DraftKings Inc. (Nasdaq: DKNG) (“DraftKings” or the “Company”)
today reported fourth quarter and full-year 2020 financial results.
Fourth Quarter 2020 Highlights
For the three months ended December 31, 2020, DraftKings
reported revenue of $322 million, an increase of 146% compared to
$131 million during the same period in 2019. 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 grew 98% compared to the three months ended December 31,
2019.
“With a favorable fourth quarter sports calendar and strong
marketing execution, DraftKings was able to generate tremendous
customer acquisition and engagement that propelled us to $322
million in fourth quarter revenue, a 98% year over year increase,”
said Jason Robins, DraftKings’ co-founder, CEO and Chairman of the
Board. “In the fourth quarter of 2020, we saw MUPs increase 44% to
1.5 million and ARPMUP increase 55% to $65. We are raising our
revenue outlook for 2021 due to our expectation for continued
growth, the outperformance of our core business and newly launched
states that were not included in our previous guidance.”
Favorable Sports Calendar and Strong Customer Engagement
Drove Q4 Results
- Monthly Unique Payers (“MUPs”) for
our B2C segment increased 44% compared to the fourth quarter of
2019. On average, 1.5 million monthly unique paying customers
engaged with DraftKings each month during the fourth quarter. The
increase reflects strong unique payer retention and acquisition
across DFS, OSB and iGaming. For 2020, MUPs increased 29%, which
includes the impact of COVID-19 on our MUPs for Sportsbook and DFS
primarily during the second quarter and early in the third
quarter.
- Average Revenue per MUP (“ARPMUP”)
was $65 in the fourth quarter representing a 55% increase versus
the same period in 2019. Our ARPMUP was positively impacted by
increased engagement with our iGaming and mobile sports betting
product offerings as well as successful cross-selling. For 2020,
ARPMUP increased 29%.
Increasing 2021 Revenue Guidance
- DraftKings is raising its fiscal year 2021 revenue guidance
from a range of $750 million to $850 million to a range of $900
million to $1 billion, which equates to year-over-year growth of
40% to 55% and a 19% increase compared to the midpoint of our
previous guidance.
- The increase reflects strong performance in the fourth quarter
of 2020, substantial user activation due to the effectiveness of
our 2020 marketing spend, and the launch of mobile sports betting
and iGaming in Michigan and mobile sports betting in Virginia. This
guidance also assumes that all professional and college sports
calendars that have been announced come to fruition and that we
continue to operate in states in which we are live today.
- Detailed financial data and other
information for the fourth quarter and full-year 2020 is available
in DraftKings’ Annual Report on Form 10-K, being filed today with
the Securities and Exchange Commission (the “SEC”), as well as in a
slide presentation that can be accessed through the “Investors”
section of the Company’s website at investors.draftkings.com.
DraftKings Grows Its Nation-Leading Mobile Sports
Betting and iGaming Footprint
DraftKings expanded its footprint to include mobile sports
betting in Tennessee in the fourth quarter of 2020. In 2021,
DraftKings launched mobile sports betting and iGaming in Michigan
and mobile sports betting in Virginia.
- In November, DraftKings launched
mobile sports betting in Tennessee. The state of Tennessee had the
best two month launch in U.S. sports betting history with over $300
million in handle in its first two months of operation including
38% month-over-month growth in December.
- On January 1, 2021, DraftKings began
mobile registration in Iowa according to state regulations. By 3PM
ET on January 5, DraftKings registered more customers via mobile
registration than through the entirety of 2020.
- Following successful launches in
Michigan and Virginia in 2021 (combined these states represent 6%
of the U.S. population), DraftKings is now live with mobile sports
betting in 12 states, which is more than any other company in the
industry. These 12 states together represent 25% of the U.S.
population, a position that DraftKings has achieved less than three
years after the Supreme Court struck down the Professional and
Amateur Sports Protection Act of 1992.
