Q4 2023 Genius Sports Ltd Earnings Call

Participants

Brandon Bukstel; IR Contact Officer; Genius Sports Ltd

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

Nick Taylor; Chief Financial Officer; Genius Sports Ltd

Ryan Sigdahl; Analyst; Craig-Hallum Capital LLC

Bernie McTernan; Analyst; Needham & Company

Jed Kelly; Analyst; Oppenheimer & Co.

Jordan Bender; Analyst; Citizens GMP

Chad Beynon; Analyst; Macquarie

Robin Farley; Analyst; UBS

Eric Martinuzzi; Analyst; Lake Street Capital

Mike Hickey; Analyst; The Benchmark Company

Brett Knoblauch; Analyst; Cantor Fitzgerald

Presentation

Operator

Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Genius Sports' fourth-quarter 2023 earnings results conference call. (Operator Instructions)
Thank you. I would now like to turn the conference over to Genius Sports. You may begin your call.

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 see no responsibility for updating any 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 30, 2023.
During the call, management will also discuss certain non-GAAP measures that we believe may be useful in evaluating Jesus operating performance. These measures should not be considered in isolation or as a substitute for GAAP financial results prepared in accordance with US GAAP. A reconciliation of these non-GAAP measures, 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

Good morning, and thank you for joining us today as we conclude another year of consistent execution and that performance. Over the last few years, we have carried out many strategic and commercial objectives to position our business, the structural and sustainable success. The results of these objectives and our player in our financials, as we announce our eighth consecutive quarter ahead of expectations and presents a business that is strong, well-positioned, and profit today, as it's ever been.
To recap, we reported Q4 revenue of $127 million, beating our guidance to $126 million and representing 21% growth year on year. This brings our full-year revenue to $413 million, which is $22 million ahead of our guidance at the start of the year and represents a 21% growth compared to full year 2022.
Anchored to a cost base that does not grow in line with revenue growth. We converted 52% of every incremental dollar to our adjusted EBITDA in 2023, demonstrating a clear operational leverage of our business model. Our Q4 adjusted EBITDA of $12 million is also ahead of guidance, and it brings our full-year adjusted EBITDA to $53 million, representing nearly 3.5 times growth over 800 basis points of margin expansion compared to 2022.
Importantly, this led to $11 million of positive free cash flow in the second half of 2023 as we have guided to throughout the year. This marks a meaningful inflection point for the business as we expect to maintain positive cash flow on an annual basis in 2024.
There are several growth drivers that contributed to our outperformance in 2023 and the same dynamics will continue in 2024. Therefore, we expect to grow our 2024 revenue by at least 16% to $480 million and our adjusted EBITDA by at least 41% to $75 million. We expect these near-term growth dynamics to persist over the long term as well. And with each passing year, we grow more confidence in our long-term strategic and financial goals.
Our lead partnerships going from strength to strength as we expand our suite of technology solutions in pairing new forms of fan engagement and monetization. This ultimately gives us confidence in not only retaining but also expanding our technology delivering relationships over time. A few notable examples from this year are the extensions of our NFL and [Circle data co] partnerships.
Most recently, we also announced a 10-year strategic partnership with FIBA, where we plan to deliver our computer vision technology and AI powered capabilities across the 200-plus national federations worldwide, covering tens of thousands of global basketball events per year.
With our scale and best-in-class technology suite, we have a diverse number of channels to monetize our different league relationships. This includes opportunities unlocked with broadcasters, content distributors, sponsors, advertising, and of course, sportsbook customers. Across both the customers, the same technology creates new value enhancing products to better engage their audiences and drive more betting activity. That vision is a great example of this, which we will cover shortly.
Each of these different touch points solidifies our position of half the digital sports ecosystem and more importantly, translates to sustainable improvement in the financial metrics that we are most focused on. This includes consistent revenue growth, disciplined cost control, margin expansion, and free cash flow generation. Given the multitude of growth drivers and high visibility of our cost base, we are more confident than ever in achieving our long-term EBITDA margin target in excess of 30%.
Now let's review how some of these fundamentals performed in the quarter. We'll start with positive trends we've seen in the US sports betting market through the full NFL regular season. As a reminder, our revenue share agreements with US sportsbook operators enable us to benefit from multiple growth drivers, including broader market expansion, improvements in operating wind margins, and higher in-play betting, where we own three times higher revenue share relative to pre-match betting.
