not a huge K. centric. I'm betting, right? It is a global, but you a great example for that.
Of course, as you know, LatAm is opening up and then latest numbers that are coming out of Brazil will be ending revenues this year, the back half of the year with significant and UK soccer will be a major attraction and major marquee event for that part of the world as well as many other part.
Well, not just UK sizing that SaaS, the perhaps the bit that missing your hypothesis book and maybe to maybe to phase it more and more specifically, that means that your sports rights expense would not grow faster than you expected revenue growth from the those rates, whether it's the new K. or I should have more clear that sort of obviously, we'd get revenue from it in other countries.
But that the increase in those other markets and in revenue with noting that you're increasing for threat would not be greater than that revenue increase globally. They said this a reasonable expectation?
Or I guess I mean because we wanted just to be clear, there's obviously we don't go to market with just one set of rights. As you know, we package those lights up and a new K. soccer. At the same way, NFL is no different to anything up. And I don't envisage that changing over the course of the extended contract out to 2020 ninth, UK soccer.

Mark Locke

I think what I'd say is that a little bit what I said to me to Ryan and Bernie is that now we've expanded our margins through 20 to 23 and 24 and did our guidance that we've just as it relates again to move our margins from 15.6 to 16.4 in this year.
And I'm fully expecting that margin to continue to increase in 25, an increase in debt in 26 and beyond. So to that extent, and therefore, I'm expecting any new rights deal for SDC. to be more than cover them, that shouldn't stop us continuing to have a strengthening EBITDA margin across the life of the FTC contract.

Robin Farley

Thank you. And then just one quick follow-up. Can you give us a change in them in play as a percent of total? Thanks.

Mark Locke

Yes, hey, we'll know in terms of in play, I mean, as you can give you kind of NFL in play, I mean, if you look at it on a year-on-year basis and its own employees, TGL. was up 140% year on year. And if I look at the mix, which I think there's probably you are asking for is the NFL employee mix, GGR was 22%.

Robin Farley

Okay, thanks.

Operator

Ben Miller, Goldman Sachs.

Ben Miller

First of all, DataCo negotiations ongoing. I'm curious how you think more broadly about the data rights portfolio today and any other holes that you'd like to fill and an industry level, how you see consolidation of data rights playing out over time, whether that's through organic wins or through inorganic consolidation effects.

Mark Locke

But yes, I mean and ensure we've got everything we need and if anything, and you know that the number of rights that we and sort of feel like we need to own and have a long-term basis actually decreasing, not increasing. And the more we distribute our technology in a more that we roll out the products are second spectrum into other sports.
And and the position that we've got through the relationship we have with the NFL and with data coax means that actually we sort of feel the opposite effect in that. We know that we I guess you've seen over that over the previous years in terms of the number of products that we want to be going after we finish while we feel that it really, really strong position on this stuff.

Ben Miller

Thanks. And just a follow up on that vision. I'm curious, um, in terms of like how you're prioritizing that, is it more to grow the number of sports books that are adopting that, that product? Or do you see the larger opportunity of expanding to traditional sports that time utilized that vision product that?

Mark Locke

Yes, great question and the office both. And we are increasingly focused on rolling any sportsbooks an odd way with that vision products. And if you watch this space, you'll you'll see you'll see news over the over the coming months on that. But it is same time.
We can't you can't just be a one-trick one-trick pony. And therefore, what we are I'm actively doing is adding additional content to that vision, additional and products. We've got to get it right. And so we're being cautious about our execution. But again, that's a that's a big focus of the business.

Operator

David Bain, B. Riley.

David Bain

Great. Thanks, everyone. I just had one question, and I'm not sure if I missed this, but they are nicely in the wake of what I believe was low one QOSB. We hold for the industry. I'm wondering as you can quantify the impact of the quarter from that pay date?

Mark Locke

You're right. Obviously, we had a setting calls, others who the quarterly results that you've been listening to. And I think from the usual them underwhelming, I think on a previous call and you're writing that clearly does impact us because, as you know, we take a position of gaming revenue.
Having said that, Haven and I've said many times is and the great thing about geniuses, the different levers of growth that we have in this business, obviously, operating with larger is one.
But as you know, in-play mix time, not just in the US but outside the US just named check Brazil in one of the previous year. Questions as well as our media, which has allowed us to deliver on guidance for this quarter. So yes, operating wind margins is helpful for us, but and we've got a number of different levers that allow us to outperform our guidance that we can give.