- In 2021, 19 state legislatures have
introduced legislation to legalize online sports betting, five
state legislatures have introduced legislation to expand their
existing sports wagering frameworks and one state legislature has
introduced legislation to legalize sports betting limited to retail
locations. In addition, four states have introduced iGaming
legislation and two states have introduced online poker
legislation.
Commercial and Strategic Agreements
DraftKings announced several advantageous commercial and
strategic agreements in the fourth quarter that are expected to
provide the Company with access to unique and valuable content,
intellectual property and marketing assets, including:
- a multi-channel deal with the
Mashantucket Pequot Tribal Nation and Foxwoods Resorts Casino,
which would provide DraftKings with access for online sports
betting ahead of the anticipated launch of legal sports betting in
Connecticut, subject to necessary legislative and regulatory
approvals. As part of the deal, DraftKings also became the official
daily fantasy sports partner of Foxwoods Resort Casino;
- a multi-year agreement with Turner
Sports, making DraftKings the exclusive sportsbook and daily
fantasy sports provider across select Turner Sports and Bleacher
Report properties, excluding NBA programming;
- an agreement with Triller which
allowed DraftKings to be the “Official Sports Betting and Fantasy
Sports Partner” of the boxing match between Mike Tyson and Roy
Jones Jr.;
- a multi-year deal with the
Philadelphia Eagles, making DraftKings the Official Daily Fantasy
Sports Partner and Official Sports Betting Partner of the
team;
- an exclusive, multi-year
relationship with Bryson DeChambeau, who became the first active
professional golfer to represent DraftKings via an integrated
brand, content, marketing, and VIP centric collaboration;
- an agreement with the Detroit
Pistons, making DraftKings the team’s exclusive Official Daily
Fantasy Sports Partner, as well as an Official Sports Betting and
Casino Partner;
- a multi-year deal with the Nashville
Predators, making DraftKings the Official Daily Fantasy Sports
Partner and an Official Sports Betting Partner of the team;
- the successful launch of a mobile
and online iGaming and sportsbook platform for PalaceBet
(PalaceBet.co.za) in South Africa, powered by DraftKings’
cutting-edge B2B sports betting and iGaming technology;
- the renewal and extension of our
relationship with MansionBet, the Gibraltar-based sport betting
brand of the Mansion Group, which will see DraftKings’ B2B
technology continue to power the tier one operator’s sportsbook and
casino platform; and
- an agreement with InComm Payments to
launch an industry-first retail gift card. The launch enables
consumers to gift the DraftKings experience to others in $25 and
$50 denominations and expands our brand across retail locations
nationwide.
Product, Technology and Content
DraftKings’ migration to SBTech continues to be on-track for
completion by the end of third quarter of 2021. We also continued
to invest in our products and create engaging content:
- maintained the highest DFS app store
ratings for both iOS and Android as well as the highest iOS rating
for Casino and Sportsbook. As of March 1, 2021, Google is expanding
the number of countries where developers can publish licensed real
money gaming apps to include the United States. DraftKings’
Sportsbook and Casino apps will be available to download for
Android users via the Google Play Store;
- announced a multi-year agreement to
become a primary sponsor of the Center for Gaming Innovation,
housed within the International Gaming Institute (IGI) at the
University of Nevada, Las Vegas (UNLV); and
- developed an original concept show,
B/R Drop Zone: DraftKings Big Game Prop Reveal, that provided
football fans with an exclusive first glimpse at DraftKings’
proprietary Super Bowl prop bets in a new reveal show which
streamed live on the Bleacher Report app.
