DraftKings Shares Climb After Company Posts Strong Q4 Results, Lifts 2021 Guidance In Show Of Sports Faith
Despite shakiness in the overall sports economy, with declining TV ratings and event revenue due to Covid-19, DraftKings is wagering on the continued health of the sports betting business.
The online gaming firm reported fourth-quarter results ahead of Wall Street forecasts, with revenue of $322 million and a loss of 24 cents per share on an adjusted basis. Comparisons with the same period in 2019 are inexact because the company formed and went public last April. On a pro forma basis, the company said, the revenue figure rose 98%. Wall Street analysts had expected a loss of 47 cents a share.
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Investors hailed the news, sending DraftKings shares up 5% in early trading, to $60.77 a share.
The company reported having 1.5 million monthly unique paying customers during each month in the quarter ending December 31, up 44% from the same period a year earlier.
In a sign of faith in sports betting, especially as more states continue to legalize it in the wake of a landmark 2018 Supreme Court ruling, DraftKings raised its guidance for revenue in 2021. It now expects to take in $900 million to $1 billion, up from $750 million to $850 million, under the assumption that college and pro seasons unfold as expected. Although attendance will continue to be restricted, college basketball’s March Madness, followed by the NBA and NHL playoffs, lie ahead as highlights on the sports calendar.
In a statement, CEO Jason Robins said the upward adjustment in revenue forecasts was prompted by “our expectation for continued growth, the outperformance of our core business and newly launched states that were not included in our previous guidance.”
DraftKings’ IPO came via a reverse merger in a SPAC transaction involving longtime entertainment figures Harry Sloan and Jeff Sagansky. Sloan, former CEO of MGM, is vice chairman of DraftKings.