David Bain

Okay, perfect. Thank you.

Operator

Clark Lampen, BTIG.

Clark Lampen

Thanks for taking the question. I have one on the media business. I guess specifically as it relates to the outlook, a lot of the momentum that Mark you talked about earlier in your prepared marks seems to be showing up, I guess, from a numbers standpoint in that business.
Could you help us understand, I guess maybe what you attribute that to and how much this sort of idiosyncratic rather than systematic? And for my second question, can you just remind us on renegotiations?
It sounds like that's that's obviously not a focus right now, but remind us based on the past cycles when exactly we could expect you to start to engage with your partners in earnest now down the contractors that you're now sort of late 3Q or in conjunction with the football season? And does that mean with step-ups that eventually come that most of that will be realized in 4Q or so later down the road? Thank you.

Nick Taylor

Thanks a lot, Clark. I'll start, and I'll hand over to Mark on that. Second part of the question, I'm absolutely delighted at the reacceleration of 63% growth in the media business year on year on the number of things really that I have driven that. I think we've seen some really good strong spend in Florida, for example, we've seen some great spend in places like launches of North Carolina, particularly in March Madness.
As you know, there's a lot of quotes for base that state. And also remember, when we talked in December, we said that there was some timing of the spend that was moved from some of the Christmas holiday season through into January and things like the Super Bowl plants.
So very strong and definitely sustainable. Now I agree that I think probably 63% is running about a half in terms of you on your growth. But if you look at the increase in guy, that's still guiding to a north of 30% year on year on a major space.
And really, as I said in previously, had increased margin, increased double digit revenue growth, increased cash generation to 25 and 26 that we've been talking about clearly need to we'll continue to place significant part of that.

Mark Locke

There's another also sort of answered a softer point on the media on the media side is and yet the growth that we're getting in the revenue delivery of the you'll see is really from the what I call the existing media business only. I mean it's from it is from the business.
You guys are all aware of and you see and you know, it won't have been one of the skate shoe and I think we talked about it before that we've been putting money into and different areas in the media space. We've been building new product, one of which is literally in launch phase.
And the moment, which we have, I think is an expensive because we've got no real revenue expectations in at the moment. And so we're feeling pretty good about that because that products delivering really well. But again, that won't be showing up until H2 of this year. In terms of the revenue lines.
And then the other thing that's candidates and starting to look look really quite some you know, I mean, our promising and coming through really well, which again, is also noted, are not in our view is and is there in the view that we've given is and sort of some of the additional clients split that we're getting. So historically, this business has been all about and really sports, but revenue.
And I've mentioned a number of times these calls that we're looking at bringing in the different additional brands outside sportsbooks and driving revenue growth from media revenue growth from from that. And that's something that we're really starting to see. I'm talking through a more aggressively in the numbers. The split between sportsbook and non-sports book is looking quite attractive. So we feel like and we're in a strong place on the media on the media side.
And we're excited about not only the new products, but also the new clients that we've started to bring on board and just on the renegotiations. And yes, it does not sort of a drop dead date, low suddenly start conversations.
And our job is to be a good partner sport and to continually to have those relationships and have those conversations. So we're always talking to our partners, and that's not really, really changed unplanned new seasons of Sport, which you correctly identified, which which which will definitely feed into the numbers and at some point.
But again, at the moment, we're not we're not putting too much weight on that in any of the annual forecast that we've released to the market.

Operator

Jordan Bender, Citizens JMP Securities.

Jordan Bender

Good morning, everyone. And we have a lot of good data in terms of the performance in the US sports betting market. But the one missing piece we don't really have is hard rock in Florida.
So maybe without getting into the financials that that can you just kind of talk about how you built help them build that business and this the improved any guidance in the back half of the year had any or did the state of Florida have any play within that?

