Shares of DraftKings (DKNG) Trade Up Following Strong 2Q Report
By Michael Elkins
Shares of DraftKings Inc. (NASDAQ:DKNG) are up more than 12% in mid-day trading Friday after the company reported 2Q results and offered forward-looking commentary during the earnings call.
The sports betting company reported 2Q revenue of $466 million, an increase of 57% compared to $298 million during the same period in 2021. Both revenue and Adjusted EBITDA outperformed the midpoints of their respective guidance ranges for the second quarter of 2022.
“DraftKings had an excellent second quarter, exceeding expectations for revenue and Adjusted EBITDA,” Jason Robins, DraftKings’ CEO said during the earnings call. “Customer engagement remains strong, and we continue to see no perceivable impact from broader macroeconomic pressures. Due to our ongoing investments in core online gaming technologies, we are in a strong position from a competitive perspective as we approach the beginning of the NFL season. We remain well capitalized, ready to enter new markets as they become live, and confident in our ability to compete and win with customers.”
A Needham analyst said in a note that he sees DKNG as “a leader in the emerging North America online gambling market.” He believes that “DKNG has a sustainable customer acquisition strategy that should continue to drive its first- or second-place position in all states.”
DraftKings raised its fiscal year 2022 revenue guidance to a range of $2.08 billion-$2.18 billion from the previous range of $2.055 billion-$2.175 billion. This updated 2022 revenue guidance range equates to year-over-year growth of 60% to 68%.
EBITDA guidance for the year was also improved to a loss of between $765 million and $835 million from its prior FY 2022 Guidance of a loss of between $810 million and $910 million.