In our third NFL season, each one of these variables have fueled growth in our overall betting revenues and in the US where we expect significant growth over time. The diverse multitude of growth drivers helped us exceed expectations in the quarter, which is a proof point of our rock solid business model, which insulates us from unfavorable sports outcomes that you may have heard about from our customers.
First, we continue to see impressive growth in the total US sports betting GGR, which increased by approximately 50% in 2023. This has come in the form of new state launches as well as continued growth in existing states. It is worth calling out, Genius is market share agnostic, meaning as long as the market grows, we will grow with it, regardless of which operator ultimately winds.
For instance, in Florida where Hard Rock is the only operator at the moment. We realize immediate revenue uplift off the back of their online sports betting relaunch in the quarter.
For the NFL more specifically, it has been another spectacular year across the board and particularly on the betting front with in-play handle and GGR increasing by 60% and 140% year on year, respectively. I mean improvement in play wind margins compared to our first NFL season in 2021. We have always said that in-play betting would naturally increase at the market matures, and we are beginning to see that now.
We also believed it would be a product-led evolution and our introduction of bet vision this season is now a proof point of highly engaging product that activates more in-play betting on NFL games.
Last quarter, when we first launched that vision, we discussed how this project simplifies and enhances the discoverability of in-play betting. That vision brings together many of geniuses best tech assets, logos, players and team stats and the next-gen augmentation to name a few to deliver a differentiated in-play betting experience. And we expect that this will be critical for sportsbook to attract and engage a valuable sticky customer base.
We also provided some early data points to portray how it helps sportsbooks increase that in-play betting volume. It was a small sample size then. But now, with a full season behind us, we're happy to say those numbers held up consistently throughout the end of the season. To summarize, 50% of the total number of bets made by bet vision streamers were in-play bets.
For the total betting handle or dollar volume that from bet vision streamers, 76% was from in-play betting. And when comparing the first half of the season to the second half, we've also seen total betting handle and in-play betting has tripled over that time. We are very happy with the early success of this product and the value we've created for our sportsbook partners and the NFL. But what excites us most is the innovation roadmaps still ahead and the opportunity to develop new features for the NFL and expand this product to even more sports.
We have created the platform that now general millions of eyeballs, which presents a vast opportunity to monetize in many different ways. As the world of sports betting media and broadcast are rapidly converging, we are providing key solutions to keep our partners at the forefront of this trend. We expect to launch even more features to the bet vision product and create a fully personalized and interactive experience. So stay tuned for much more to come.
Bet vision is just one of the many initiatives that we have delivered on to empower our sportsbook customers to succeed. As such, we view ourselves as its true value add partners sportsbooks, providing more tools to help them win and grow their businesses. Consequently, our business model positions us to grow alongside our customers. And now this has been steady net revenue retention over the last few years.
On slide 8, you'll find updated net revenue retention metrics, which highlights a successful track record of increasing customer value over time. It's important to remember that there are multiple inputs contributing to growth with each customer. For example, when we have revenue share agreements predominantly in high-growth markets outside the US, the values of naturally increased based on a handful of factors include a large in TAM, high in-play betting and improving win margins. Our growth has also turned in the form of new product offerings like bet vision or digital advertising services, for example, or simply just offering a wide range of content from our rights portfolio.
We aim to provide differentiated tools and content to help our sportsbook partners grow over time. Our commercial arrangements then enable us to share in that growth. We have a long history of partnering with hundreds of sportsbooks in this fashion, and we expect to continued success over time.
In the context of our frequent ongoing contract renewals and new renegotiations, you should view these as opportunities for us to provide new value added products and services to help sportsbook enhance their offering to customers. This is exactly how we have achieved our strong net revenue retention historically and how we expect to sustain that success going forward.
Importantly, many of these growth drivers I mentioned have resulted in immediate revenue benefit with little or no incremental cost, which is exactly how we've been able to improve our profitability and cash flow profile in 2023. Equally, the same dynamics that supported our financial success in 2023 will continue to drive profitability growth in 2024, particularly as we continue developing innovative products and have many opportunities to bring into the market.
With that, I'll now pass the call to Nick to discuss the financial results and initial 2024 guidance in more detail.

