Genius Sports Q3 2026 Earnings: Revenue Rises 62% as Operating Profit Turns Positive
Genius Sports reported fiscal Q3 2026 revenue of $269.9 million, up 62.3% year over year, driven by Betting growth and the Legend acquisition. The company achieved its first positive quarterly operating income of $10.4 million and generated $53.6 million in free cash flow, while its adjusted EBITDA margin expanded to 32.3%. Despite operational improvements, a GAAP net loss of $15.7 million persisted due to $19.1 million in net interest expense from $787.4 million in total debt. Management raised its full-year guidance for revenue and adjusted EBITDA. Key risks include acquisition integration, debt servicing, cash flow volatility, and regulatory uncertainty in prediction markets.
Genius Sports (NYSE: GENI) reported fiscal Q3 2026 revenue of $269.9 million, up 62.3% from $166.3 million a year earlier, while GAAP diluted loss per share narrowed to $0.06 from $0.11. For the quarter ended September 30, 2026, the company recorded its first positive quarterly operating income, generated $53.6 million of free cash flow, and expanded its adjusted EBITDA margin to 32.3%.
Media revenue growth was primarily driven by the Legend acquisition, while Betting benefited from higher pricing, expanded services, and growth in existing markets.
Key Financial Results
Revenue increased by $103.6 million year over year. Gross profit rose by $50.7 million while operating expenses increased by a more moderate $14.7 million, allowing Genius Sports to move from an operating loss to an operating profit.
Lower stock-based compensation also supported the improvement. The expense declined by $10.7 million to $15.2 million, equivalent to 5.6% of revenue compared with 15.6% in the prior-year quarter.
| Metric | Q3 2026 | Q3 2025 | Year-Over-Year Change |
|---|---|---|---|
| Revenue | $269.9 million | $166.3 million | +62.3% |
| Gross profit / margin | $92.0 million / approximately 34.1% | $41.3 million / approximately 24.8% | +122.7% / approximately +9.3 points |
| Operating income (loss) / margin | $10.4 million / approximately 3.9% | $(25.6) million / approximately (15.4)% | $36.0 million improvement |
| Net loss | $(15.7) million | $(28.8) million | Loss narrowed by 45.5% |
| GAAP diluted EPS | $(0.06) | $(0.11) | Loss narrowed by $0.05 |
| Adjusted EBITDA / margin | $87.1 million / 32.3% | $34.0 million / 20.4% | +156.4% / +11.9 points |
| Operating cash flow | $79.4 million | $27.2 million | +191.8% |
| Free cash flow | $53.6 million | $3.3 million | $50.3 million improvement |
Adjusted EBITDA and free cash flow are non-GAAP measures. Genius Sports defines free cash flow as operating cash flow after capitalized internal software costs, property and equipment purchases, and intangible asset purchases.
Business and Segment Performance
Betting Technology, Content & Services revenue increased 33.4% to $153.0 million. Genius Sports attributed the growth to price increases during contract renewals and renegotiations, additional value-added services, expansion within existing markets, and new service offerings.
Media Technology, Content & Services revenue rose 126.4% to $116.9 million, primarily because of the Legend acquisition. Media generated a larger dollar increase than Betting and represented approximately 43% of group revenue, up from about 31% in the prior-year quarter.
Genius Sports also expanded into prediction markets through partnerships with Polymarket and Kalshi and launched Prediction.com. The release did not quantify the quarterly revenue contribution from these initiatives.
Operating Profit Turned Positive, but Interest Expense Kept GAAP Earnings in the Red
The first positive quarterly operating income did not translate into net profitability. Net interest expense increased to $19.1 million from $0.1 million and exceeded the company’s $10.4 million operating profit. Genius Sports also recorded a $1.1 million loss from remeasuring contingent consideration and a $7.1 million income tax expense, partly offset by a $1.7 million gain from an equity-method investment.
