What happened

Shares of sports-betting technology company Sportradar (SRAD -0.45%) soared on Wednesday after its financial results for the second quarter of 2022 beat analysts' expectations. The company also raised its guidance, which excited the market. As of 10 a.m. ET, Sportradar stock was up 16%.

So what

Sportradar partners with sports leagues, media companies, and sport-betting companies around the world to distribute data and provide analytics. In Q2, the Switzerland-based company generated revenue of 177 million euros, up 23% year over year and ahead of Wall Street's estimates.

Of particular strength was Sportradar's U.S. operations. Revenue in the U.S. was up an impressive 66% year over year compared to just 15% growth for the rest of the world. This outsized growth was due to the ongoing legalization of sports betting in the U.S.

While U.S. results were particularly good, this segment only represented 16% of Sportradar's total revenue. So it's important to keep that in context. However, the company's performance in Q2 understandably encouraged investors.

Now what

Two things are worth noting here for Sportradar. First, it generated free cash flow (FCF) of nearly 36 million euros in Q2 and had over 700 million euros on the balance sheet at the end of the quarter. Management subsequently decided it was best to use this strong financial position to pay down some debt -- it paid off 200 million euros in July, which was nearly half of its outstanding debt. In my opinion, this is a smart long-term move.

Second, Sportradar raised its revenue guidance for 2022. Previously it guided for revenue of 700 million euros at best. Now, it's guiding for full-year revenue of 695 million euros to 715 million euros. The low end of this guidance implies 24% growth compared to 2021 -- strong numbers for an under-the-radar company. And to me, its growth rate demonstrates its importance in the growing sports betting industry.