DraftKings Exceeds 2021 Revenue Guidance With US$1.30 Billion, Expects Positive Adjusted EBITDA In Q4 2023

DraftKings Inc. (Nasdaq: DKNG) released this morning its financial results for Q4 and full-year 2021, highlighting an annual revenue of US$1.30 billion. This is an increase from 2020’s US$614.5 million and beats the adjusted revenue guidance of US$1.24 – US$1.28 billion.

Gross margin for the year came in at 38.7%, down from last year’s 43.6%. Further, the company incurred operating expenses larger than its annual revenue, the highest of which is US$981.5 million in sales and marketing expenses. This led to an operating loss of US$1.56 billion for the year compared to the operating losses of US$843.3 million last year.

The firm’s annual net loss ended at US$1.52 billion, down from last year’s net loss of US$1.23 billion. This annual loss translates to US$3.78 per share.

Meanwhile, adjusted EBITDA for the year came in at a loss of US$676.6 million, down from last year’s US$391.9 million loss. This includes adjusting for incurred stock-based compensation of US$683.3 million for the year, an increase from US$325.0 million last year.

For Q4, the firm earned US$473.3 million in revenue, up from Q3 2021’s US$212.8 million and Q4 2020’s US$322.2 million. Gross margin increased to 46.5% from the previous quarter’s 19.8% but decreased from last year’s 50.6%.

Still, with operating expenses higher than the revenue, the company recorded a quarterly operating loss of US$368.8 million, up from US$546.5 million loss in the last quarter but down from US$268.3 million loss in the year-ago period. This further led the firm to incur a quarterly net loss of US$326.3 million compared to the net losses of Q3 2021’s US$545.0 million and Q4 2020’s US$242.7 million.

Adjusted EBITDA for the quarter came in at a loss of US$128.0 million, up from last quarter’s US$313.6 million loss but down from last year’s US$87.9 million loss.

“DraftKings’ strong fourth-quarter performance exceeded our expectations on the top and bottom line,” said CEO Jason Robins.

The company ended the year with cash and cash equivalents balance of US$2.15 billion. Current assets and current liabilities came in at US$2.75 billion and US$929.4 million, respectively.

The firm also relayed its increased 2022 revenue guidance, from the previously announced US$1.7-US$1.9 billion to US$1.85-US$2.0 billion. It also expects its adjusted EBITDA for the year to be at US$825-US$925 million loss, effectively projecting a redder bottom line in 2022.

The first positive adjusted EBITDA quarter is expected in Q4 2023.

The online sports gaming platform relayed that it engaged an average of 2.0 million unique paying customers monthly during the quarter compared to 1.3 million last quarter. The average revenue per user came in at US$77 for the quarter, up from US$47 per user in the last quarter.

DraftKings last traded at US$22.06 on the Nasdaq, down 4.05% on the day and down 14.73% pre-market.

Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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