Mark Locke

Yes, hey, Jordan. Is that a lot of it, Florida and hard work is a great example of the sort of underlying success of the business level of Genius on Hardrock just become a bigger customer geniuses.
If they continue to have that done, they have and that's already in market on they saved. I probably can't go into specific details, but everything we're doing for DraftKings and FanDuel, Caesars is exactly what we're doing for hard rock as well within the Florida market events that were providing. Obviously, there's a lot of sports betting.
There's no professional teams based in Florida. And right now, I think I called I will take questions on media. There's also been significant amount of major spenders in Florida, particularly through social media over the first quarter was higher at Hardrock solidify that position.

Jordan Bender

Great. And then on the followed LD debt could be in the picture here. Where could you be comfortable taking leverage up to for the sake of growth?

Nick Taylor

Yes. I mean, I think Mark touched on the certainly to our military, and this is just another building block in our maturing as a business. Nothing changes in terms of our hub.
What we want to do it just gives us firepower to be able to be opportunistic. We've actually filed the exhibit today. So you can go to have look, it's pretty straight towards $90 million as it stands. And as I say, we need to be uses opportune as and when any circumstances dictate.

Jordan Bender

Okay. Thank you very much.

Operator

Chad Beynon, Macquarie.

Chad Beynon

Morning. Thanks for taking my question and nice results. I wanted to drill into the employee mix a little bit more suited to 22%. Was the number. Are you still seeing growth and older vintage states in terms of bidding behavior is not sure if you have that detailed data at your fingertips tips and some states like North Carolina and some of the newer ones in 23 for you just seeing a higher starting point with employers?

Mark Locke

I think we're all just trying to figure out what the ceiling is. The US tax? Yes. Hey, let let me give you color. I mean, first of all of those couple of questions in the first one around sort of the more mature state, yes, we continue to see significant growth in the States. I mean, that's publicly available and you can see New Jersey.
I think the first thing was that the legal add to that a meaningful way, and that continues to grow significantly. I think you look at things like Kansas, the growth I think, doubled year on year in a second here to its 1st year. So yes, absolutely, we continue.
We continue to see can grow. We also continue to see customer behavior, I guess, become more sophisticated, which inevitably draws in play sports betting. We're seeing that on a state-by-state basis as well as you know, products and half versus the third leg of that in terms of growing. And we gave some very early statistics, I bet vision, which is just an example, but a really good example of product evolution in this space.
And we'll continue to see that Mark touched nearly about how that business going to become more ubiquitous over the course of the following years. So you're in terms of where does this go in terms of US market, we've consistently said in mature markets in play. Sports betting is anywhere around that sort of 60% to 70% kind of level of in-place. Both Barry and I will act as a competent to ensure that we anticipate the US will ultimately end up in that position us.
Well. Thank you, Nick. And then on Brazil, you've touched on this a couple of times. I believe you said that it is factored into the back half of the 24 guidance. Any details in terms of when the markets expected to launch and how meaningful this could be in the back half? Thank you.
Yes, I mean, yes, we have we have a very small amount in truth is not a material amount for 2024. So it's not going to change the dial that the latest we have is that with the licenses are being awarded in the second half of this year, probably in the fall with expected backing until to be legalized. And to be actually anything revenues in a really sort of back end of Q3, Q4 for Brazil is you know that there's an NFL game have in Sao Paulo in September and to help drive the in-place both Boeing.
And we understand that there are significant number of licenses that are going to be awarded. But in terms of time, some of the numbers on an annualized basis are really quite significant coming out of Brazil. Certainly several billion dollars' worth of time. We're anticipating I wouldn't get carried away. That's a 24, but that's certainly something that is a real significant opportunity. 25, 26 and beyond.

Chad Beynon

Great. Thank you.

Operator

Eric Martinuzzi, Lake Street.

Eric Martinuzzi

I wanted to go back and revisit the media stream that you had. Just from a modeling perspective, looking out to 2025, do you view this as kind of a new seasonality around the the sportsbooks emphasizing that the Super Bowl or January February, the March Madness is just tell us something we should consider a new normal of forces.

