DraftKings hails “outstanding” Q1 2021 as pro forma revenue rockets 175%
Sportsbook heavyweight raises revenue guidance for 2021 to more than $1bn despite deepening losses of $346m
DraftKings has posted a 175% pro forma year on year revenue increase in Q1 to $312m fueled by strong customer acquisition and retention, as well as new state launches.
The Boston-based operator reported a 114% annual increase in monthly unique players (MUP) within its B2C segment, with average revenue per MUP rising 48% over the same period to $61.
However, net losses widened to $346m compared with $81m in Q1 2020, while pro forma costs relating to sales and marketing, product and technology, and general administrative costs amounted to $637m during the quarter.
On the back of the strong top-line growth, DraftKings has increased its fiscal year 2021 revenue guidance from between $900m-$1bn to $1.05bn-$1.15bn.
“The increase reflects solid performance in the first quarter of 2021, continued strong user activation due to the effectiveness of our marketing spend, well-executed launches of mobile sports betting and igaming in Michigan and mobile sports betting in Virginia, and a modest contribution from our recently completed acquisitions,” DraftKings said.
“This guidance also assumes that all professional and college sports calendars that have been announced come to fruition and that we continue to operate in states in which we are live today,” the firm added.
DraftKings CEO Jason Robins hailed Q1 performance as an “outstanding start” to 2021, a quarter in which the operator entered Michigan and Virginia.
“We continued to make progress and remain on track with the migration to our own in-house proprietary sports betting engine, strengthened our content and technology capabilities with the acquisitions of VSiN and BlueRibbon Software,” Robins said.
“We also invested in further differentiating our product offering with the upcoming rollout of social functionality in our DFS and mobile sportsbook apps,” he added.
DraftKings has confirmed that a migration to its in-house proprietary technology platform will complete during Q3 2021 after having been in the works for almost a year.
The firm has also revealed it will roll out social media-style functionality to its DFS and mobile sportsbook apps, allowing bettors to interact and communicate via a shared peer-to-peer environment.
“The product is particularly unique because it amplifies our ability to create an interconnected ecosystem across our consumer products,” said DraftKings. “Features like universal profiles, friends lists, commenting and loyalty/rewards will allow DraftKings to connect users across products.”
Commenting on the results, Regulus Partners analyst Paul Leyland said: “DraftKings has the scale and financial headroom to prove its business model or modify it, which is a big problem for the rest of the US-facing industry, in our view.
“This level of financial firepower and the willingness to deploy it so aggressively rewrites the rules of online gambling engagement that have applied for circa 20 years,” he added.
Last month, DraftKings hired former Verizon Media executive Brian Angiolet to be its new chief media officer and to support the recent acquisition of betting content platform VSiN.
The operator later hired philanthropist and ex-supermodel Gisele Bündchen as a special advisor to Robins and the board of directors.