DraftKings praises “significant” Q1 growth and customer demand as losses hit $467m

DraftKings revenue rose by 34% year on year (YoY) during Q1 2022 to $417m, according to the US sports betting heavyweight’s latest financial report.

Detailing its financial results for Q1, the Nasdaq-listed firm revealed a 58% YoY jump in operational losses, which climbed to $515.5m in the first three months of 2022, leading to a net loss increase of 35% YoY to $467.6m.

Pro forma costs inclusive of sales and marketing, product and technology, and general administrative costs amounted to a whopping $932m during Q1 2022.

Company adjusted EBITDA losses increased to $287.5m from a prior Q1 2021 loss of just $139.2m.

DraftKings revealed a 29% YoY increase in monthly unique players (MUP), with average revenue per MUP rising 11% over the same period to $67.

The Boston-headquartered operator highlighted a 44% YoY spike in its B2C revenue, which rose to $404m during Q1 2022.

Despite the losses, DraftKings co-founder, CEO and chairman Jason Robins hailed the quarter as a period of “significant growth” across its key revenue and performance metrics.

“We are not seeing any impact from inflationary pressures on customer demand, and we continue to improve the user experience by adding breadth and depth to our DFS, mobile sports betting and igaming products.

“We are also improving our efficiency in acquiring and retaining customers and have a strong pipeline of new jurisdictions to enter,” he added.

DraftKings CFO Jason Park echoed these comments: “We are pleased with our strong revenue and adjusted EBITDA performance in the first quarter, which was driven by healthy underlying customer behavior and our ability to capture efficiencies.

“Therefore, we are increasing the midpoint of our fiscal year 2022 revenue guidance by $50m and improving the midpoint of our fiscal year 2022 adjusted EBITDA guidance by $75m,” Park added.

DraftKings has confirmed that despite the continuing quarterly losses, it will increase its 2022 revenue guidance from a range of $1.85bn to $2bn to $1.925bn to $2.025bn, which equates to a YoY growth increase from 49% to 56%.

In tandem, DraftKings has also revised down its adjusted EBITDA guidance from a higher loss range of between $825m and $925m to a loss of between $760m and $840m.

The results come just 24 hours after DraftKings announced the completion of its acquisition of Golden Nugget Online Gaming, an all-share deal which in August 2021 had a provisional value of $1.56bn, but has since shrunk dramatically to just $450m following a decline in the value of GNOG shares.

Following this announcement, DraftKings has said that its GNOG acquisition, together with a pending launch in Ontario, will contribute an additional $130m to $150m in revenue and negative $50m to negative $70m in adjusted EBITDA in fiscal year 2022.

DraftKings stock was up 4% at the time of writing in pre-market trading to $14.44.