On a like-for-like basis, revenue for the three months to 31 December 2020 grew 146.1% year-on-year to $322.2m. If prior year figures from Diamond Eagle Acquisition Corp (DEAC) and SBTech were factored in, revenue grew 98.2% on a proforma basis.
The combination with special purpose acquisition company DEAC and SBTech saw DraftKings list on the Nasdaq Stock Exchange in April 2020.
DraftKings chief executive Jason Robins explained that a favorable sporting calendar in Q4, as well as strong marketing execution, helped the operator generate “tremendous” customer acquisition and engagement.
“In the fourth quarter of 2020, we saw [Monthly Unique Players (MUPs)] increase 43.9% to 1.5m and [average revenue per monthly unique player (ARPMUP)] increase 54.8% to $65,” he said.
The fourth quarter saw the business continue to expand, rolling out mobile betting in Tennessee. DraftKings noted that the state had the best two-month launch in the US to date, with over $300m staked across November and December.
A number of commercial and strategic agreements were also struck during the quarter. Perhaps most notable among these was an agreement with the Mashantucket Pequot Tribal Nation and Foxwoods Resorts Casino that sees the brand gain access to Connecticut’s sports betting market when regulation permits.
On the B2C side, it also announced agreements with Turner Sports, the Philadelphia Eagles, the Detroit Pistons, Nashville Predators and its first golf partnership, with professional player Bryson DeChambeau.
The legacy SBTech B2B business, meanwhile, rolled out a new sportsbook for PalaceBet, a brand operated by South Africa’s Peermont Hotels, Gaming and Resorts, and extended its partnership with Mansion Group’s MansionBet brand.
However, the business’ rapid growth was accompanied by a sharper rise in operating costs. Expenditure more than doubled across all segments, including marketing spend of $192.0m (up 205.3%); cost of revenue jumping 142.9% to $159.3m; and product and technology expenses growing from $7.4m in the prior year to $66.1m.
This resulted in the business’ operating loss widening to $268.3m. Adjusted loss before interest, tax, depreciation and amortisation, meanwhile, came to $87.9m. Once financial items and income taxes were factored in, DraftKings’ net loss for the fourth quarter came to $266.4m.
The operator’s strong fourth quarter performance has prompted it to raise its 2021 revenue guidance from a range of $750m to $850m, to the $900m to $1bn range.
This, it said, was based on its 2020 growth, coupled with new state launches – such as Michigan and Virginia – in January 2021, and the assumption that all scheduled sporting seasons could run without interruption.
Should 2021 revenue fall within this range, it would suggest year-on-year growth of between 39.9% and 55.4% from the $643.5m generated in the 2020 calendar year.