Nick Taylor

Thank you, Mark. You already hit the headlines, Mark, but it's worth reiterating the consistency at the results throughout the year.
Each quarter this year, we had exceeded expectations and raised our full-year outlook. For Q4, we reported a $127 million of revenue, which was above our initial guidance of $124 million and our updated guidance of $126 million. This was also at an adjusted EBITDA basis as well as we realize high incremental flow through from our revenue growth. We reported nearly 4.5 times growth in adjusted EBITDA, $12 million in Q4, also beating our guidance of $11 million.
Throughout the year, you've also heard us reiterate our expectation for positive free cash flow in H2 of 2023, and we're happy to report that we have achieved this very important milestone after generating $11 million of cash in H2.
In addition to the revenue and EBITDA growth, it's also worth drawing your attention to the consistent margin expansion throughout the year. Not only have we exceeded our revenue and EBITDA targets through the year, we've also expanded our adjusted EBITDA margins by at least 600 basis points in each quarter as illustrated on slide 11.
This is true on the gross margin basis as well. In each quarter, our gross margins have materially improved year on year. For the full year 2023, our gross margins increased by nearly 1,600 basis points. This is driven by stable and highly visible cost structure that can support significantly higher revenues. We have a long discuss the operating leverage as the business, which has now been demonstrated across the full year 2023.
2023 marks an important inflection point for the financial model. And fundamentally, these dynamics will not change in 2024, so we expect to continue this momentum. For 2024, we expect to generate good revenue of $480 million, representing 16% growth as we expect to benefit from the same building blocks that supported revenue in 2020 through a continued growth in the TAM with new jurisdictions such as Florida, North Carolina, and potentially Brazil, representing entirely new revenue opportunities in 2024.
Additionally, as you've heard Mark discussed, we continue to see encouraging growth in in-play betting, which can potentially be accelerated by new insight products like bet vision, as an example. With a long track record of using contract renewals as opportunities to provide more value to our customers based on their needs. Whether in the form of additional content, expanded services, new products, increased advertising spend, and more, we're excited about what they can mean for the growth of Genius as well as our customers.
And of course, we're always winning new customers. These can be sportsbooks who require our official data; advertisers who buy our major and fan engagement products; or broadcasters, buying our augmentation solutions. Again, each of these building blocks come with little or no incremental cost. So expect much of this revenue growth to contribute to our group adjusted EBITDA.
For 2024, we expect group adjusted EBITDA of $75 million, representing 41% growth and a 16% margin. That said, I want to be absolutely clear about the pacing of our EBITDA profitability over the course of the year. As there's a bit of seasonality worth noting. As we've discussed in the past, our rights fees are fixed with predictable increases in each year. And the magnitude of those increases have slightly higher in '24 compared to 2023.
Additionally, as part of our expanded NFL partnership , there was a modestly higher rights fees associated with the domestic live video streams. We used to power that bet vision product. To be clear, bet vision has been accretive in the business across the full NFL season, predominantly driven by our Q4 results. As we recognized three full months of NFL.
However, given the fact that there were simply fewer NFL games in Q1 compared to Q4, the incremental flow through to EBITDA won't be as meaningful as it was in Q4. As a result, we expect Q1 group revenue of approximately $117 million and EBITDA of $6 million.
As you can see on slide 14, we expect year-on-year EBITDA growth and margin expansion to accelerate in each quarter for the remainder of the year as many of those key tailwinds and growth drivers I mentioned are recognized in the second half. Therefore, we are highly confident in achieving our full-year targets.
And finally, we expect our EBITDA to convert to free cash flow across the full year 2024. To be clear, that may be some fluctuations in net working capital and other one-off cash outlays in the first half. And as a result, we expect our Q1 closing cash balance to be approximately $100 million. At 2023, we anticipate positive cash flow again in the second half of 2024, which should result in a net positive cash position for the entirety of 2024.
Lastly, I spent a bit of time discussing the stability of our cost base. And since then highly predictable in any given year, it is worth taking a moment to review the approximate shape of our cash operating expenses for 2024. As a reminder, our cost base is relatively fixed. And we don't expect to materially increase in order to achieve higher revenues of adjusted EBITDA this year.
For example, all else being equal, our rights fees and related direct costs are in line to deviate from our estimates, whether we're selling to 100 sportsbooks over 1,000 sportsbooks. Equally, all other total operating expenses for the cost of revenue as presented on a non-GAAP basis on slide 19 have remained relatively steady over the last year. even as we significantly increased revenue in that time. We expect this will be the case in 2024 as well.
To conclude, we feel a great sense of excitement entering 2024 with multiple ways to win. We've established a highly defensible competitive position through deployment of cutting edge technology. We strengthened our targets with leagues and federations across the globe. We've launched exciting new products to empower our partners to better engage their customers. And as a result, our business is poised to benefit from multiple growth drivers, which we expect will drive continued revenue growth, margin expansion, and cash flow generation in 2024.
With that, we now conclude our prepared remarks and then open the line to Q&A.

