Like spectators at a game of reverse limbo, observers may watch DraftKings’ increasing 2022 revenue guidance and ask themselves, “How high will it go?” The sports betting giant said it now expects $1.85 billion and $2 billion to $1.925 billion and $2.025 billion.
The Boston-based company also said first-quarter monthly unique payer revenue rose 11% percent from a year earlier and revenue topped Wall Street forecast. Still, the company’s quarterly loss widened from a year earlier. In a statement, DraftKings said its net loss was $467.7 million, or $1.14 a share, compared with a loss of $346.3 million, or 87 cents a share, a year earlier.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash-flow measure that excludes non-recurring costs, also widened to a negative $289.5 million from $139.3 million.
DraftKings’ shares plunged on the news, falling $1.29, or 8.93%, to close at $13.15 on the Nasdaq.
As Bloomberg News reported, DraftKings has increased revenue and attracted loyal bettors as new online peers and legacy casinos have increased competition. DraftKings’ business rise forced the company to spend millions on advertising and gambling incentives, while still generating losses.
Revenue rose 34% to $417 million from $312 million and topped the $411.2 million average forecast of analysts surveyed by Seeking Alpha.
DraftKings said monthly unique payers rose to 2 million, up 29% from the 2021 first quarter, reflecting strong unique payer retention and acquisition across online sportsbook and internet gaming products and expansion into new states.
Key first-quarter sports events including the Super Bowl and the NCAA Basketball Tournament, combined with strong interest in National Basketball Association wagering to boost this expansion, the company said.
During a conference call with analysts and journalists, DraftKings CEO Jason Robins said he expected the company’s $450 million purchase of Golden Nugget Online Gaming from Tilman Fertitta, which closed this week, to lower costs and boost revenue. Robins said he expected the deal to create $300 million in long-term synergies.
DraftKings said it expanded mobile sports betting and internet gaming with launches in New York and Louisiana, giving the company live mobile sports betting in 17 states that collectively represent approximately 36% of the U.S. population. DraftKings added that it now has live internet gaming in five states, representing approximately 11% of the U.S. population.
The company also said it signed Mike Golic Jr., the former longtime ESPN Radio broadcast partner of Mike Greenberg, who will serve as a commentator, for an undisclosed price.
DraftKings issued 2022 adjusted EBITDA guidance from between a loss of $825 million and $925 million to between a loss of $760 million and $840 million.
Follow Matthew Crowley @copyjockey.
