- DraftKings rallied as much as 11.1% in early Friday trading after the company beat third-quarter estimates and reported a leap in monthly users.
- Revenue and earnings for the three-month period landed above analyst expectations, and the company lifted its 2020 and 2021 revenue guidance.
- Monthly payers jumped 64% from the year-ago period and surpassed 1 million, according to the report.
- Resumption of major sports leagues and the start of the regular NFL season “generated tremendous customer engagement,” CEO Jason Robins said in a statement.
- Watch DraftKings trade live here.
DraftKings leaped as much as 11% in early Friday trading after the sports-betting platform beat third-quarter expectations and posted a jump in monthly users.
The company expects all major sports calendars will stay intact throughout the year and continue to drive more betting activity to its service. Against that backdrop, the company lifted its 2020 and 2021 revenue forecasts, helping Friday’s rally.
Still, soaring COVID-19 case counts across the country already prompted the cancelation of some college football games and could cut into the improved guidance. DraftKings’ stock has become a virtual proxy for re-openings, and has fluctuated wildly with any announcement of sports schedule changes due to the pandemic.
Here are the key numbers:
- Revenue: $US133 million, versus the $US131.7 million estimate from analysts surveyed by Bloomberg
- Loss per share: 57 cents, versus the 61 cent estimate
- 2020 revenue guidance: $US540 million to $US560 million, versus the $US526.8 million estimate
- 2021 revenue guidance: $US750 million to $US850 million, versus the $US775.9 million estimate
DraftKings also reported a 64% year-over-year increase in monthly payers. More than 1 million unique users flocked to the platform each month of the third quarter. Average revenue per monthly user was $US34 due to limited sports activity in July, the company said.
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“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,” Jason Robins, DraftKings’ co-founder and CEO, said in the quarterly report.
The company’s guidance also hinges on its continued operation in states where it’s already active. Forecasts stand to improve if additional states legalise sports gambling and widen the company’s total addressable market. At the moment, 19 states and Washington, D.C. allow online sports gambling.
If DraftKings does expand to new states, it will do so with far more partnerships than it had in the previous quarter. The company inked deals with ESPN, the New York Giants, and the Chicago Cubs over the three-month period covered in Friday’s report.
DraftKings shares leaped higher in early September after Michael Jordan took an equity stake in the company. The basketball superstar will provide “guidance and strategic advice” to the company’s board, according to a press release.
The company’s stock closed at $US41.25 per share on Thursday. DraftKings has 21 “buy” ratings and five “hold” ratings from analysts, with a median price target of $US46.
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