DraftKings revenue rises 60% in Q3 as losses mount
US operator migrates to in-house technology stack ahead of schedule as unfavourable NFL results reduce third-quarter revenue by $40m
DraftKings revenue increased by 60% annually to $213m for Q3 2021, according to the US sports betting heavyweight’s latest financial report.
The Nasdaq-listed firm revealed Q3 net losses of $545m, worsening from the $395m reported during the same period in 2020.
Pro forma costs relating to sales and marketing, product and technology, and general administrative costs amounted to $526m during the quarter.
Company adjusted EBITDA losses rose to $313.6m, from a prior Q3 2020 loss of $197m.
DraftKings revealed a 31% year on year increase in monthly unique players (MUP) within its B2C segment, with average revenue per MUP rising 38% over the same period to $47.
For the second consecutive quarter, DraftKings has increased its fiscal year 2021 revenue guidance, this time to between $1.24bn and $1.28bn, which would equate to annual growth of between 93% and 99%.
“This guidance reflects strong results year-to-date, completed new state launches and our demonstrated ability to engage users and acquire customers efficiently and does not include the impact of any new state launches after 5 November 2021,” the firm said in a statement.
DraftKings’ full-year 2021 revenue guidance also includes a $25m negative revenue impact primarily due to customer-friendly NFL event outcomes in October.
Indeed, DraftKings CFO Jason Park confirmed Q3 revenue would have been $40m higher if NFL margins were better.
In addition to raising its FY 2021 estimate, DraftKings has confirmed 2022 revenue guidance range of between $1.7bn and $1.9bn.
Following successful launches in Wyoming, Arizona and Connecticut, DraftKings is now live with mobile sports betting in 15 states that collectively represent 29% of the US population.
In respect of igaming, DraftKings is now live in five states, representing approximately 11% of the US population, following its launch in Connecticut.
DraftKings has also revealed the completion of its migration onto in-house proprietary technology from SBTech during Q3 ahead of schedule, something which the firm highlighted as already providing benefits in areas including tech resourcing and product innovation.
CEO Jason Robins paid tribute to the firm’s employees in spurring another quarter of revenue growth.
“DraftKings had a strong third quarter that highlights our team’s unique ability to drive engagement with our core customers while simultaneously launching new states and verticals and completing the complex migration to our own in-house technology ahead of schedule,” Robins explained.
“Since migrating, we have rapidly added innovative features and functionality to our top-ranked mobile sports betting app.
“We are also excited that our new growth initiatives, including DraftKings Marketplace and our content and media business, demonstrated promising early results in the quarter,” Robins added.
From a technology perspective, DraftKings has had a very busy Q3 period with a number of key launches.
These include DraftKings’ first NFT marketplace, the introduction of micro-betting products across its sports betting platform and the launch of the in-house developed Rocket online casino product in New Jersey.
Earlier this week, the firm expanded its existing agreement with the NBA to become official sports betting partner of the basketball league.