DraftKings Stock Price Continues Fall After 2021 Earnings Report Released

DraftKings got hammered on Friday after reporting fourth quarter earnings and fiscal 2021 earnings, opening down a whopping 14% to $18.95, approaching all-time lows.

Although 2021 revenue was up $1.3 billion — a 101% increase — the market wasn't sold on the insistence of the company that it will get to profitability. Losses on the year were up 23.5% versus 2020, with $1.52 billion lost in 2021.

Pressured by shareholders needing to hear about profitability, the company used the "contribution profit positive" phrase, a term other sportsbooks have used, including BetMGM.

The company said it was "contribution profit positive" in five states and would be "contribution profit positive" in five additional states in 2022. Contribution profit positive means gross profit minus external marketing. The question is whether the phrase is at all meaningful given that external marketing, or user acquisition, is the largest cost they have.

"We feel like anything that gives our investors clarity as to how the business is trending in terms of overall profit and loss is a good thing," Robins told Action Network.

DraftKings spent $982 million on sales and marketing in 2021, nearly double the amount ($499M) spent in 2020.

DraftKings has its mobile sports gambling product in 17 states, which represents 36% of the population. In markets where it exists, its handle represents a market share of 32%, CEO Jason Robins said.

Monthly unique customers in 2021 went to 1.49 million up from 883,000 in 2020 with average revenue per bettor up to $67 per month from $51 the year before.

As of 10:30 a.m. ET, shares were down another 4% to a total drop of 18%.