These items resulted in a $15.7 million GAAP net loss despite the operating profit. Adjusted EBITDA was substantially higher because the non-GAAP measure excludes interest, taxes, depreciation and amortization, stock-based compensation, litigation costs, and certain acquisition-related expenses. The quarter’s reconciliation included $16.1 million of litigation-related costs and $5.3 million of acquisition-related employee payments.
The quarterly improvement has also not erased the year-to-date loss. For the first nine months of 2026, Genius Sports recorded an $88.3 million operating loss and a $147.9 million net loss, compared with a $91.0 million net loss in the prior-year period.
Cash Flow and Balance Sheet
Quarterly operating cash flow reached $79.4 million. After $20.7 million of capitalized internal software costs, $5.1 million of property and equipment purchases, and minimal intangible asset purchases, free cash flow was $53.6 million. That represented 61.5% conversion from adjusted EBITDA, while unlevered free cash flow was $69.4 million.
The nine-month cash flow picture remained weaker. Operating cash flow was negative $67.9 million, and free cash flow was negative $136.2 million, compared with negative $64.1 million a year earlier. The nine-month operating cash deficit included sizable outflows related to changes in accounts payable and accrued expenses.
Cash and cash equivalents stood at $206.5 million on September 30, down from $280.6 million at the end of 2025. During the nine-month period, Genius Sports spent $578.8 million in cash on a business acquisition, issued $825.0 million of long-term debt, and repaid $137.7 million of loans and mortgage obligations. At quarter-end, current and long-term debt totaled approximately $787.4 million.
2026 Guidance
Genius Sports raised both ends of its full-year revenue and adjusted EBITDA ranges. The new midpoint implies a 28.5% adjusted EBITDA margin, while management expects approximately $260 million of year-end cash and more than $100 million of free cash flow during the second half of 2026.
| Metric | Latest 2026 Guidance | Previous Guidance | Change |
|---|---|---|---|
| Group revenue | $1.015 billion-$1.035 billion | $1.005 billion-$1.025 billion | Raised by $10 million at both ends |
| Adjusted EBITDA | $287 million-$297 million | $285 million-$295 million | Raised by $2 million at both ends |
| Adjusted EBITDA margin | 28.5% at the midpoint | — | New midpoint implication disclosed |
| Year-end cash | Approximately $260 million | — | No prior figure provided |
| Second-half free cash flow | More than $100 million | — | Implied by year-end cash outlook |
Management View
Founder and CEO Mark Locke emphasized the cash generation of the combined business. Management sees the Betting operation, expanding Media capabilities, the Legend acquisition, and opportunities in prediction markets as the main foundations for continued growth and profitability.
The company’s commentary places particular importance on using its existing sports data and technology infrastructure across more products and markets. However, no separate revenue or profit contribution was disclosed for the prediction-market initiatives.
Risks Investors Need to Watch
- Acquisition integration: Media growth was primarily driven by Legend. Delays in integration or failure to realize the expected commercial benefits could affect revenue growth and margins.
- Debt and interest expense: Approximately $787.4 million of debt and $19.1 million of quarterly net interest expense create a meaningful gap between operating performance and GAAP net income.
- Cash flow volatility: Q3 produced positive free cash flow, but free cash flow for the first nine months remained negative. Meeting the year-end cash outlook depends on the expected second-half cash generation.
- Adjusted versus GAAP profitability: Litigation, acquisition-related compensation, stock-based compensation, and amortization remain significant exclusions from adjusted EBITDA and can continue to weigh on reported earnings.
- Prediction-market exposure: Genius Sports identified regulatory uncertainty, potential trading or market-making losses, and evolving legal treatment as risks associated with its prediction-market expansion.
Summary
Genius Sports’ Q3 2026 results marked a clear improvement in quarterly operating performance, supported by Legend-led Media growth, continued Betting expansion, lower stock-based compensation, and stronger cash generation. The main questions now are whether the company can sustain positive free cash flow, integrate its acquisition effectively, and convert operating progress into GAAP profitability despite higher debt and interest expense.
This article may include AI-generated content that is human-reviewed, which is for reference and general information purposes only and does not constitute investment advice.
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