DraftKings Inc (NASDAQ: DKNG) blamed higher cost of revenue as it reported widened loss and lower-than-expected revenue for its fiscal third quarter on Friday. Shares opened 5.0% down but recovered entirely in a few hours.
Highlights from CEO Robins’ interview on CNBC’s ‘Squawk on the Street’
DraftKings spent 49.3% more on marketing that also weighed on Q3 results, but CEO Jason Robins said it made sense. On CNBC’s “Squawk on the Streetâ€, he added:
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In the long run, Robins confirmed, he wants to expand the product line and turn DraftKings into a global tech company that’s “in the same conversation with companies like Amazonâ€. The U.S. firm was in pursuit of buying Entain plc to expand its global footprint but recently withdrew from the $22 billion deal.
Key takeaways from DraftKings’ quarterly earnings report
DraftKings said it lost $545 million ($1.35 per share) in Q3 versus the year-ago figure of $395.7 million ($1.11 per share). It generated $212.82 million in revenue; a year-over-year growth of 60.2%.
According to FactSet, experts had forecast a per-share loss of $1.09 on a higher $236.9 million in revenue.
Cost of revenue was up 76.8%. DraftKings also spent 49.3% more on marketing that further weighed on Q3 results. Other notable figures include a 31% increase in monthly unique payers (MUPs) and a 38% climb in the average revenue per MUP.
For fiscal 2021, DraftKings revised its revenue guidance from $1.21 billion to $1.29 billion, to $1.24 billion to $1.28 billion, as per the earnings press release. In comparison, analysts are calling for $1.29 billion in full-year revenue.
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