What happened
Shares of DraftKings (DKNG -1.13%) fell 8.9% on Friday, even after the online gambling leader boosted its full-year revenue and earnings forecast.
So what
The company's revenue jumped 34% year over year to $417 million in the first quarter. Expansion into states that recently legalized sports betting and solid results from the company's customer acquisition, engagement, and retention efforts contributed to these impressive gains.
In all, DraftKings' monthly unique payers leaped 29% to 2 million. Those customers also spent more on its betting platforms despite many facing significant economic challenges, such as higher energy, food, and housing costs. All told, the company's average revenue per payer rose 11% to $67.
"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 [daily fantasy sports], mobile sports betting, and iGaming products," CEO Jason Robins said in a press release.
Image source: Getty Images.
Still, investors likely focused on the large losses DraftKings continues to rack up as it spends heavily to attract and retain bettors in the face of intensifying competition. The company generated earnings before interest, taxes, depreciation, and amortization (EBITDA) of negative $289.5 million, compared with negative $139.3 million in the year-ago quarter.
Now what
However, DraftKings' strong customer gains prompted it to raise its full-year financial outlook. Management now expects revenue to grow 49% to 56% to between approximately $1.93 billion and $2.03 billion, with an adjusted EBITDA loss of $760 million to $840 million. That's up from its prior estimates for revenue of $1.85 billion to $2 billion and an adjusted EBITDA loss of $825 million and $925 million.
Notably, DraftKings' updated forecast does not include contributions from its recent acquisition of Golden Nugget Online Gaming or its expected launch in Ontario in the second quarter.
