DraftKings Q2 revenue jumps 57% to $466m as net losses shrink

DraftKings revenue rose by 57% year on year (YoY) to $466m during the second quarter of 2022, according to the US sports betting, igaming and DFS operator’s latest financial report.

Detailing its financial progress during Q2, the Nasdaq-listed firm revealed a 29% decrease in its net losses, which reduced to $217m in the period.

However, DraftKings’ adjusted EBITDA losses continued to deepen, increasing 24% YoY from $95m in Q2 2021 to $118m in the same period of 2022.

Pro forma costs inclusive of sales and marketing, product and technology, and general administrative costs amounted to a whopping $462.3m, increasing 7% YoY.

DraftKings pointed to a 68% YoY increase in its B2C segment revenue which grew to $455m despite a less favorable sporting calendar during the quarter, when compared to Q2 2021.

At a wider group level, DraftKings pointed to the impact of its Golden Nugget Online Gaming acquisition, which bolstered revenue by $30m, and the launch of DraftKings in Ontario, which helped the firm exceed guidance ranges by almost 40%.

The company revealed a 30% YoY increase in monthly unique players (MUPs), with average revenue per MUP rising 30% over the same period to $103.

The increase in MUPs, DraftKings suggested, was due to “strong unique payer retention and acquisition across sportsbook and igaming products, jurisdictional expansion, partially offset by a decline in DFS MUPs.

ARMUP increased during the quarter thanks to customer engagement, as well as a “mix shift” into the sportsbook and online casino products, as well as reduced promotional intensity when compared to 2021.

DraftKings co-founder, CEO and chairman Jason Robins welcomed the firm’s “excellent” Q2.

“Customer engagement remains strong, and we continue to see no perceivable impact from broader macroeconomic pressures,” Robins said.

“Due to our ongoing investments in core online gaming technologies, we are in a strong position from a competitive perspective as we approach the beginning of the NFL season.

“We remain well capitalized, ready to enter new markets as they become live, and confident in our ability to compete and win with customers,” he added.

Following the results, DraftKings has raised its fiscal year 2022 revenue guidance to a range of between $2.08bn and $2.18bn, from a previous range of between $2.055bn and $2.175bn, first announced in Q1 and equating to YoY growth of 60% to 68%.

In tandem with the revision of revenue targets, DraftKings has revised its adjusted EBITDA guidance figures to a loss of between $765m and $835m in 2022, from a prior guidance figure of between $810m and $910m.

“We executed very well in the second quarter and outperformed the midpoints of the Q2 guidance ranges for revenue and adjusted EBITDA that we provided on our first quarter earnings call,” DraftKings CFO Jason Park explained.

“Our B2C segment drove revenue growth due to stronger than anticipated customer activity, while we continued to make progress on identifying and capturing operating efficiencies.

“As a result, looking forward, we are increasing the midpoint of our fiscal year 2022 revenue guidance by $15m and improving the midpoint of our fiscal year 2022 adjusted EBITDA guidance by $60m,” he added.