DraftKings experiences significant year-over-year revenue growth and losses in 2021

Image source: DraftKings

ProjectKings Inc released what it described as “better than expected” fourth quarter and full year 2021 financial results, reporting significant year-over-year growth in both measurement periods.

But while revenue improved year-over-year in both the fourth quarter and the full year, shareholders will be uneasy with mounting net losses of $1.523 billion in 2021 (2020: $1.231 billion) as the company continues to pay heavily to earn short-term revenue.

For the fourth quarter, ending December 31, 2021, DraftKings reported revenue of $473 million, a 47% improvement from $322 million in the fourth quarter of 2020. Fourth quarter revenue also improved. exceeded the previous forecast given during the third quarter earnings call by 8%.

The company noted that its monthly unique payers (MUPs) for its B2C segment increased by 32% to 1.971 million (Q4 2020: 1.498 million). On average, 2 million MUP customers engaged with DraftKings in each month of Q4.

Its average revenue per MUP (ARPMUP) for the fourth quarter was $77, a 19% increase from the fourth quarter of 2020. DraftKings said its ARPMUP benefited from an ongoing mix shift in its product offerings sports betting and igaming and cross-selling its customers to more products.

For the full year, revenue increased 101% to $1.296 billion from $614.5 million in 2020. Following market launches in New York and Louisiana in January, the company now offers live mobile sports betting in 17 states and gambling in five.

DraftKings MUPs for 2021 were 1.494 million (2020: 883,000) with an ARPMUP of $67 (2020: $51). The company attributes the improvement to strong retention and acquisition of single payers across its product offerings, expansion into new states, and major sporting events that are not impacted by COVID-19 to the same degree as in 2020.

“DraftKings’ strong performance in the fourth quarter exceeded our expectations for revenue and earnings,” said Jason Robinco-founder, CEO and chairman of the board.

“Our strong quarter capped off a year in which five of our states made a positive contribution to earnings, further demonstrating the effectiveness of our state playbook and supporting our positive view of the industry’s TAM. We enter 2022 well positioned to grow our market share, further optimize our user experience and continue to strengthen our suite of multi-product offerings. »

DraftKings also noted that it expects to improve profitability over time (excluding the impact of amortization of acquired intangibles) through cost synergies and new opportunities driven by its completed vertical integration of technology and of the expertise of SBTech (Global) Limited which was acquired in April 2020.

Financial director Jason Park said, “We grew revenue 47% year-over-year to $473 million in the fourth quarter despite a weaker-than-expected hold in October, primarily due to NFL game results.

“Our key performance indicators reflected excellent player retention, acquisition and cross-selling during the quarter, as monthly single payers increased by 32% and average revenue per monthly single payer increased by 19 %.”

Due to revenue growth in 2021, DraftKings is adjusting its revenue projections for 2022, taking into account the launch of mobile sports betting in New York and Louisiana in January. It also introduced a 2022 guidance for adjusted EBITDA.

Park added, “We are increasing the midpoint of our 2022 revenue guidance to $1.93 billion given new state launches and strong underlying performance trends and introducing guidance for Adjusted EBITDA of 825 at negative $925 million.”