What happened
Shares of DraftKings (DKNG 4.96%) popped 15% on Friday after the sports-betting leader delivered impressive revenue growth and boosted its full-year financial forecast.
So what
DraftKings' revenue rocketed 81% year over year to $855 million in the fourth quarter, fueled by the launch of its Sportsbook and iGaming offerings in recently legalized markets. The company now has mobile sports-betting operations in 20 states that together account for more than 40% of the U.S. population.
Better still, DraftKings is getting better at acquiring and retaining customers. Its monthly unique paying users jumped 31% to 2.6 million. Chief Financial Officer Jason Park said DraftKings was benefiting as its competitors pared back their promotional activity in markets where sports gambling has been legalized for some time.
Importantly, DraftKings also made progress toward its profitability goals. It cut its operating loss to $232 million from $369 million in Q4 2021. Moreover, DraftKings' adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss declined to $50 million, down from $128 million in the prior-year period.
Now what
DraftKings lifted the midpoint of its 2023 full-year revenue guidance range to $2.95 billion, up from a prior estimate of $2.85 billion. That would equate to year-over-year growth of roughly 32%.
Furthermore, DraftKings now expects to produce an EBITDA loss of approximately $400 million in 2023, which is significantly better than its previous estimate of roughly $525 million.
"Moving into 2023, we will continue to drive revenue growth and focus on expense management to accelerate our adjusted EBITDA growth," CEO Jason Robins said.
