DraftKings, the popular sports betting company, faced a challenging quarter as it fell short of Wall Street’s expectations. Despite missing estimates on both the top and bottom line, DraftKings managed to increase its revenue by an impressive 44%. CEO Jason Robins attributed the quarter’s challenges to unfavorable outcomes from NFL games, describing it as the worst two-week run since the company went public.
Robins, however, remained optimistic about the company’s performance, noting that the customer experience “strongly outperformed expectations.” He emphasized that swings in sports outcomes are part of the business and expressed confidence that the company would bounce back.
In a surprising move, DraftKings raised its fiscal year 2024 guidance to between $410 million and $510 million, up from the previous range of $350 million to $450 million. Robins attributed this increase to the company’s resilience in the face of challenges, particularly the recent unfavorable sports outcomes.
Despite the positive outlook, DraftKings’ performance in the fourth quarter fell short of analyst estimates. The company reported a net loss of $44.6 million, an improvement from the $242.7 million loss in the same period the previous year. After adjusting for one-time items, DraftKings reported a profit of 29 cents per share.
DraftKings also saw growth in its user base, with 3.5 million average “monthly unique payers,” a 37% increase from the previous year. The company’s average revenue per user also saw a 6% boost in the fourth quarter.
Looking ahead, DraftKings continues to expand its reach, recently launching its Sportsbook product in Maine and Vermont, bringing its total to 24 states allowing mobile sports betting. The company also announced plans to acquire lottery app Jackpocket for approximately $750 million, a move that CEO Jason Robins believes will tap into a massive addressable audience in the lottery industry.
Despite the challenges faced in the recent quarter, DraftKings remains optimistic about its future prospects, driven by its strong customer experience and strategic growth initiatives.
(Source: MarketWatch | Barron’s | CNBC)
