Newly public online sports-betting site DraftKings (DKNG) - Get Report on Friday posted a first-quarter loss that was wider than a year ago as the sports world came to a full stop amid the coronavirus pandemic, halting sports-betting activity with it.
The Boston-based company posted a loss of $68.7 million, or 18 cents a share, vs. a loss of $29.5 million, or 8 cents a share, in the comparable year-ago quarter. Analysts polled by FactSet had been expecting a loss of 15 cents a share.
Revenue, which included both DraftKings as well as SBTech, the sports-betting tech company it merged with, totaled $113 million for the quarter, above analysts' forecasts of $104.4 million.
The daily fantasy sports and sports betting company in late December announced its plan tie-up with publicly traded special-purpose acquisition company Diamond Eagle Acquisitions and SBTech. The deal was officially sealed last month, with the shares rising 10% to $19.21 in the first day of trading.
However, a lack of live sporting events globally due to the coronavirus pandemic that has made betting on sporting events nearly impossible ate into the company’s profits, though the company did experience an uptick sales and users in the first quarter.
In a statement, the company said it has responded to the lack of major sports by creating new product offerings that are keeping customers engaged, such as fantasy sports and betting on eNASCAR, Counter Strike, and Rocket League.
It also has launched a series of pop culture free-to-play pools contests that cover topics from democratic debates to TV shows like 'Survivor', 'The Last Dance' and 'Top Chef.' It also recently partnered with MLB on their new MLB Dream Bracket game.
“DraftKings recorded standalone Q1 year-over-year revenue growth of 30% despite the effects of Covid-19,” said CEO Jason Robins. “Additionally, the engagement we continue to see from our customers validates the connection they have with our content, their passion for our products and most importantly their loyalty to our brand.”
The company said it does not anticipate Covid-19 impacting its fiscal 2021 year or other long-term plans.
Shares of DraftKings were up 9.36% at $27.68 in trading on Friday.