GENI

Company Strategic Positioning

• The firm positions itself as the "operating system of modern sport", owning the official data, technology, and audience layer that regulated sports ecosystems rely on.
• AI increases the value of the company's proprietary official first-party data and owned audience, as generic AI-generated content proliferates across the open web, making owned, real data and audience more valuable.

Legend Acquisition Integration & Synergies

• The Legend acquisition closed in early 2026, with Q2 2026 being the first full quarter of combined operations, and integration is proceeding ahead of schedule.
• Legend adds an owned, durable audience of ~118 million users, two-thirds of whom are repeat users, and acquired customers have ~60% higher lifetime value for operators after their first year.
• Group revenue increased $77 million year-over-year, while sales and marketing expenses only rose $3 million, reflecting that the business owns its audience rather than renting it, creating immediate margin leverage. Synergies are building faster than initially expected, with cross-selling across the combined customer base already delivering results, and the bulk of synergy opportunities still remaining.

Product & Commercial Momentum

• The Genius Moment Engine added 174 new customers in Q2 2026 (up from ~70 new customers total through the prior quarter), including major brands such as McDonald's, YouTube TV, and DoorDash, most of which are new incremental customers to the combined business.
• The World Cup served as a successful proof of concept for real-time targeted advertising, with one brand seeing roughly 3x higher CPM efficiency than planned and the lowest cost per click of any of their World Cup campaigns. Moment Engine capabilities will be expanded to NFL-related media activations in the coming season.
• Genius IQ, the company's AI-powered data automation platform, improves margin by enabling faster, more automated higher-value products, and is already driving margin improvement. It is used across multiple use cases including more immersive broadcast experiences, real-time sponsorship activation, richer commentator analysis, and transparent, fast officiating for leagues.

Prediction Market Business Development

• After quarter-end, the company signed direct commercial agreements with Cauchy (Kalshi) and Polymarket, covering official data, pricing/modeling, and customer acquisition.
• The NFL has publicly stated that prediction markets cannot operate with integrity without official league data, which the company provides, though management does not expect the NFL to approve prediction markets in the near term and has not included any related revenue in 2026 guidance.
• The company holds data rights for multiple leagues that have already approved prediction markets including Serie A, Liga MX, and the Argentinian Football Association, and the business is already generating meaningful revenue from prediction markets in Q2 2026. Management expects significant long-term upside from this category.

• Management raised full year 2026 guidance, updating total revenue to a range of $1.005 billion to $1.025 billion, from the prior lower range.
• Full year 2026 adjusted EBITDA guidance was raised to a range of $285 million to $295 billion, implying an adjusted EBITDA margin of roughly 29%. The $15 million increase to both revenue and adjusted EBITDA guidance represents nearly 100% flow through of Q2 2026 upside, driven by better-than-expected execution, faster Legend integration synergies, and new commercial deals.
• The company expects to generate ~$145 million of unlevered free cash flow in the second half of 2026, representing 70% unlevered free cash flow conversion of projected H2 2026 adjusted EBITDA. After ~$30 million of interest and ~$10 million of debt repayment, levered cash flow conversion is expected to be 50% for H2 2026.
• The company expects to exit 2026 with ~2x net leverage, and will continue reducing leverage in 2027 while maintaining ample liquidity. The firm remains on track to hit its 2028 target of 60% unlevered free cash flow conversion, which is now more visible than when the target was initially set.

Total Q2 2026 revenue was $196 million, up 65% year-over-year.

1. Betting Segment: Revenue grew 28% year-over-year. The segment has delivered over 25% annual revenue growth each year since 2023, and represents roughly 52% of total Q2 revenue. It serves over 500 sportsbook brands across regulated markets, with more than half of total company revenue coming from outside the U.S.
2. Media Segment (includes Legend acquisition starting May 1, 2026): Revenue grew 193% year-over-year, with organic growth for both legacy Genius and Legend Media solidly above 20% year-over-year. The segment represents roughly 48% of total Q2 revenue. Q2 2026 total adjusted EBITDA was $53 million, up 54% year-over-year, with a 27% adjusted EBITDA margin, 250+ basis points above the margin implied by prior guidance.

• Forward-looking statements, including all guidance, are subject to risks that could cause actual results to differ materially from projected results, including regulatory risks related to the expansion of prediction markets.
• Slower-than-expected adoption of prediction markets, or delayed approval by major leagues including the NFL and NCAA, could limit upside from this new category. The company does not participate directly in prediction market trading, but revenue is dependent on the growth and regulatory acceptance of the category.
• Sports betting market volatility and geographic or sport-specific slowdowns could impact betting segment results, though the company's contractual revenue model with minimum guarantees mitigates much of this risk.
• Integration of the large Legend acquisition could underperform relative to current expectations for synergies and cost savings.

Q: What key learnings has management had from the Legend acquisition and integration process, and how is integration progressing? / A: Management confirmed that the original acquisition thesis, which called for immediate material synergies, has already been proven correct, with synergies delivering ahead of schedule. Operational integration of the two teams has gone very smoothly, product development is proceeding as planned, and technical crossover between the two product sets is already beginning. The overall integration process has been far more successful than expected. (307 characters)

Q: Could slowing online sports betting handle growth and growing prediction market competition create risks for your business heading into the NFL season? / A: Management noted that any growth in sports-related trading, whether traditional online sports betting or new prediction markets, expands the company's total addressable market and is net positive for Genius. The company's contractual revenue model with fixed minimum guarantees insulates it from the volatility that impacts operators, a dynamic that has been tested multiple times in past periods of market weakness. The firm's diversified global business, with roughly half of revenue coming outside the U.S., further reduces geographic concentration risk. (461 characters)

Q: Can you explain why your pricing and data models are so valuable for prediction market makers, and could Genius eventually participate more directly in prediction market making? / A: Management explained that the company has 20+ years of experience pricing sports trading risk on regulated exchanges, so building pricing models for prediction markets leverages existing infrastructure with very little incremental cost. Demand for these services is growing alongside the prediction market category, and management sees this as a clear long-term growth opportunity with strong incremental margins. The firm is already seeing positive early results from market pricing services and is optimistic about future growth. (389 characters)

Q: What is driving the guidance increase for the media segment, and how much of that upside comes from prediction market advertising versus new brand advertisers outside of sports? / A: Management responded that the media upside comes from multiple sources, not just prediction market growth. The 2026 World Cup successfully brought in a large number of new brand customers, kickstarting new long-term relationships. Additional upside comes from cross-selling synergies with the newly acquired Legend audience, as well as broader industry trends that have made live sports advertising a higher priority for brands globally. (330 characters)

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