DraftKings stock jumps after betting company reports third-quarter beat, surge in users

Tech

The entrance from the elevators, designed to resemble a tunnel entering a stadium, is pictured at the new DraftKings office in Boston on March 25, 2019.

David L. Ryan | The Boston Globe via Getty Images

Shares of sports betting company DraftKings jumped 6% in premarket trading Friday after the company reported better-than-expected third quarter results and a surge in users.

Here are the results:

  • Loss per share: 57 cents, vs 61 cents expected, according to a Refinitiv survey of analysts
  • Revenue: $133 million, vs $132 million expected, according to Refinitiv

The company said its monthly unique payers surpassed 1 million, a 64% increase compared to the same quarter a year ago.

“The resumption of major sports such as the NBA, MLB and the NHL in the third quarter, as well as the start of the NFL season, generated tremendous customer engagement,” DraftKings CEO Jason Robins said in a press release.

DraftKings spent millions last quarter on its partnerships, including with Michael Jordan in an equity deal, the New York Giants, Chicago Cubs, Turner Sports and ESPN.

The company had been looking to increase its brand exposure as it fought to gain market share in the growing sports betting landscape. Currently, 19 states, plus Washington D.C., allow online sports betting. Six states legalized sports wagering but are not yet operational, while two states are working on legislation to allow betting.  

The company also raised its fiscal year 2020 guidance to a range of $540 to $560 million, from a range of $500 to $540 million. DraftKings said it expects $750 million to $850 million in revenue for 2021.

DraftKings in April combined with Diamond Eagle Acquisition Corp., a special purpose acquisition company (SPAC), and gaming technology provider SBTech to make its public debut. The company’s stock has gained 285.51% this year as of Thursday’s close.

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