First Quarter 2022 Highlights
For the three months ended
“DraftKings delivered significant growth across our key revenue and performance metrics,” said
Continued Healthy Growth in Player Retention, Acquisition and Engagement
- Monthly Unique Payers (“MUPs”) increased to 2 million monthly unique paying customers, representing an increase of 29% compared to the first quarter of 2021. The increase reflects strong unique payer retention and acquisition across our online sportsbook and iGaming products and expansion into new states, partially offset by a decline in DFS MUPs.
- Average Revenue per MUP (“ARPMUP”) was
$67 in the first quarter of 2022, representing an 11% increase compared to the same period in 2021. The increase in ARPMUP was primarily attributable to strong customer engagement, a continued revenue mix shift into our iGaming product and an increase in DFS activity on a per MUP basis, partially offset by atypically low hold rates (primarily attributable toNCAA basketball wagering) and an increase in promotional intensity in newly launched states (primarily inNew York ).
Increasing Midpoint of 2022 Revenue Guidance and Improving 2022 Adjusted EBITDA Guidance
DraftKings is raising its fiscal year 2022 revenue guidance from a range of$1.85 billion to$2.0 billion to a range of$1.925 billion to$2.025 billion , which equates to year-over-year growth of 49% to 56%.DraftKings is also improving its fiscal year 2022 Adjusted EBITDA guidance from between a loss of$825 million and$925 million to between a loss of$760 million and$840 million .- DraftKings’ updated guidance for fiscal year 2022 revenue and Adjusted EBITDA includes all states in which it was live as of
May 6, 2022 , includingNew York andLouisiana . This guidance does not include contributions from the acquisition of Golden Nugget Online Gaming, Inc. (“GNOG”) – which was consummated onMay 5, 2022 – or the Company’s expected launch inOntario in the second quarter of 2022.DraftKings expects that the acquisition of GNOG, combined with the Company’s expected launch inOntario , will contribute an additional$130 million to$150 million in revenue and negative$50 million to negative$70 million in Adjusted EBITDA in fiscal year 2022. - Detailed financial data and other information is available in DraftKings’ Quarterly Report on Form 10-Q, which will be filed today with the
Securities and Exchange Commission (the “SEC”), as well as in a slide presentation that can be accessed through the “Investors” section of the Company’s website at investors.draftkings.com.
Expanded Mobile Sports Betting and iGaming Footprint
- Following the Company’s successful launches in
New York andLouisiana ,DraftKings is now live with mobile sports betting in 17 states that collectively represent approximately 36% of theU.S. population. DraftKings is also live with iGaming in 5 states, representing approximately 11% of theU.S. population.- Three of the
U.S. jurisdictions whereDraftKings has the potential opportunity to operate via a market access agreement or direct license –Maryland ,Puerto Rico andOhio - have authorized mobile sports betting. These three jurisdictions represent approximately 7% of theU.S. population and bring the percentage of the population whereDraftKings expects to offer legalized mobile sports betting to approximately 43%, pending licensure and regulatory approvals. - In
Kansas , which represents approximately 1% of theU.S. population, a mobile and retail sports wagering bill has passed the legislature and is currently pending executive action. DraftKings is seeing excitement inCalifornia . The approximately 1.6 million signatures submitted byCalifornians for Solutions to Homelessness and Mental Health Support to qualify the initiative to be placed on theNovember 2022 ballot represents an important step towards legalization.
Product Functionality and Content
DraftKings continued to deepen the content offering for DraftKings Sportsbook, which helps drive customer acquisition, engagement and retention, by adding micro markets like wagering on the “next field goal” for the NBA and college basketball. The Company also introduced several player markets to the DraftKings Sportsbook’s college basketball “Same Game Parlay” offering, including points scored, assists, rebounds, and three pointers made, as well as combinations of these markets.- Prior to March’s
NCAA college basketball tournament,DraftKings Marketplace introduced the Primetime NFT Series, which was designed to deepen engagement withDraftKings during this iconic sports moment. DraftKings’ Primetime NFT Series collection included the first DraftKings NFTs built in-house, which received cross product utility and bonuses available only in theDraftKings ecosystem. The Company intends to develop additional proprietary NFTs tied to significant moments (e.g., leagues, players and events) throughout the sports calendar. DraftKings recently teamed up with Metabilia, a memorabilia and NFT company operating at the forefront of physical and digital collectibles, which became the latest NFT supplier onDraftKings Marketplace . The collaboration introduces “Membership NFTs” for fans to chronicle the careers of top young players and will feature star major leaguers beginning withVladimir Guerrero Jr .,Ronald Acuña Jr .,Shane Bieber , Wander Franco,Joe Musgrove , and Fernando Tatís Jr. This debut collection dropped onMay 4, 2022 exclusively onDraftKings Marketplace .- For
Daily Fantasy Sports ,DraftKings added additional leagues to its portfolio of contest offerings, including the international auto racing league Formula 1 and the new USFL. - DraftKings Social launched betting groups, which allow customers a seamless way to collaborate within the sports betting experience.
