DraftKings Sees Revenue Explode as In-Person Sports Returns, Falls Short of Earnings Expectations

By Thomas Price Friday, May 7, 2021

After more than a year of delayed seasons, crowdless games, and poor ratings, professional sports is finally open to receiving fans in-person once again, renewing interest in all aspects of the game, including sports betting. As a result, regulated gaming and sports gambling company DraftKings has seen a massive increase in total revenue and users in its Q1 earnings report. In spite of the new increase in revenue, the company still came up short of analyst expectations, with business still at 2019 levels.

Person using a phone for sports betting.

DraftKings Earnings vs. Expectations

In the Q1 earnings report for the company, DraftKings generated a total revenue of $312 million. In comparison to the same quarter last year, where the sports gaming business only reeled in $89 million, DraftKings increased its revenue by 253%. The large increase in revenue can mostly be attributed to the massive influx of monthly unique payers that helped spur business as the sports world ramped up once again. In fact, the average of 1.5 million monthly unique paying customers represents a 114% increase from the same quarter last year.

While DraftKings finally saw business begin to return to form revenue-wise, the company still reported a loss of $0.87 per share. The figure drops to a loss of just $0.36 per share when accounting for stock-based compensation and other adjustments. However, compared to analyst expectations of a loss of just $0.51 per share, DraftKings once again missed the mark.

While the sports betting company continues to lose money, it also continues to grow. DraftKings is now live in 12 states across the United States (US) as legislation continues to sweep the nation. In fact, the company added iGaming in Michigan and mobile sports betting in Virginia over the course of Q1 of the 2021 fiscal year. With new legislation to legalize sports betting in Wyoming, Arizona, and New York, business should expand further moving forward.

DraftKings Future Plans and Stock Market Reaction

After such a major jump in total business for the sports betting company, DraftKings updated its fiscal year revenue guidance to a range of $1.05 billion to $1.15 billion. One of the largest new plans announced by the company was the introduction of social community features directly into the sports betting app. This new plan by DraftKings could result in significantly higher usage over time by customers and increase total revenues.

Despite some of the good news, the disappointment on non-adjusted earnings per share has DraftKings stock down in early premarket trading. After falling by 7.64% yesterday, company shares are down nearly 1% this morning as many investors were unimpressed with the Q1 reported results.

In a statement provided alongside the Q1 earnings report, co-founder and CEO of DraftKings Jason Robins said, “DraftKings is off to an outstanding start in 2021. We continued to make progress and remain on track with the migration to our own in-house proprietary sports betting engine, strengthened our content and technology capabilities with the acquisitions of VSiN and BlueRibbon Software, and invested in further differentiating our product offering with the upcoming rollout of social functionality in our DFS and mobile Sportsbook apps.”

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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