DraftKings Revenue Up 34% as Gambling Unfazed by Inflation
The sports-betting company continues to post losses on high expenses to attract customers
By Dean Seal
Wall Street Journal
May. 6, 2022 10:14 am ET
DraftKings Inc. DKNG -5.60%? said first-quarter sales rose by more than a third, adding that record inflation was having no impact on gambling habits.
Still, the Boston-based company’s quarterly loss continued to widen with ballooning operating expenses to attract customers. Its first-quarter loss was the second largest it has reported since going public through a reverse merger in April 2020.
Chief Executive Jason Robins said that the company had 2 million monthly customers, up 29% from a year ago, and that it has a strong pipeline of new jurisdictions to enter over the next year. While high inflation is denting demand for everything from cigarettes to mattresses, he said that its business has been unscathed.
“We are not seeing any impact from inflationary pressures on customer demand,” Mr. Robins said. The company raised its sales outlook slightly for the year, following better-than-expected revenue.
DraftKings is in an expensive fight with competitors to draw in customers as more states legalize sports betting. Its operating expenses increased 46% to $933 million in the quarter compared with last year.
For the period ended March 31, DraftKings reported a net loss of $467.7 million, or $1.14 a share, compared with a loss of $346.3 million, or 87 cents a share, a year earlier. On an adjusted basis, the company said its net loss was 74 cents a share. Analysts polled by FactSet were expecting a first-quarter adjusted loss of $1.09.
First-quarter revenue came in at $417 million from last year, with average revenue per user up 11% to $67. Analysts projected revenue of $412 million.
For the full year, DraftKings now expects revenue between $1.93 billion and $2.1 billion, up $50 million from the midpoint of its prior guidance.
The company narrowed its forecast for adjusted losses before interest, taxes, depreciation and amortization to between $760 million and $840 million, a $75 million improvement from prior guidance.
Shares fell 7.9% in early-morning trading to $13.30. They are down around 72% over the past year.
DraftKings Revenue Up 34% as Gambling Unfazed by Inflation - WSJ |
