DraftKings ends 2020 with strong fourth quarter performance with 98% revenue growth

DraftKings' annual revenue for 2020 is up 49.0% after the daily fantasy and sports betting operator ended the year nearly doubling revenue in the fourth quarter, although expenses also increased significantly.

On a comparable basis, revenue for the three months to 31 December 2020 rose 146.1% year-on-year to $322.2m. When Diamond Eagle Acquisition Corp (DEAC) and SBTech data for the previous year are taken into account, revenue grew 98.2% on a pro forma basis.

As a result of the merger with DEAC and SBTech, DraftKings was listed on the Nasdaq stock exchange in April 2020.


DraftKings CEO Jason Robins explained that a favourable sports calendar in the fourth quarter, as well as a successful marketing push, helped the operator attract a "huge" number of customers and engage them.

According to https://casino-utan-svensk-licens.info/, [monthly unique players (MUP)] increased by 43.9% to 1.5 million in the fourth quarter of 2020, while [average revenue per monthly unique player (ARPMUP)] increased by 54.8% to $65.

Business continued to expand in the fourth quarter, with mobile betting in Tennessee. DraftKings said the state had its best two-month run in the US to date, with more than $300 million invested for November and December.

A number of commercial and strategic agreements were also made during the quarter. Perhaps most notable of these was an agreement with Mashantucket Pequot Tribal Nation and Foxwoods Resorts Casino, under which the brand will gain access to the Connecticut sports betting market when permitted by law.

On the B2C side, it has also announced agreements with Turner Sports, Philadelphia Eagles, Detroit Pistons, Nashville Predators and its first golf partnership with professional golfer Bryson DeChambeau.

Meanwhile, the legacy SBTech B2B business launched a new betting business for PalaceBet, a brand operated by South Africa's Peermont Hotels, Gaming and Resorts, and expanded its partnership with the MansionBet Mansion Group brand.

However, the rapid growth of the business was accompanied by a sharp increase in operating costs. Costs across all segments more than doubled, including marketing costs of $192.0 million (up 205.3%); cost of revenue rose 142.9% to $159.3 million; and product and technology costs rose from $7.4 million in the previous year to $66.1 million.

This increased the company's operating loss to $268.3 million. Meanwhile, the adjusted loss before interest, taxes, depreciation and amortisation amounted to $87.9 million. Including finance items and income taxes, DraftKings posted a net loss of $266.4 million for the fourth quarter.

The operator's strong performance in the fourth quarter prompted it to raise its revenue forecast for 2021 from $750 million to $850 million to $900 billion to $1 billion.

This, he said, was based on its growth in 2020 combined with the launch of new states such as Michigan and Virginia in January 2021, as well as the assumption that all scheduled sports seasons could run uninterrupted.

If revenue in 2021 falls into this range, it would suggest a 39.9 per cent to 55.4 per cent year-on-year increase from the $643.5m generated in calendar year 2020.

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