Draftkings Inc (NASDAQ:DKNG) stock shot up in afterhours trading as it reported an 88% jump in second-quarter revenue and earnings ahead of management’s prior expectations.
It reported US$875 million of revenue for the period with the company boasting robust customer retention, ‘efficient’ new customer acquisition, and product innovation.
Earnings (adjusted EBITDA) for the quarter were reported at US$72.97 million, versus a US$118 million loss in the same period of 2022.
The online sports betting company told investors that it saw a 44% rise in monthly unique players – or MUPs – to 2.1 million and revenue per MUP was up 33% at US$137 for the quarter.
It highlighted that the stronger performance was the result of an ‘improvement in the structural sportsbook hold rate and reduced promotional intensity’.
“DraftKings produced outstanding results for the second quarter of 2023. We grew revenue at an impressive year-over-year rate,” chief executive Jason Robins said.
He added: “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.”
The upbeat earnings statement, triggered an upgrade to full-year guidance with 2023 revenue forecast some US$315 million higher, pitched at US$3.46 billion to US$3.54 billion.
Full-year earnings guidance is now pitched in a range between negative US$205 million and US$315 million, narrowing from the previous loss forecast of between US$290 million and US$340 million.
Guidance included operations in all existing jurisdictions for online sports betting in which Draftkings is ‘live’, but, excludes any performance in Kentucky and Puerto Rico where it expects to launch in the coming months.
It noted that Draftkings is live for mobile sports betting in 21 states, representing 44% of the US population, plus is live for iGaming in 5 states covering 11% of the US population. In Canada, it offers Sportsbook and iGaming products in Ontario, available to 40% of Canada’s population.
The continuing state-by-state opening of the North American sports betting market is seen as a catalyst in the Draftkings investment proposition.
Draftkings stock soared some 13.3% in afterhours trade, adding US$4.01 to trade at US$34.00.