Genius Sports Raises 2026 Outlook After Q3 Revenue and Cash Flow Growth

Genius Sports (GENI) raised its 2026 outlook after third-quarter revenue and adjusted EBITDA exceeded its guidance, supported by strong betting growth, a sharp increase in media revenue and initial synergies from the Legend acquisition. The sports data and technology company also generated $53.6 million of quarterly free cash flow as its adjusted EBITDA margin expanded substantially.

Revenue for the three months ended September 30 rose 62% to $269.9 million from $166.3 million a year earlier, exceeding the company’s $260 million guidance. Group adjusted EBITDA increased to $87.1 million from $34.0 million, ahead of its $85 million guidance. Adjusted EBITDA margin reached 32%, up 11.9 percentage points year over year, while the company reported a 51% year-over-year flow-through to adjusted EBITDA.

On a GAAP basis, Genius Sports recorded operating income of $10.4 million, compared with an operating loss of $25.6 million in the prior-year quarter. Its net loss narrowed to $15.7 million, or $0.06 per share, from $28.8 million, or $0.11 per share. Net interest expense increased to $19.1 million from $138,000.

The adjusted EBITDA calculation excluded several items, including $16.1 million of non-routine litigation and related costs, $15.2 million of stock-based compensation, $13.9 million of acquired-intangible amortization and $5.3 million of acquisition-related employee payments.

Betting and prediction markets drive growth

Betting revenue increased 33% year over year, extending the company’s pattern of double-digit growth. Genius Sports attributed the business’s performance to fixed minimum guarantees, contractual price increases, product cross-selling, contract renewals, in-play gross gaming revenue growth and expansion into prediction markets.

The company said the NFL season started strongly, with in-play gross gaming revenue rising nearly 50%. It is also generating revenue from more than 50 new customers across the prediction-markets value chain, excluding NFL-related activity. Its services cover customer acquisition, the supply of real-time official data to institutional market makers providing trading liquidity, and data supplied to exchanges for trade settlement.

Media revenue grew 126% from a year earlier. Genius Sports said revenue synergies from Legend contributed to its financial outperformance, while integration of the acquired business was progressing as expected across operations, technology and data.

Advertiser adoption also expanded following the launch of the company’s Moment Engine. Genius Sports added 279 new advertisers during the quarter, compared with 174 in the second quarter. Net revenue retention for the second-quarter customer cohort was 224% in the third quarter, reflecting expansion, contraction and churn among those customers while excluding business from advertisers newly acquired during the quarter. The company also identified GeniusIQ as a platform for creating additional brand sponsorship opportunities.

Cash generation improves, but year-to-date free cash flow remains negative

Third-quarter operating cash flow climbed to $79.4 million from $27.2 million a year earlier. Free cash flow, a non-GAAP measure, rose to $53.6 million from $3.3 million, representing conversion of 61% of adjusted EBITDA compared with 10% in the prior-year period.

The quarterly improvement contrasts with the first nine months of 2026, when operating cash outflow totaled $67.9 million and free cash outflow was $136.2 million. For the nine-month period, revenue rose to $653.3 million from $429.0 million and adjusted EBITDA increased to $163.7 million from $87.9 million. The year-to-date GAAP net loss widened to $147.9 million from $91.0 million, reflecting items that included higher transaction-related expenses and net interest expense.

2026 outlook raised

Genius Sports now expects 2026 group revenue of $1.015 billion to $1.035 billion and group adjusted EBITDA of $287 million to $297 million. At the midpoint, the forecast implies an adjusted EBITDA margin of 28.5%. Management also expects more than $100 million of free cash flow in the second half of 2026.

The forward outlook is presented on a non-GAAP basis without a reconciliation to comparable GAAP measures because the company said certain required items depend on future events and cannot be forecast without unreasonable effort.

Key uncertainties include the integration of Legend and whether Genius Sports can realize the acquisition’s expected benefits and cost savings. The company also cited potential disruption to customer relationships, acquisition-related legal, tax and regulatory exposure, and possible dilution from shares issued as earn-out consideration.

Its prediction-markets activities carry additional risks, including potential trading or market-making losses and uncertainty over how sports-related event contracts are treated under gaming, derivatives and other laws. Genius Sports also remains exposed to its reliance on relationships with sports organizations, changes in regulation, litigation, information-technology risks, foreign-exchange movements and broader political and macroeconomic conditions.