DraftKings does not anticipate an impact to its long-term plans due to COVID-19, as the Boston, Massachusetts, headquartered firm lauds the return of major sports in the US as losses widen.
Adding over $800m to its balance sheet and ending the second quarter with over $1.2bn in cash and no debt, revenue for the three month period to June 30, 2020, dropped 23.5 per cent from $57.3m to $70.9m year-on-year.
DraftKings said it had a loss of $161.4m, or 55 cents a share, during the period, as opposed to the loss of $28.1m, or 15 cents a share, posted during the same period a year earlier.
For the first six months of the year revenue increased 27 per cent to $159.4m (2019: $125.4m) year-on-year, with a loss of $230.1m, or 97 cents a share, as opposed to a loss of $57.6m, or 31 cents a share, in 2019.
On a pro forma basis, including the effect of the company’s business combination with SBTech and Diamond Eagle Acquisition as if it had been completed on January 1, 2019, revenue would have been $75m during Q2, compared to $83m during the same period a year earlier.
As sporting events began to resume, the company reported an increased engagement with its sports-based product offerings, which contributed to sequential monthly revenue improvement during the second quarter. This positive momentum is said to have accelerated with the return of MLB, the NBA, WNBA, the NHL, and MLS.
Furthermore, the company is also introducing fiscal year 2020 pro forma revenue guidance of $500m to $540m, which equates to year-over-year growth of 22 per cent to 37 per cent in the second half of 2020.
However, this assumes that the professional sports calendar remains as currently contemplated and that DraftKings operates in the states in which it’s currently live.
“We believe that the best product will ultimately win with the American consumer,” said Jason Robins, DraftKings co-founder, CEO and chairman of the board. “As a technology first organisation, we will continue to focus on bringing new and innovative products to market that strengthen our engagement with customers and maintain our competitive differentiation.”