Question and Answer Session

Operator

(Operator Instructions) Ryan Sigdahl Craig-Hallum Capital Group.

Ryan Sigdahl

Hey, good morning, guys. I want to start with that vision, so appreciate the metrics on slide 7. I'm curious what you can say on plans to launch a similar product across other sports and how difficult from a technological standpoint that is on efficiently, you can do that. And then what is the biggest challenge you're getting from the demand for kind of original sportsbooks you have on that platform mechanically others faster?

Mark Locke

Hey, Ron, it marked. Yeah. I mean, obviously, the plan was always to build a scalable platform that was about us and the focus of what we what we did when we started this and rolling out other sources is a clear focus for us. Technically, the integration and the development of that is fairly straightforward, and we would expect to see a number of those scores rolling over the next 12 months.
In terms of the additional sportsbooks. I think one of the sort of challenges they have is the speed of integration. And I think there's a bit of a backlog in some of the integration pipeline. So what we've been doing is working with the sportsbooks proved the concept of thing. We undoubtedly done that. It's very clear strong product. And there's a lot of proof how they are all done. So andthis is the case of working with our partners to manage their integration pipelines and get these sportsbooks live with the new products.

Ryan Sigdahl

That's great. Thanks, Mark. Nick, one for you. When I look at the quarterly guidance cadence for this year, Q4 is going to be the highest and highest ever quarter, up triple digits . So there is ongoing concern with some, but the NFL contract is on economical and will never be profitable for you guys. I guess that seems to contradict me doctors takes talk through the NFL and just maybe respond to that risk. Thanks.

Nick Taylor

Hey, Ryan. And I guess I'll just point everyone to our US performance over the last two years since we won the NFL really run. If you go back end of 2021, I think we were EBITDA loss making at that point 2022, we delivered a margin of 5%. This year, I think we're in 13% our EBITDA margin in 2023. And I have guided to about 16% margin in 2024. And you're right, you can see that margin expansion, not just in the quarter. We just reported. But the quarter we're forecasting for Q4. So I guess one to counter that argument, I will just point out what we've already delivered on what we thought into and we intend to deliver in 2024.

Ryan Sigdahl

Beautiful. Maybe just quick follow-up, is that a full cash contract assumed in Q4? Thanks. Good luck, guys.

Nick Taylor

Yeah, Ryan. That's exactly right. As you know, there were some warrants in the out years in the original contracts. And as part of our contract extension that we did midyear '23, we exchanged that for full cash. That's all baked into those numbers.

