DraftKings Roll Continues After Strong Q3 Report, Increase in Users
- DraftKings claimed a robust Q3 report with strong earnings & additional customers
- CEO Jason Robins announced resumption of US major four sports leagues a huge plus
- Several new partnerships were added including Turner Sports, ESPN, & Michael Jordan
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As optimistically expected, shares of leading sports wagering company DraftKings Sportsbook jumped more than 9% in premarket trading Friday after the company reported better-than-expected third-quarter results and a noticeable surge in users.
The following are a synopsis of the results and corporate highlights:
- Loss per share: 57 cents, vs 61 cents expected, according to a Refinitiv survey of analysts
- Revenue: $133 million, vs $132 million expected, according to Refinitiv
- DraftKings’ Q3 2020 pro forma revenue indicated a 42% increase YoY. They completed a business combination with Diamond Eagle and SBTech on April 23rd and reported results on a combined company Pro-forma basis to improve comparability vs. January 1, 2019
- On average, more than 1 million monthly unique paying customers engaged with DraftKings each month during Q3, reflecting a 64% increase YoY. It was fueled by the continued growth of core DFS business spurred by continued innovation, strong engagement from existing sports betting and iGaming customers plus expansion into new states.
- Following the recent launch in Tennessee, DraftKings is now live with mobile sports betting in 10 states, leading the sports wagering industry. Combined these states represent 20% of the US population. Take a look at DraftKings bonuses in Tennessee.
- DK has increased its FY2020 pro forma revenue guidance from a range of $500 to $540 million to a range of $540 to $560 million. That equates to YoY pro forma revenue growth of 25% to 30% in 2020, despite COVID-19’s impact on the major sports calendar.
- DraftKings has plans to introduce FY2021 revenue guidance of $750 million to $850 million, equating to 45% YoY growth based on the mid-point of the Company’s 2020 pro forma revenue guidance range and the Company’s 2021 revenue guidance range.
“The resumption of major sports such as the NBA, MLB and the NHL in the third quarter, as well as the start of the NFL season, generated tremendous customer engagement,” DraftKings CEO Jason Robins said in a press release.
DraftKings Sportsbook spent millions last quarter on its partnerships, including with Michael Jordan in an equity deal, the New York Giants, Chicago Cubs, and ESPN.
The company had been looking to increase its brand exposure as it fought to gain market share in the expanding sports betting landscape. Currently, 19 states, plus Washington DC allow online sports betting. Six US states have legalized sports wagering but are not yet operational, while two states are working on legislation to allow betting.
Last month DraftKings signed a deal to integrate its content with AT&T’s (T) Turner Sports platforms. The agreement made DraftKings the exclusive sportsbook and daily fantasy sports provider across select Turner Sports and Bleacher Report properties.
Look for DraftKings Sportsbook to continue their aggressive posture of making deals with major media companies, US sports teams, and software companies in 2021, retaining their position among the leaders in the sports wagering industry.
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Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
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