DraftKings Reports Fourth Quarter Revenue of $473 Million; Increases 2022 Revenue Guidance to $1.85 Billion to $2.0 Billion; Introduces 2022 Adjusted EBITDA Guidance
2022-02-18 07:00:02 AM ET (GlobeNewswire)
DraftKings Inc. (Nasdaq: DKNG) ("DraftKings" or the "Company") today reported fourth quarter and full-year 2021 financial results.
Fourth Quarter and Full-Year 2021 Highlights
For the three months ended December 31, 2021, DraftKings reported revenue of $473 million, an increase of 47% compared to $322 million during the same period in 2020. Fourth quarter 2021 revenue exceeded the guidance previously provided by the Company during its third quarter earnings conference call on November 5, 2021 by 8%. After giving pro forma effect to the business combination with SBTech (Global) Limited ("SBTech") and Diamond Eagle Acquisition Corp. which was completed on April 23, 2020, as if it had occurred on January 1, 2019, revenue for the year ended December 31, 2021 grew 101% compared to the year ended December 31, 2020.
"DraftKings' strong fourth quarter performance exceeded our expectations on the top and bottom line," said Jason Robins, DraftKings' co-founder, Chief Executive Officer and Chairman of the Board. "Our excellent quarter capped off a year in which five of our states were Contribution Profit positive, further demonstrating the effectiveness of our state playbook and supporting our positive view of the industry's TAM. We enter 2022 positioned to grow our market share, further optimize our user experience and continue to strengthen our multi-product suite of offerings."
Jason Park, DraftKings' Chief Financial Officer, added, "We grew revenue 47% year-over-year to $473 million in the fourth quarter despite lower-than-expected hold in October primarily due to NFL game outcomes. Our key performance indicators reflected excellent player retention, acquisition and cross-selling in the quarter, as Monthly Unique Payers increased by 32% and Average Revenue Per Monthly Unique Payer grew by 19%. 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 negative $825 million to $925 million."
Continued Healthy Growth in Player Retention, Acquisition and Engagement
Increasing Midpoint of 2022 Revenue Guidance and Introducing 2022 Adjusted EBITDA Guidance
Expanded Mobile Sports Betting and iGaming Footprint
Product Expansion and Innovation and Rewards Program
Commitment to Responsible Gaming
Webcast and Conference Call Details
DraftKings will host a conference call and audio webcast today at 8:30 a.m. EST, during which management will discuss the Company's results for the quarter and provide commentary on business performance. A question and answer session will follow the prepared remarks.
The conference call may be accessed by dialing (833) 644-0686 for domestic callers or (918) 922-6762 for international callers. Once connected with the operator, please provide the conference ID of 4084568.
A live audio webcast of the earnings conference call will be available on the Company's website at investors.draftkings.com, along with a copy of this press release, the Company's Form 10-K filing, and a slide presentation. The audio webcast and accompanying presentation will be available on the Company's investor relations website until 11:59 p.m. EST on March 14, 2022.
Non-GAAP Financial Measures
This press release includes Contribution Profit and Adjusted EBITDA, which are non-GAAP performance measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe Contribution Profit and Adjusted EBITDA are useful in evaluating our operating performance, similar to measures reported by our publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Contribution Profit and Adjusted EBITDA are not intended to be substitutes for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
We define and calculate Contribution Profit as gross profit less external marketing expenses. We define and calculate Adjusted EBITDA as net loss before the impact of interest income or expense, income tax expense or benefit, depreciation and amortization, and further adjusted for the following items: stock-based compensation, transaction-related costs, non-core litigation, settlement and related costs, non-recurring advocacy and other related legal expenses, remeasurement of warrant liabilities, and certain other non-recurring, non-cash or non-core items.
We include these non-GAAP financial measures because they are used by management to evaluate our core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA excludes certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of depreciation, amortization, remeasurement of warrant liabilities and stock-based compensation), or are not related to our underlying business performance (for example, in the case of interest income and expense and litigation settlement and related costs).
Information reconciling forward-looking Contribution Profit and Adjusted EBITDA to U.S. GAAP financial measures is unavailable to DraftKings without unreasonable effort. DraftKings is not able to provide reconciliations of Contribution Profit and Adjusted EBITDA to U.S. GAAP financial measures because certain items required for such reconciliations are outside of DraftKings' control and/or cannot be reasonably predicted. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with U.S. GAAP, and such forward-looking financial statements are unavailable to the company without unreasonable effort. DraftKings provides a range for its Adjusted EBITDA forecast that it believes will be achieved, however it cannot accurately predict all the components of the Adjusted EBITDA calculation. DraftKings provides a Contribution Profit and an Adjusted EBITDA forecast because it believes that Con tribution Profit and Adjusted EBITDA, when viewed with DraftKings' results under U.S. GAAP, provides useful information for the reasons noted above. However, Contribution Profit and Adjusted EBITDA is not a measure of financial performance or liquidity under U.S. GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity.
About DraftKings
DraftKings Inc. is a digital sports entertainment and gaming company created to fuel the competitive spirit of sports fans with products that range across daily fantasy, regulated gaming and digital media. Headquartered in Boston, and launched in 2012 by Jason Robins, Matt Kalish and Paul Liberman, DraftKings is the only U.S.-based vertically integrated sports betting operator. DraftKings is a multi-channel provider of sports betting and gaming technologies, powering sports and gaming entertainment for operators in 17 countries. DraftKings' Sportsbook is live with mobile and/or retail betting operations in the United States pursuant to regulations in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Tennessee, Virginia, West Virginia, and Wyoming. DraftKings' daily fantasy sports product is available in 6 countries internationally with 15 distinct sports categories. DraftKings i s both an official daily fantasy and sports betting partner of the NFL, NBA, MLB, NHL, PGA TOUR and UFC as well as an official daily fantasy partner of NASCAR. Launched in August 2021, DraftKings Marketplace is a digital collectibles ecosystem designed for mainstream accessibility that offers curated NFT drops and supports secondary-market transactions. DraftKings also owns Vegas Sports Information Network, Inc. (VSiN), a multi-platform broadcast and content company.
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