GRSD

• Corporate Rebranding and Strategic Positioning

  • The company completed a corporate rebranding to reflect its growth and diversification from a U.K. gaming comparison hub to an intelligence layer serving the global sports, gaming and entertainment ecosystem for both consumers and B2B partners.
  • The business now has 5 core partner solution areas: sports data (via Optic OS), advertising technology, partner audience monetization (via Grand Sam Partners), entertainment and ticketing (via Spotlight Vegas), and new fintech (via Roll Card).

• Restructuring Completion

  • The May 2026 restructuring is substantially complete, with all associated costs largely incurred in Q2. The restructuring reduced total headcount by approximately 25%, delivering $13 million in annualized fixed cost savings that will benefit margins starting in the second half of 2026.
  • The restructuring also embedded AI into core operations: reduced management layers, automated repetitive processes, and launched internal AI tools including Momento (a company-wide knowledge context layer) and a multi-agent model framework to control token costs.

• Product Innovation

  • Roll Card, a new FDIC-insured high-limit debit card purpose-built for sports betting, casino and prediction market users, launched this quarter. Payments are a major friction point for U.S. gaming consumers and operators, and the business expects the total 5-year revenue opportunity for Roll Card to reach $50 million to $100 million, with 80-85% gross margins prior to marketing spend. The company leverages its existing large audience of high-intent gaming users and existing operator partnerships to accelerate go-to-market.
  • The B2B Optic OS sports data solution processed over 1 million requests per second, and became the 11th most invoked connector for Perplexity AI, with daily API volume growing ahead of the upcoming NFL season. 40% of new Q2 B2B data deals were with international partners, led by quant and market-making clients.

• Balance Sheet and Cash Flow

  • Adjusted EBITDA for Q2 was $7.7 million with a 20% margin, and adjusted free cash flow was $9.6 million, up from $8.2 million year-over-year. Cash conversion for the first half of 2026 was 81%, and the company expects sustained 70-80% cash conversion going forward supported by its low CapEx business model.
  • The company continued deleveraging in Q2, prepaying $10.4 million in deferred consideration and repaying $2.8 million on its term loan. At quarter-end, total cash was $8.8 million, with total liquidity of $33.3 million.

• Full year 2026 guidance is unchanged, reiterated at $165 million to $170 million total revenue, and $45 million to $50 million adjusted EBITDA.
• The company expects strong sequential revenue growth in the second half of 2026 driven by positive seasonal trends from the North American sports season, alongside $6.5 million in restructuring-related fixed cost savings that will drive margin expansion. Adjusted EBITDA and adjusted free cash flow will be significantly higher in the second half than the first half of 2026.
• Full year 2027 is expected to deliver strong year-over-year adjusted EBITDA growth with blended EBITDA margins expanding to the low 30% range. The Marketing segment is expected to return to year-over-year growth in full year 2027.
• Roll Card launch expenses were already included in the original 2026 guidance, with only a small revenue contribution from the new product expected in 2026 as it ramps up.
• Factors that would push full year 2026 results to the top of the guidance range include faster-than-expected growth in B2B sports data and North American marketing, or a recovery in SEO revenue. Sports data revenue is relatively predictable, with lower volatility than marketing.

Total Q2 2026 revenue was $37.8 million, a 5% year-over-year decline. 1. Sports Data Services: Revenue of $11.2 million, grew 12% year-over-year, representing 30% of total Q2 revenue. B2B enterprise sales drove all growth, with B2B now accounting for the majority of Sports Data Services revenue, which is on track to grow more than 50% year-over-year for full year 2026. 2. Marketing: Revenue of $26.5 million, declined 10% year-over-year, representing 70% of total Q2 revenue. The decline was driven by falling organic SEO revenue, which was offset by strong growth in North American marketing and Grand Sam Partners (partner audience monetization). Non-SEO revenue now accounts for 67% of total Marketing segment revenue.

• Organic SEO revenue has seen a year-over-year decline, driven by algorithm changes, tougher regulatory environments in international markets (such as the U.K.), and increased competition from offshore operators. This decline has weighed on total Marketing segment revenue and overall margins.
• The fintech Roll Card is a new expansion outside the company's historical core, requiring ramp-up time and initial launch investment before it reaches meaningful scale.
• The sports data and marketing segments face growing competition from new AI-powered entrants launching lower-priced competing products.
• International markets that are more dependent on SEO face ongoing regulatory and competitive headwinds that limit future growth prospects.

Q: Why did Grandstand choose to expand into payments with Roll Card, and what competitive advantages does it have in this new space? / A: Payments have been the largest friction point for U.S. gaming consumers and operators since PASPA was overturned, and Grandstand has 20 years of deep domain expertise in the space. The company aims to deliver direct value to its existing audience instead of only referring users to operators. It has a built-in high-intent customer base, existing partnerships across the gaming ecosystem, and existing infrastructure that supports the launch, giving it a major advantage over new entrants. The 5-year revenue opportunity is $50 million to $100 million with mid-30s margins.

Q: What are long-term margin expectations for the Marketing segment, and how does the mix of SEO vs non-SEO revenue affect these margins? / A: At current run rate, two-thirds of Marketing segment revenue comes from non-SEO sources. Restructuring cut fixed costs tied to the legacy SEO business, and Marketing segment contribution margins are expected to reach the 40% range going forward, compared to mid-60s contribution margins for the Sports Data segment. Blended company-wide EBITDA margins are expected to hit the low 30% range in 2027: Sports Data will scale with high incremental margins, non-SEO Marketing growth will have a neutral margin impact, and Roll Card will have lower margins during its scaling phase.

Q: How is non-SEO Marketing growing, and what is its long-term potential? / A: Non-SEO revenue now makes up two-thirds of total Marketing revenue. Grand Sam Partners, the partner audience monetization platform, has grown over 100% year-over-year. North American marketing overall is up 63% year-over-year, driven by diversified channels including CRM, paid social, brand advertising, and prediction market partnerships. While Sports Data will continue growing quickly, Marketing is not expected to be surpassed by Sports Data in total revenue for the next several years, and has substantial room to grow from its current size with its new diversified structure.

Q: What is the product pipeline for the high-growth Sports Data segment? / A: B2B sports data has strong, broad-based demand: new customer segments like prediction market operators and quant market makers are driving growth, and 40% of new sales are now from international clients, up from zero a year ago. The company is steadily upselling existing clients as it adds new features to Optic OS. Non-sports data products recently launched, and the company will continue expanding the Optic OS platform to cover more end-to-end needs for sports book operators beyond the core trading and risk management use case.