DraftKings customers can now create a group and distribute a link for others to join. Once the group is created, all actions of the members who elected to share their bets will be dropped into the group in real time, notifying group members with a link directly to that new bet. DraftKings continued to build out its media vertical, including content agreements with prominent voices within the sports industry, such as former ESPN host and commentatorMike Golic Sr ., Meadowlark Media personalityJessica Smetana , and championship-winning NFL executiveMichael Lombardi . Most recently, popular baseball personality and content creatorJared Carrabis and former Notre Dame Football player and television personalityMike Golic Jr . joinedDraftKings . Each of these agreements brings exclusive content, such as podcasts and in-depth commentary, which can only be found atDraftKings .
Environmental, Social and Governance Initiatives
- In January,
DraftKings announced the one-of-a-kind State Council Funding Program, which is a more than$1.5 million multi-year financial commitment to assist the 35 state problem gambling councils. As part of the initiative, state councils may receive$15,000 per year for three years to spend on responsible gaming services and programs to address the most pressing needs within their organizations. - In April,
DraftKings published its second sustainability report providing insights into the Company’s commitment to environmental, social and governance (“ESG”) initiatives. Highlights of the report include:- DraftKings’ work in environmental sustainability, which centered on funding the planting of 1 million trees in coordination with the
Arbor Day Foundation . The tree plantings in theU.S. alone are estimated to contribute to more than 667,000 metric tons of carbon avoided and sequestered, 2,800 tons of air pollution avoided and removed, and 699 million gallons of runoff avoided. - The Company’s further investment in evidence-based research for responsible gaming, including the funding of the International Center for Responsible Gaming’s inaugural research on sports betting in the
U.S. and the Kindbridge Research Institute’s study of military veterans impacted by problem gaming.
- DraftKings’ work in environmental sustainability, which centered on funding the planting of 1 million trees in coordination with the
Webcast and Conference Call Details
The conference call may be accessed by dialing (866) 374-5140. Once connected with the operator, please provide the conference ID of 27620336.
A live audio webcast of the earnings conference call will be available on the Company’s website at investors.draftkings.com, along with a copy of this press release, the Company’s Quarterly Report on Form 10-Q, and a slide presentation. The audio webcast and accompanying presentation will be available on the Company’s investor relations website until
Non-GAAP Financial Measures
This press release includes Adjusted EBITDA, which is a non-GAAP financial measure that
The table below presents the Company’s Adjusted EBITDA reconciled to its net loss, which is the most directly comparable financial measure calculated in accordance with
| Three months ended | ||||||
(amounts in thousands) | 2022 | 2021 | |||||
Net loss | $ | (467,693 | ) | $ | (346,344 | ) | |
Adjusted for: | |||||||
Depreciation and amortization (1) | 32,225 | 28,193 | |||||
Interest income, net | (148 | ) | (985 | ) | |||
Income tax provision (benefit) | 469 | (4,595 | ) | ||||
Stock-based compensation (2) | 187,077 | 151,843 | |||||
Transaction-related costs (3) | 3,774 | 3,023 | |||||
Litigation, settlement, and related costs (4) | 1,950 | 622 | |||||
(Gain) loss on remeasurement of warrant liabilities | (12,681 | ) | 26,980 | ||||
Other non-recurring costs and non-operating (income) costs (5) | (34,482 | ) | 2,001 | ||||
Adjusted EBITDA | $ | (289,509 | ) | $ | (139,262 | ) |
(1) The amounts include the amortization of acquired intangible assets of
(2) Primarily reflects stock-based compensation expenses resulting from the issuance of awards under long-term incentive plans.
(3) Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with pending or completed transactions and offerings.
(4) Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to the Company’s core business operations.
(5) Primarily includes the change in fair value of certain financial assets, as well as the Company’s equity method share of the investee’s losses and other costs relating to non-recurring items.
Information reconciling forward-looking fiscal year 2022 Adjusted EBITDA guidance to its most directly comparable
About
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements about the Company and its industry that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release, including statements regarding guidance, our future results of operations or financial condition, our strategic plans and focus, user growth and engagement, product initiatives, the objectives of management for future operations, and the impact of COVID-19 on the Company’s business and the economy as a whole, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “propose,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions.
You should not rely on forward-looking statements as predictions of future events.
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