Environmental, Social and Governance
Initiatives
DraftKings raised and donated over $1.6 million to charity
through a variety of ESG-related initiatives in 2020. Fourth
quarter 2020 and first quarter 2021 highlights include:
- published our first ESG report on
February 22, 2021 outlining our views on environmental, social and
governance factors and highlighting those factors that are most
relevant to our business;
- raised $113,000 to help fund breast
cancer research in collaboration with the Larry Fitzgerald
Foundation through the second-annual DraftKings Pink ‘Em
initiative, a month-long philanthropic effort that featured four
charity contests on each NFL Sunday in October. More than 385,000
DraftKings customers participated throughout Breast Cancer
Awareness Month this season;
- raised $183,000 through charity DFS
contests in support of the Company’s Tech for Heroes initiative,
which provides recent and returning veterans and their spouses with
free, high-tech skills training in areas like front end web
development and cybersecurity; and
- raised $180,000 through charity DFS
contests in support of the Community Foundation of Middle
Tennessee, which created the Neighbor’s Fund in response to the
Christmas Day explosion that occurred in downtown Nashville,
Tennessee.
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 fourth quarter results 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 8266709.
A live audio webcast of the earnings conference call may be
accessed 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 15,
2021.
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 50+
operators in 17 countries. DraftKings’ Sportsbook is live with
mobile and/or retail betting operations in the United States
pursuant to regulations in Colorado, Illinois, Indiana, Iowa,
Michigan, Mississippi, New Hampshire, New Jersey, New York, Oregon,
Pennsylvania, Tennessee, Virginia and West Virginia. DraftKings’
daily fantasy sports product is available in 8 countries
internationally with 15 distinct sports categories. DraftKings is
the official daily fantasy partner of the NFL, MLB, NASCAR and the
PGA TOUR as well as an authorized gaming operator of the NBA and
MLB and an official betting operator of the PGA TOUR.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, about us and
our industry that involve substantial risks and uncertainties. All
statements other than statements of historical facts contained in
this press release, including statements regarding guidance, our
future results of operations or financial condition, our strategic
plans and focus, user growth and engagement, product initiatives,
the objectives of management for future operations, and the impact
of COVID-19 on our business and the economy as a whole, are
forward-looking statements. In some cases, you can identify
forward-looking statements because they contain words such as
“anticipate,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “forecast,” “going to,” “intend,” “may,”
“plan,” “potential,” “predict,” “project,” “propose,” “should,”
“target,” “will,” or “would” or the negative of these words or
other similar terms or expressions. We caution you that the
foregoing may not include all of the forward-looking statements
made in this press release.
You should not rely on forward-looking statements as predictions
of future events. We have based the forward-looking statements
contained in this press release primarily on our current
expectations and projections about future events and trends,
including the ongoing COVID-19 pandemic, that we believe may affect
our business, financial condition, results of operations, and
prospects. These forward-looking statements are not guarantees of
future performance, conditions or results, and involve a number of
known and unknown risks, uncertainties, assumptions and other
important factors, many of which are outside DraftKings’ control,
that could cause actual results or outcomes to differ materially
from those discussed in the forward-looking statements. Important
factors, among others, that may affect actual results or outcomes
include, but are not limited to, DraftKings’ ability to manage
growth; DraftKings’ ability to execute its business plan and meet
its projections; potential litigation involving DraftKings; changes
in applicable laws or regulations, particularly with respect to
gaming; general economic and market conditions impacting demand for
DraftKings’ products and services; economic and market conditions
in the media / entertainment / gaming / software industry in the
markets in which DraftKings’ operates; the potential adverse
effects of the COVID-19 pandemic on capital markets, general
economic conditions, unemployment and DraftKings’ liquidity,
operations and personnel, as well as the risks, uncertainties, and
other factors described in “Risk Factors” in our filings with the
SEC, which are available on the SEC’s website at www.sec.gov.
Additional information will be made available in other filings that
we make from time to time with the SEC. The forward-looking
statements contained herein are based on management’s current
expectations and beliefs and speak only as of the date hereof, and
DraftKings makes no commitment to update or publicly release any
revisions to forward-looking statements in order to reflect new
information or subsequent events, circumstances or changes in
expectations.
Contacts
Media:
Media@draftkings.com
@DraftKingsNews
Investors:
Investors@draftkings.com
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