Operator

Bernie McTernan, Needham & Company.

Bernie McTernan

Great. Thanks. A lot of questions to start. Maybe just a follow-up on bet vision. It was a minority of betting operators that access to bet vision during the '23 NFL season. What do you think the revenue uplift will be given other detail you provided on slide 7, if bet vision was rolled out to all US sportsbook operators for next NFL season?

Mark Locke

Yeah. I mean, I think I think and maybe a minority in terms of numbers, but probably not in terms of market share, we've now heard some good success with the rollout, including FanDuel. I think when we think about bet vision, it's really about the way that the revenues and the profit from that compounds. So obviously, we're taking has as you know well, we're taking pre-match advertising and the lion's share of roughly three times, two times the amount. And the fact that bet vision is really focusing people on a lot of the in-play. It's a lot of a lot of that live betting on really helps that three times multiple that we're getting on the in-play come through on top of the fact that the in-play is growing rapidly.

Bernie McTernan

Got it. Thanks, Mark. And then our media technology revenue has been swinging around a lot. It's we're fine-tuning our models for '24. Should we be thinking about this more like a 10% grow or 20% grow or just kind of any puts and takes we should be contemplating as we think about '24.

Nick Taylor

I'll let you know, the media can be just a question of timing of spend. We saw that in Q4 where some of the sportsbook save some of that spend over the Christmas NFL games and spent in the in the playoff games instead in Q1, as you know, with the quarterly cadence thatcan bear that in a couple of million dollar swing one way or the other. I think the way we're forecasting '24 at the moment is we're not giving specific guidance, but we're thinking about around about 15% growth year on year until 2024. And then you had suggested being conservative in that area. But as we stand here today, there's still lots of things to happen in '24 just to make that case.

Operator

Jed Kelly, Oppenheimer.

Jed Kelly

Hey, great. Thanks for taking my questions. Just two, if I may. On the go into the slide, it looks like the data right cost I think are like $195 million. It looks like they're growing. I know you will have a maybe like 30%, so slightly faster than revenue. Can you talk about what's going on? And then the bigger question for you, Mark, we're seeing a lot of technology innovation around streaming, particularly would like the Apple headset, YouTube TV, where is Genius in your technology fit and what's going on in the streaming landscape? Thanks.

Nick Taylor

Thanks, Jed. I'll pass the baton to Mark to the second part. So look, I guess the dosing schedule is, look, we're delighted with the drop through to what I've experienced in 2022. I think it's when it went up 53%. And you can see on a cash basis, we've talked you've heard us talk the operating leverage a lot. And you can see that that's really, really motoring over the course of the last 36 months.
When you look at '23 to '24 and now part, right to second, and I'll come back to that. You can see that the cost base remains pretty flat year on year. I think it's something like $208 million to $210 million . So again, that operating leverage is coming through the business clearly. And to be cleared yet, that's something that should continue to be the case beyond 2024 as well.
Now specifically on right, let's remember, I guess, first of all, rights are fixed, and we have great visibility, but I guess to note, they're not linear that. And there is a -- sometimes lumpy over the life cycle. And you're right, there's a slightly higher step-up in right from '23 to '24 then that was in at '22, '23, hence, why we were estimating I talked to in our guidance around about 33%.
But to be clear that we are still delivering an EBITDA margin expansion in '24 to run about 16%. They will be lumpy, I think a sustainable position and total beyond 2025 is probably somewhere between the drop throughs of '23 where we are estimating for '24. And that EBITDA margin expansion will expect to see continue beyond '24.

