Rovell: DraftKings Earnings Up Nearly 25% In Second Quarter of 2020
Denise Truscello/Getty Images for DraftKings.
DraftKings' revenue for the three months ending on June 30, despite no basketball, baseball or hockey, was up nearly 25% versus the same quarter last year, the company announced in its earnings release on Friday morning.
The company expects to bring in between $500 million and $540 million this calendar year, representing a jump of between 22% and 37%.
In New Jersey, four of the highest handle days for the NBA came in the first five days of play. And six PGA Tour events and the second version of The Match all topped DraftKings previous the golf handle record from the 2019 U.S. Open.
And while the Big Ten and Pac-12 won’t attempt to play football this calendar year, DraftKings said it does not foresee being impacted substantively long term from COVID-19. The guidance did not project any revenue for college football.
The company has plenty of money to weather the storm, boasting $1.2 billion in cash.
In a competitive environment, where DraftKings is either No. 1 or No. 2 in market share in states it has entered, the company has spent a lot of money to gain traction, both in technology and marketing. In the first half of the year, the company lost $226 million, according to the financials reported Friday morning.
"I think you always have an advantage when you are first, but we do believe that over time you have to build a product that is more differentiable and is a great experience," DraftKings CEO Jason Robins told The Action Network. "We only bought into having our own software in April (with the business combination of SB Tech) so we obviously have a big investment into doing what we can do to be different. We believe it's going to be hard to catch up to us. We have almost 1,000 engineers now."
DraftKings operates in 10 states, including newly added Colorado and Illinois. Its business is mostly online, but it has eight retail locations, including a newly added casino sportsbook in New Hampshire.
Robins said the next priorities for the company are Michigan, Tennessee and Virginia, which represent 8% of the U.S. population.
Based on its stock price today, DraftKings is worth $12 billion, nearly twice as much as when it was brought to the market in April ($6.5 billion).
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