Mark Locke

There was more of a macro issue with the customer acquisition water, so to speak. Yes, I had Q1 and Q4 have been traditionally our strongest, a major segments really following the US sporting calendar. I think that's going to be the case for 2024.
It looks, as I said earlier, we're delighted with 63% year on year increase. I think that's probably a little bit hard to be sustainable, but we're still forecasting given the uptick in guidance that we've just given that this call, we were expecting a major growth annually to the to be north of 30%. So we certainly see being a real acceleration of that business.
I would say on going basis, we're not giving guidance yet for 2025 on. But on a number of questions, we've talked about it in terms of the shape of 2025 and how are you expecting the tailwinds that we've seen in 24 to continue through '25 and '26?
And that should drive those three key financial metrics that we talked about, which is the double digit revenue growth expense in EBITDA margin and the continued cash increase, our media will pay a not insignificant part of that.

Eric Martinuzzi

Thank you.

Operator

Brett Knoblauch.

Brett Knoblauch

Hi, guys. Thanks for taking my question. On the guidance revision you've taken between or was the revision mainly due to the media segment outperforming? Or was it also some greater comp confidence on embedding technology segment as well?

Mark Locke

Hey, if I may, as well as new strength across the whole business, we've got real confidence in what 2020 was looking at. In terms of the specific numbers. The majority of it is major based on obviously in the Q1 metric performance and therefore, the competence we have, particularly in Q3 and Q4.

Brett Knoblauch

Following on from a question in terms of major position, that's the kind of makeup of the 2020 for Viacom private banking. And then on the closer of margins, could you just I guess, remind us again, so at the incremental margins of the better technology segment versus that of the media technology segment?

Mark Locke

Yes. I mean, we're as if it sounds like you've a simple question that this could have a lot less nuances. I mean, the headlines really are is that for every extra dollar that we are impacting, whether that's because your operating margin go up or Tom increases were in play portfolio mix, the extra dollar, the majority of that jobs toolset that close to 100%. Now obviously individual betting products will vary on that basis. But that's the sort of broad headlines.

Brett Knoblauch

Thank you. And then maybe just one last, I guess, US 4.5G, our growth has decelerated in the past few quarters. I guess what is included into your guide for the full year or what are you baking in there? And on, I guess what percent of the US is that the sports betting business?

Mark Locke

So it was the first question. When you say in terms of what we're thinking in terms of the rest of the yield is relationship GGR. Yes. Yes. I mean where we don't give that kind of level of detail on what I'd say is I've said it before on calls in terms of our guidance philosophy is the low end about kind of fall out of 10 or conservatism or even one being very conservative and tend to be very aggressive.
So we're not anticipating any significant upturn in terms of the things like in place, both in play mix, GGR growth or TAM growth, certainly outside of the more conservative forecast for the routes into the market. So we're pretty confident of where we sit here today for us in the quarter.

Operator

Clark Lampen, BTIG.

Clark Lampen

Thank you for letting me back end. I wanted to come back to this sort of point around like financial flexibility and understand that with the balance sheet capacity in your and your free cash flow momentum picking up, the priority would obviously be to acquire as many sort of really IROI. business does or take advantage of high ROI M&A where possible.
But if that doesn't present itself and the universe or whatever recent is not as large or as available, I guess as you might like, how should we think about your propensity to lean into buyback, especially because we have this sort of increasing cash flow momentum over the balance of the year and into next year? Thank you.

Mark Locke

Yes. Good questions. I mean, I sort of mentioned this before, but I'm just on the M&A on the M&A. I mean, the to the two main reasons we won't firepower. As I said before, it is a potential M&A and obviously, the buyback. So on the M&A is an extremely high bar for M&A for us.
What I've said a lot of times, I'll say it again, we've got all the technology that we that we really need, and we're very happy with it. The level of investment and the businesses is making in the way that we operate.
So in terms of M&A, it's got to be a bit that they're going to be businesses that are accretive that and really, you know, Dr. Joe low-value for for our shareholders and in terms of buybacks again, and this is going to be assessed them over.
We feel good about the business is a ton and positive momentum. We're seeing a lot of that come through in our numbers. I'm getting great technology distribution, really good delivery. We've got new products in the pipeline need other businesses like so you know, from my point of view and that the opportunities and are quite vast and we'll assess the buyback as appropriate.

Operator

Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. To me.