Mark Locke

In terms of your second question, I mean, this is super exciting is on these developments that are coming through, including the future is where we have really been investing. Investing sort of ahead of the curve over the years. And in a lot of the work that we've done, a second spectrum positions us really, really well.
This is part of it guided digitization of the sports ecosystem, which again, is exactly where we play. It brings it on media business very strongly and gives us really further output score for sports. And another way for the fans engage.
So some stuff that you should probably be thinking about, the content rights is still a big part of what's required to get there stuff. So that is still a fair bit of work to be done in terms of the way that I think Apple, it is going to be displaying sports and cautious -- caution you a little bit on on getting too excited about and sort of revenue flow throughs at this stage. This is really about and positioning ourselves well.
Having a partnership with people like Apple in what we did in the Apple sports app as well as providing them with a lot of the data. I think it puts us in a strong position. So when this stuff becomes more mainstream, when the data rights market and they're sort of distribution of this becomes a bit more widely features.

Operator

Jordan Bender, Citizens GMP.

Jordan Bender

Good morning, everyone. I want to follow up on Jed's question. So the incremental margins dropping from 53% into the mid 30s for '24, is that all related to the rights increase or is there any more investment in the business that you guys are kind of stepping back investing in '24?

Nick Taylor

In the business outside of those rights costs and ahead of us know, I mean, it's I think that we gave a slide specifically in the deck on a cash basis, looking at the cost base. And if you look at that year on year, you can see I think if you include everything outside of right, I think our cost base goes from $208 million, $210 million a year on year is it indeed is broadly in line with it. If you want to look go back to 2022 as well.
So you've got very little incremental cost in the business, driving those additional revenues. As I say, the right position on is driving that. We're going from, I think, [$154 million or $290 million odd] that we've guided to. And that's just us that's a function really of the rights aren't linear. And there are lumpy years, it was a less big jump from '22 to '23. It's slightly bigger, jump to '23 to '24, and we'll be sure to guide when we get beyond 2024 and in the years that allows a slightly more, slightly less than than the mean.

Jordan Bender

Understood. And then in play in your slides, it says in play represented over 20% GGR, which tie that back to the outlook or the guidance that you gave at your Investor Day back in '22 would represent a significant improvement over those projected levels. I know there's no crystal ball, but is it fair to assume that the shift to any play is accelerating faster than just driven by the product rollout?
And I guess the second part of that question, Mark, you kind of alluded to in the prepared remarks, does that help you had ongoing price negotiations?

Mark Locke

Sure. Yeah. I mean, look, I think I'm cautiously optimistic about this and and we are seeing good growth. I mean, again, if you look at the sort of bet vision numbers and the proportion of in-play betting, it's really being product driven. And I think that's a that's a really good good thing for us and puts us in every strong place.
I think the other thing it's worth just having in mind when you're considering these things, is we've seen for improvement in margin as well. You've obviously -- one of the things we've always been very focused on and very excited about what's in place that materially better margin, we should do it anyway. And we are seeing that come through as well.
So again, I talk a lot about this compounding effect of the shift to imply the increase in margin. And again, the addition of new product like that vision already sort of in a pushing and pushing things in our favor.
In terms of contracting for and renegotiations, look, we as the business have built this over being good partners to our sportsbooks and it's something we take very seriously. And when we think about our contract renegotiation, obviously we want everybody to be successful. And therefore, the way we help our bookmaker part is the success of the new product launches such as bet vision, such as Edge, which is increasing margins, even though that products very, very young. And it puts us in a place to be in a deeper integrated with our bookmakers engine-related to do a better job. And I hope you share from the upside in the industry.
So I think yes, all of these things to pull on the business and the investment strategy we've had over the time. And we feel, as I said, cautiously optimistic.

Operator

Chad Beynon, Macquarie.

Chad Beynon

Morning, Mark. Next team. Thanks for taking my question. For '24, wanted to ask about the guide, particularly the sports betting guide uptake. Nick, you said for '23, North American GGR rose 50% for the market. You obviously benefited from from Acumen given the NFL contract, I think for '24 were all expecting North American GGR to be up well into the 10s or 20s. But how are you thinking about that non-NFL piece of the bedding market? Can that continue to grow? Let's call it, high singles, low doubles outside of the US? Thanks.

