DraftKings sees better-than-expected Q3 results, raises revenue expectations

DraftKings on Friday reported its financial results for the third quarter of 2020. The company's revenue amounted to $133 million, an increase of 42% compared to the same period in 2019, ahead of Wall Street analysts’ consensus forecast. 

The company said more than 1 million monthly unique paying customers were engaged with DraftKings each month during the third quarter, up 64% year-over-year. It also said it now expects revenue this year of $540 million to $560 million, up more than 25% from 2019 pro-forma levels and higher than its previous guidance of $500 million to $540 million. DraftKings said it expects $750 million to $850 million in revenue for 2021.

“The resumption of major sports such as the NBA, MLB and the NHL in the third quarter, as well as the start of the NFL season, generated tremendous customer engagement,” Jason Robins, DraftKings’ co-founder, CEO and Chairman of the Board said in a press release. “In addition to our year-over-year pro forma revenue growth of 42%, DraftKings recorded an increase in monthly unique payers of 64% to over 1 million, demonstrating the effectiveness of our data-driven sales and marketing approach. Our product offerings and scalable platform provide a distinctive and personalized experience for customers across the ten states where we operate mobile sports betting today, and we look forward to entering additional jurisdictions at the earliest opportunity.”

The company had its IPO in April after a three-way merger engineered via a special purpose acquisition company, or SPAC, led by Hollywood veterans Harry Sloan and Jeff Sagansky. Sloan serves as chairman of DraftKings. The combination with the two other firms, Diamond Eagle and SBTech, means that quarterly results are reported on a pro-forma basis, Deadline reports.

In raising its revenue outlook, DraftKings said it is assuming the plans for sports leagues are maintained through the end of the year. Despite the uncertainties in the current environment, it has improved since the early days after DraftKings went public, when the company contended with a near-complete shutdown of sports around the world due to COVID-19. 

DraftKings spent millions last quarter on its partnerships, including with Michael Jordan in an equity deal, and with the New York Giants, Chicago Cubs, Turner Sports and ESPN.