DraftKings Inc. (NASDAQ: DKNG) reported its financial performance in the second quarter of 2023, outperforming market expectations and showing significant growth compared to the previous year.
The firm posted $874.93 million in revenue for the quarter ending in June 2023, exceeding the consensus estimate by 14.78%. Comparatively, the year-ago revenues stood at $466.19 million and the previous quarter revenue stood at $769.7 million.
The company still recorded a quarterly net loss of $77.3 million compared to its loss of $217.1 million a year ago. This loss translates to $0.17 per share, surpassing the consensus estimate of a loss of $0.24. This is a significant improvement from the loss of $0.50 per share reported in the same quarter last year, with these figures adjusted for non-recurring items.
However, the gambling firm was able to deliver its first positive adjusted EBITDA in the second quarter, with the figure coming in at $73.0 million versus the losses of $221.6 million last quarter and $118.1 million last year.
DraftKings has also revised its revenue guidance for fiscal year 2023, increasing the range to $3.46 billion to $3.54 billion from the previously announced range of $3.135 billion to $3.235 billion. This updated guidance represents a significant year-over-year growth of 54% to 58%.
Additionally, the company has made improvements to its fiscal year 2023 adjusted EBITDA guidance. DraftKings now anticipates it to be between negative $190 million and $220 million, compared to the prior guidance of between negative $290 million and $340 million.
Looking ahead to the fourth quarter of 2023, DraftKings expects to achieve $150 million to $175 million of adjusted EBITDA and generate nearly $1.2 billion in revenue.
The strong performance of DraftKings can be attributed to its success in the rapidly expanding sports betting industry in the United States. The company emerged as one of the early winners in this sector, benefiting from the consolidation and withdrawal of smaller operators. This has significantly improved the outlook for investors, and as a result, DraftKings’ stock has shown remarkable growth, increasing by about 165.5% since the beginning of the year, while the S&P 500 gained 17.6%.
CEO Jason Robins reaffirmed the company’s commitment to achieving profitability, aiming to be adjusted-EBITDA positive in 2024, which would be a significant milestone since its founding in 2012. The company’s recent success, as well as the substantial increase in its customer base, indicates a promising future for DraftKings.
“The positive Adjusted EBITDA that we generated in the second quarter exceeded our guidance, and we are well on our way to achieving positive Adjusted EBITDA again in the fourth quarter of 2023 and for fiscal year 2024 and beyond,” said Robins in a statement.
In terms of operations, the number of monthly unique payers (MUPs) in Q2 2023 surged to 2.1 million, showing a substantial 44% increase compared to the same period in 2022. This growth can be attributed to the retention and acquisition of unique paying customers across DraftKings’ Sportsbook and iGaming products, along with the expansion of these products into new jurisdictions.
During the same quarter, the average revenue per MUP (ARPMUP) reached $137, marking a 33% rise compared to the corresponding period in 2022.
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