Nick Taylor

Hey, Chad. It's Nick. Since really strong growth, as you can see in our numbers this year, we've commented quite a lot of it, I think in our Q3 and Q4 as well, slow down a little bit in Q4. In Europe because it's comping against a much bigger Q4 in 2022. I mean, the way we're looking at it is broadly, I'd say that we're expecting our US business probably got around about 20% year on year and our European business to be growing at around about 15%.
So still very healthy growth coming from Europe.

Mark Locke

And I think the sort of macro -- sorry to jump in. One of the macros in Europe is quite interesting at the moment. I mean, there's -- even though -- the growth is sort of, I guess, less aggressive than in the States. You still seeing positive signs in Belgium in coming online and legalizing betting in a big load ' 21 is a good sign. And I think that some of this still a lot of potential left and left in the market.

Chad Beynon

Great. Thank you. And then as you look at additional technology kind of tuck-ins or bolt-ons, what are you seeing in the public private valuation spread? Are there still opportunities to kind of add on to second spectrum, that vision, et cetera, just kind of overall cash in the market, what you're saying?

Mark Locke

Great question. As the business has moved to the cash flow positive and we continue to execute. Obviously, our mind is have much -- we're much more focused on potential and growth through acquisition. And one of the challenges we have, we sort of have a ton of technology and then we've got when we say inspections on the other acquisitions as well as our own internal development. We've got an awful lot of stuff that we need.
So we're not seeing any sort of screening gap that are in our technology stack. So when we look to the M&A market, you've got to be quite compelling on a few fronts is going to be competitive on the basis that the technology is really required and we can deploy it well and generate real profitability from it.
We got to have a bit of a focus on the level of distraction and stuff and ultimately that the price that this technology companies are going forward. We're seeing -- we feel very strong. We feel like we're in a really good place and we're seeing, I think, other parts of the market. I think a bit of opportunity, maybe there's a bit of a few key areas that are struggling.
But unless the prices of these is really compelling, combined with the technology and other offerings, it is a harder deals justified.

Operator

Robin Farley, UBS.

Robin Farley

Great, thank you. Your in-play is growing at a very high rate and your NFL GGR, I'm curious to think we only see that the total GGR growth for you. I'm just wondering if you could break out the in-play as a percent of total NFL GGR. I see that just over 20%. I'm thinking about this period versus last year to see the change in kind of shares GGR and that's coming from in-play. Thanks.

Mark Locke

Hey, Robin. It's Nick. The proportions around about 20% of NFL bets were implied. And yet the GGR up for the year and in-play, I think was up 140%. And the margins and margins were up '23 compared to 2022 as well.

Robin Farley

To the shares, NFL GGR coming from in-play grow year over year, is it pretty much sort of in line with the growth of GGR overall for the NFL?

Mark Locke

Yeah. think the implied GGR outgrew the other backing on GGR and NFL. And therefore, inevitably the mix will have will have shifted towards in play position.

Robin Farley

Thanks. And then if you could just clarify how much on FX movements since Q3 added to that your Q4 revenue? Thanks.

Mark Locke

Actually foreign exchange was a slight headwind, not a tailwind in Q4. i think we guided in Q3 were $1.25. And I think the average rate for 20 -- for Q4 was around $1.24, [$1.245]. So round about $300,000 to $400,000 headwind, not a tailwind for Q4.

Operator

Eric Martinuzzi, Lake Street Capital Markets.

Eric Martinuzzi

Yes. I wanted to talk about some of the emerging opportunities. So what's your take as far as election year 2024 with any new states that you could potentially kind of greenlight the sports betting?

Mark Locke

Yeah. We take take a market view in terms of new states coming on board. And we take an average of that. And therefore, we're not particularly the horizontal requiring one particular state. As we say, North Carolina opens up it's next week. I think. That's obviously baked into our numbers. Florida, we continue to be cautious with their that's baked into 2020 for that continues.
And also to be clear, we're also looking at comes on a global basis. And Brazil is something I think we mentioned in the prepared remarks, and that's a really interesting opportunity. We're being very cautious given the fact it's Brazil, and that's not always the most straightforward to place to do business. But we're expecting, at the moment, that to be like from broadly around the sort of September time onwards.

