DraftKings Proving The Doubters Wrong
DraftKings Strong Q4: Draftkings (DKNG) reported on fourth-quarter and full-year 2020 financial results. The daily fantasy and sportsbook company ended the year by almost doubling revenue in the quarter while the costs have gone up significantly.
The company has become a household name in the sports betting industry and hasn’t disappointed investors during the global pandemic.
For the three months ended December 31, 2020, DraftKings reported revenue of $322 million. That is an increase of 146.1% compared to $131 million during the same period in 2019. The expected revenue was $232.6 million for the quarter.
The loss per share was 24 cents; however, the expected loss of 47 cents, according to a Refinitiv survey of analysts.
Favorable Sports Schedule
The fourth quarter is a favorable sports schedule, which means more ways to market towards current and new customers.
For example, the bet $1 promotion to win $100 for new users only has been a very smart marketing tactic. Also when you refer a friend, depending on the deposit, the app gives you a certain number of free bets.
When looking at the numbers from the previous year from Diamond Eagle Acquisition Corp (DEAC) and SBTech, the numbers depict that DraftKings was able to market and generate more engagement to the site.
This helped the company achieve a high mark with a strong $322 million in fourth-quarter revenue. On a year over year basis, that would translate to a gain of 98%.
Draftkings’ CEO, Jason Robins, stated that,”“In the fourth quarter of 2020, we saw MUPs increase 44% to 1.5 million and ARPMUP increase 55% to $65.
We are raising our revenue outlook for 2021 due to our expectation for continued growth, the outperformance of our core business, and newly launched states that were not included in our previous guidance.”
More Numbers From The Quarter
Draftkings is now home to 1.5 million unique paying customers in the fourth quarter. According to Factset, the experts predicted the estimated reported to be 1.43 million users. The averaging monthly for a unique was $65 a quarter.
The company surpassed the 1 million user benchmark in the third quarter of last year. The company also raised its revenue outlook for the fiscal year 2021 from a range of $750 million dollars to $850 million dollars to a range of $900 million dollars to $1 billion dollars.
With sports betting becoming legalized in many states across the country, DraftKings alluded to a strong user base due to its 2020 marketing strategy which lead to more spending. The extra spending had become a success.
The launch of a mobile sports betting app and iGaming in Michigan and not to mention the mobile sports betting app in Virginia helped boost their numbers in the fourth quarter.
Sportsbooks & Other News
Currently 20 states including Washington D.C. allow sports betting. That is up from 19 in quarter three. Draftkings was able raised and donated over $1.6 million to charity.
Draftkings (DKNG) is having a good day in the stock market. It is currently at $68.35 which is up over 11% from the previous close. The company should continue its meteroric rise in both the number of user increase and the increase in stock price.