4 key takeaways from DraftKings Q1 earnings report

DraftKings Inc. (NASDAQ: DKNG) said on Friday its revenue posted a close to 200% growth in the fiscal first quarter. The company, however, reported a wider than expected loss in Q1 that more than quadrupled on a year over year basis.  

1. Financial performance

DraftKings noted £247.62 million of net loss in the first quarter versus the year-ago figure of a significantly lower £58.71 million. The Los Angeles-based firm valued its revenue at £223.31 million in Q1 that represents an annualised increase of 252.65.

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According to FactSet, experts had forecast the company to post £168.90 million of revenue in the recent quarter and £143.08 million of net loss. In the prior quarter (Q4), DraftKings had registered £190 million of net loss.

2. Monthly unique payers

DraftKings reported a 114% increase in its MUPs (monthly unique payers) in the first quarter. The sports betting operator engaged 1.5 million MUPs each month on average. At £43.62, revenue per monthly unique payers on average jumped 48% in Q1. DraftKings’s cost of sales and marketing came in 299.3% higher in the recent quarter.

3. Guidance for the full financial year

For fiscal 2021, DraftKings raised its guidance for revenue on Friday to £750 million to £820 million. In its previous guidance, it had predicted up to £720 million of revenue this year. The new guidance translates to a 63% to 79% growth on a year over year basis.

4. CEO Jason Robins’ remarks on CNBC’s “TechCheck”

Commenting on the legalisation of gambling and the associated tax revenue, CEO Jason Robins said on CNBC’s “TechCheck”:

“I think we’re still very early on. A lot of what we hope to do in terms of generating tax revenue will be over many, many years. At this stage, we’re in the growth phase of the industry. New states are opening up, multiple every year. We launched two last quarter and started to take global registration, which opened up the market, resulting in more registrations in almost five days in January than the previous 12 months. In Iowa, lots of exciting things are happening. Our longest tenured state, New Jersey, had a strong growth year over year. Everything seems to be really in a huge momentum phase right now. I think we’re going to have a lot of great years ahead of us.”

Impact on the share price

DraftKings opened at £38.22 per share on Friday and closed the regular session at a lower £34.62 per share. The stock is currently about 8% up year-to-date. At the time of writing, DraftKings is valued at £13.77 billion.