Shares of sports betting company DraftKings (NASDAQ:DKNG) jumped 10% at the open today, and remain 9% above yesterday's closing price as of 10:40 a.m. EST.
The company reported strong revenue growth on Friday, leading it to raise its fiscal year 2020 revenue guidance.
DraftKings reported pro forma revenue growth of 42%, meaning it is comparing to the previous year as if its merger with SBTech (Global) Limited and Diamond Eagle Acquisition occurred on Jan. 1, 2019. The mergers culminated in the company's initial public offering (IPO) in April 2020.
In addition to raising 2020 revenue guidance by about 6% at the midpoint of given ranges, the company initiated fiscal 2021 guidance that implies about 45% year-over-year growth.
DraftKings is riding momentum from two recent events. First, the return of major sports leagues in the third quarter from pandemic-forced suspensions increased user activity. The company said its monthly unique payers (MUP) increased by 64% to over 1 million. And results from the U.S. election continued to add support for the sector. Sports betting ballot initiatives were passed in three more states, bringing the total to 21 states and Washington, D.C., where sports betting is legal in the U.S.
DraftKings is now live with mobile sports betting in 10 states after its launch in Tennessee this quarter. The company has also recently entered partnerships with Turner Sports and NFL teams including the Philadelphia Eagles and the New York Giants.
Investors are applauding the company's results today and its growth. Shares are now up more than 130% since its IPO.