This is a seminal moment in the company’s history, with DraftKings’ non-GAAP earnings per share increasing by 14 cents, and once again – defying analyst forecasts which had the company posted as likely to lose 14 cents of its earnings per stock. This did not materialize, after EBITDA in the second quarter ended on June 30 increased by 88% to $875 million, well ahead of the initial expectations of $772.9 million posted by analysts.
Massachusetts Defies Expectations, Shows Strength
This defying move was not only DraftKings’ refuting sceptic analysts, but it also achieved the company’s first profitable quarter. In a time when access to easy money loaned on the promise of delivering future shareholder value is diminishing, turning a company profitable is very important.
Jason Robins commented on the results in a statement and said that this was just a beginning and a harbinger of better times to come for the company. The chief executive had this to say in an official statement:
The positive Adjusted EBITDA that we generated in the second quarter exceeded our guidance, and we are well on our way to achieving positive Adjusted EBITDA again in the fourth quarter of 2023 and for the fiscal year 2024 and beyond.
DraftKings CEO Jason Robins
However, Robinson did caution that the third quarter is unlikely to deliver similarly strong results due to the lack of professional sports in the period. There are few events in and between to bet on, and in the United States in particular, this is just Major League Baseball. The third quarter has brought some run-ins with the sports betting regulators in Massachusetts as well, but those are unlikely to have a strong bearing on the quarterly results.
Starting in late August and early September there will be a trickle of sports betting events, but not enough to drive strong quarterly results. However, Robinson and DraftKings are fairly certain that the company can start working towards profitability again in the fourth quarter.
DraftKings’ Long-Term Resilience to Be Tested in Q4 2023
A one-off profitable quarter, though, is not a sufficient basis to predict better times across the board. DraftKings has already boosted its revenue guidance, expecting anything between $3.46 billion and $3.54 billion, a significant step up from the $3.13 billion and $3.23 billion range previously made available by the company.
DraftKings is confident that it can boost its revenue thanks to its operations in Puerto Rico and Kentucky. Presently, the company offers online sports gambling in 21 states and has access to 44% of the US population. It’s also live in five states that run iGaming products, that is online casino titles.
DraftKings’ results are in part strong as the company decide to not spend money on acquiring PointsBet US’s assets and let Fanatics Sportsbook buy out the company instead.