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DraftKings (DKNG) reported mixed results in the third quarter on Friday, as the online sportsbook company sees more states legalize gambling. DKNG action jumped on solid forecasts.
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DraftKings Revenue Report
Estimates: Analysts expected a loss of 63 cents per share on revenue of $ 132.2 million, according to Zacks Investment Research.
Results: DraftKings lost 98 cents net per share, although the adjusted loss was 57 cents, according to Refinitiv. Revenue reached $ 132.84 million. This is an increase of 98% from a year earlier, or 42% on a pro forma basis.
Monthly unique users topped one million, up 64% from a year earlier.
“The resumption of major sports such as the NBA, MLB and NHL in the third quarter, as well as the start of the NFL season, have generated huge customer engagement,” said DraftKings CEO Jason Robins in the results release.
Perspective: The sports betting specialist now sees annual revenues of $ 540 million to $ 560 million, from an earlier range of $ 500 million to $ 540 million. That would be a pro forma gain of 25% to 30%. Analysts had forecast 2020 revenue of $ 530 million.
DraftKings gave an initial revenue forecast for 2021 of $ 750 million to $ 850 million, a 45% gain midway through. Wall Street had listed $ 780 million.
DraftKings gave a preview of third quarter results in an S-1 filing in October. He said that “the atypical NFL betting retention rates during the three months ended September 30, 2020 had an estimated negative revenue impact of approximately $ 15 million based on our average retention rate. historic for online sports betting of about 6.5%. “
Low maintenance is often the result of a high number of paying favorites for bettors. Basically, they paid more bets than expected.
Although DraftKings is best known for online sports betting, it is also making a significant breakthrough in casino games through its iGaming app.
“The total number of iGaming handles in the United States grew 335% year over year, and we estimate it accounted for about half of total online gaming revenue,” wrote Kevin Rippey. , Evercore analyst in a recent note.
The iGaming app is part of a partnership with Hollywood Casino at Penn National Race Course, a Penn National Gaming (PENN) property.
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DKNG share
Shares jumped 9% to 45.00 in the stock market today. DraftKings stock, which has an RS rating of 97 out of a possible 99, is well below its 50-day moving average, according to MarketSmith’s chart analysis.
DKNG shares rebounded after several states passed gambling laws on November 3. Most notably, voters in Maryland have approved a measure to legalize sports betting in licensed facilities. DraftKings and rival Flutter Entertainment FanDuel, owned by (PDYPF), has spent millions to lobby for this measure. Colorado, Louisiana, and Nebraska have also legalized sports betting.
Among other stocks in the game, Penn National Gaming, which recently acquired Barstool Sports, rose 3.2% on Friday. Caesars Entertainment (CZR) increased by 2.9%, and MGM Resorts (MGM) added 1.9%.
DraftKings Partnerships
DraftKings has also partnered with various sports franchises and media companies. But with shortened professional sports seasons and schedules altered by Covid-19 cases among players and staff, online sports betting has struggled.
In October, DraftKings signed an agreement to integrate its content with AT&T (T) Turner Sports Platforms. The deal made DraftKings the exclusive provider of daily sports betting and fantasy sports at certain Turner Sports and Bleacher Report properties.
The deal excludes content surrounding the National Basketball Association as Turner has already entered into a separate agreement with rival FanDuel to incorporate that content. Financial terms of the deal were not disclosed.
DraftKings has also signed agreements with various star athletes, sports franchises and media companies. He teamed up with basketball legend Michael Jordan, the NFL New York Giants, the MLB Chicago Cubs and From disney (DIS) ESPN.
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Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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