DraftKings Records Profitable First Quarter; Potential for Repeat in Q4
Shares of DraftKings (NASDAQ: DKNG) shot up during Thursday's after-hour trading after the online sportsbook company reported its first profitable quarter as a public entity.
The Boston-based business stated that its non-GAAP earnings per share for the second quarter amounted to 14 cents, surpassing the expected loss of 14 cents by analysts. Consequently, DraftKings recorded positive adjusted EBITDA in the June quarter as revenue soared 88% to $875 million, exceeding the predicted $772.9 million by analysts.
The gaming firm's performance in the April to June timeframe seems to be paving the way for continued success in the future.
CEO and co-founder Jason Robins elaborated, "The positive Adjusted EBITDA we generated in the second quarter surpassed our predictions, and we are on track to achieve positive Adjusted EBITDA once more in the fourth quarter of 2023 and for financial year 2024 and beyond."
The press release failed to provide details on the current quarter, which typically sees the slowest performance for sportsbook operators. This is because two of the three months often witness a lack of college or professional football and only Major League Baseball (MLB) provides entertainment among the major sports leagues in July and August.
DraftKings 2023 Perspective Impresses
DraftKings is known for frequently upgrading its annual forecasts, and it did so again on Thursday as it projected higher annual revenues while suggesting the potential of attaining positive Adjusted EBITDA in the fourth quarter.
The company bumped its 2023 revenue estimate to a range of $3.46 billion to $3.54 billion, a significant hike from the previously mentioned range of $3.135 billion to $3.235 billion. The updated projection indicates a yearly revenue growth of 54% to 58%.
For the current year, DraftKings expects an EBITDA loss of $190 million to $220 million, a considerable improvement compared to the initial forecast of a loss of $290 million to $340 million.
The revised financial outlook considers all states where the company is live, as well as Kentucky and Puerto Rico, which are predicted to launch mobile sports betting before 2023 concludes.
DraftKings Generating Higher Revenue per Client
Increasing the number of clients through state launches is crucial for any sportsbook operator, but it's paramount for generating more revenue per bettor. DraftKings appears to be excelling in this area.
Average revenue per monthly unique player (ARPMUP) reached $137 in the second quarter of 2023, marking a 33% rise relative to the same period the year before. "This increase was mainly attributed to improvements in the company's sportsbook hold rate and reduced promotional intensity," the firm explained.
DraftKings offers mobile sports betting in 21 states, servicing 44% of the US population, while its iGaming is live in five states, catering to 11% of the total population.
Read also:
- The 15-year-old murderer admits to fatally shooting Francesco, who was 14.
- Schalke's pressure has affected Terodde.
- Columbia University Faces Possible Expulsion Following Demonstrations
- Football turmoil in Munich: Last-minute penalty stuns Bayern
Source: www.casino.org