Eric Martinuzzi

And that is -- what's the size of that opportunity of a Brazilian markets just maybe in comparison to the US market percentage of scale?

Mark Locke

Yes. I mean, the great thing about Brazil. I mean, I'll give you the exact numbers. We think it's going to be around about a $2 billion opportunity in 2024. We look for Genius, it's not significantly immaterial to us given the fact that they will only be probably included our numbers in really in anything meaningful in Q4.
But it's also worth just meant in Brazil is a really interesting opportunity for us because it really plays into our natural business model in terms of having additional revenues without any really significant additional costs that go with it, given the fact that the events that we have also relevant for the sportsbooks bettors in Brazil, the likelihood is that a lot of the customers that we got in Brazil sportsbooks will be already customers that we have on a global basis.
That's a classic example of that operating leverage that we talked about earlier in the cold.
The other thing is also worth noting, as well as the NFL pretty focused on Brazil, that your business because of September NFL game. And I think I think they're all in on that. So I think there's quite a big focus on that market, which required prevailed cautiously excited about it.

Operator

Mike Hickey, The Benchmark Company.

Mike Hickey

And Mark, Nick, Brian, and Charles, congrats on '23, guys. Thanks for taking our questions. Just on bet vision product, just looking at the US market, obviously, shares tenant consolidated across two primary operators here. And it seems like from an innovation standpoint on product in play is getting a lot of heat. And of course, that vision fits perfectly there. So just curious as you sort of think about scaling the product, if you thought about selling it exclusive versus selling it across multiple operators?
And then the second question is a follow up on the M&A. I think the question was directed more towards a potential add-ons on tech. But obviously, I think there's at least one asset that openly for sale that would be more than a addition to your core business and so more transformative. So just curious on your appetite for a deal like that versus just sort of tech and ops. Thanks, guys.

Mark Locke

A bike act and so on the sort of exclusive or non-exclusive, I mean, our model is to work with our partners. We we've got to remember that one of our core focus is to distribute sports products as widely as we possibly can. We looked at yet about engagement, and we're looking to really sort of drive drive the growth of the store.
So from an exclusive or non-exclusive point of view, that that's not something we really consider where we're not going to be doing that. I mean, M&A opportunity, I think I said that the tech is something that we feel pretty comfortable. We're in a good place on. And we'll obviously look at opportune entities as and when they come up. But we're pretty price sensitive. We're pretty price sensitive when we come to buy rights. We're pretty price sensitive when it comes to buying other companies.
So if it makes sense, if we have to make those sort of acquisitions, whether right or whether company. That have been a profitable way, we'll do that. But some data that they've really got to make sense on that sort of basis.

Operator

Brett Knoblauch, Cantor Fitzgerald.

Brett Knoblauch

Thanks for taking my question and congrats on the quarter. I'm just curious, as you're thinking about 2024, I'm looking at 2023, we've seen when rates do very well, particularly for the NFL. But I guess what is factored in your guidance in terms of win rates for this year? Do you guys assume that entity remain constant or we see some marginal uplift we have in place increasing percentage of total handle? Thank you.

Nick Taylor

Yeah, I would just say it's worth just remembering that US is around about 30% of our revenues and therefore, specific win rates on particular month, so either up or down, although they do have an impact on on always material impact continuous this position. But on the specific a question we've forecasted and built in a win rate that's pretty consistent from '24 to '23.

Mark Locke

I mean, is actually is actually quite interesting. If you think about if you think about the win rates have been one of the things we've been quite focused on as a business. And one of the things I guess we think a lot about is making sure that we have stability in our numbers to do that regardless of the win rates are near. The Super Bowl is a good example of that.
And it was I think ultimately that industry-wide, I guess it was a little bit challenging. But as you can see from our numbers expected, I think that shows the underlying business model that we've got in a way that we we make money and the way that we partner with our with our with our clients in a really good light.

Operator

We have no more further questions in our queue at this time. And with that, that does conclude today's conference call. Thank you for your participation, and you may now disconnect.