DraftKings Scores Fourth-Quarter Sales Beat, Lifts 2021 Outlook

DraftKings posts better-than-expected fourth-quarter revenue and raises its 2021 guidance as sports - and wagering on it - roars back.
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Sports-betting platform DraftKings  (DKNG) - Get Report posted better-than-expected fourth-quarter revenue and raised its 2021 sales guidance as sports - and wagering on it - came back stronger than expected amid the ongoing pandemic.

The Boston-based company posted a loss of $266.4 million, or a loss of 24 cents a share on an adjusted basis, vs. a pro-forma loss of $33.4 million in the comparable year-ago quarter. Revenue rose to $322.2 million from $162.6 million.

Analysts polled by FactSet were expecting a loss of 42 cents a share on sales of $235.3 million. Losses from operations more than doubled to $268.4 million from $35.8 million. Adjusted losses before income, taxes, depreciation and amortization were $87.9 million vs. $8.7 million a year ago.

Monthly unique payers (MUPs) rose 44% on a year-over-year basis, DraftKings said, noting that on average 1.5 million monthly unique paying customers engaged with DraftKings each month during the fourth quarter.

For 2020, MUPs increased 29%, “which includes the impact of COVID-19 on our MUPs for Sportsbook and DFS primarily during the second quarter and early in the third quarter,” the company said.

Average revenue per MUP was $65 in the fourth quarter representing a 55% increase versus the same period in 2019, thanks to “increased engagement with our iGaming and mobile sports betting product offerings as well as successful cross-selling.”

The daily fantasy sports and sports betting company was one of the early "SPACs" to hit the market. Last April it combined with publicly traded special-purpose acquisition company Diamond Eagle Acquisitions and SBTech, with its shares rising 10% to $19.21 in its first day of trading. 

However, a lack of live sporting events globally due to the coronavirus pandemic made betting on sporting events nearly impossible, which ate into the company’s earlier profit picture.

DraftKings said it was now betting on solid improvement on that front. The company raised its fiscal year 2021 revenue guidance to a range of $900 million to $1 billion from a range of $750 million to $850 million.

Shares of DraftKings were up 5.86% at $61.20 in trading on Friday. The stock earlier this month got a boost after ARK Next Generation Internet ETF (ARKW) - Get Report disclosed buying 620,300 shares of the sports gambling platform.

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