DraftKings (DKNG) reported today strong third-quarter earnings results and weaker-than-expected forward guidance that disappointed investors.
DraftKings announced a third-quarter net loss of $450.5 million, or $1 per share. Wall Street analyst’s consensus for DKNG was for a loss of $1.04 per share. In the third quarter (Q3) of 2021, the company lost $545 million.
DraftKings revenues rose 136% to $502 million in Q3, up from $213 million in the same quarter the previous year. Analysts’ expectations were for revenue of $439.
Monthly unique paying customers (MUPS) rose 22% to 1.6 million, from 1.3 million the previous year. The figure disappointed analysts that were looking for 2 million unique paying customers.
In September, Monthly unique paying customers (MUPS) grew 27% (YOY) to 2.7 million, September is the strongest period of the year for MUPS due to the start of the NFL season.
The Average revenue per monthly unique payer (ARPMUP) for DraftKings, doubled on a yearly basis to $100.
In Q3, favourable sports outcomes contributed approximately $70 million of revenue.
DraftKings Guidance
DraftKings now expects full-year 2022 revenues of between $2.16 billion and $2.19 billion, which is improved from the previous guidance for revenues between $2.08 billion and $2.18 billion analysts expectations estimate revenues of $2.14 billion. The gross margin rate for the full year 2022, is expected to be almost 40% and to improve in 2023 into the low to mid 40%.
For 2023 the company forecast $2.80 billion to $3.00 billion in revenue, while Wall Street expectations are for $2.83 billion.
DraftKings expect that the fourth quarter of 2023 will be the first quarter with positive adjusted EBITDA.
Here comes the bad news: The company forecasts 2023, adjusted EBITDA loss to be between $475 to $575 million, which is much higher than the analysts’ expectation that has been looking for a loss of $426 million.
DraftKings Price
DraftKings stock has the worst day in its history today as it is trading 26.74% lower at $11.48. DKNG stock has a 52-week trading range between $9.77 and $45.97. The DKNG market capitalization now stands at $13.19 billion.
DraftKings has lost 58% of its value since the start of 2022 and has lost 73% in the last 12 months.
Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently, Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).
