DraftKings Reports Increased Revenue, $500 Million in Marketing for 2020
Denise Truscello/Getty Images for DraftKings
DraftKings reported fourth quarter and fiscal year revenue on Friday morning, revealing that revenue was up 49 percent in 2020 compared the year before.
DraftKings revenue was $644 million in 2020 compared to $432 million. Such 2020 revenue assumes the business combination with SB Tech happened in January instead of April for comp purposes.
DraftKings stock, in the first 30 minutes of trading on Friday, was up 2.4 percent.
Despite the top line numbers, the market could be focusing on a path to profitability, which realistically likely won’t happen for two-to-three years.
While ending the year with $1.8 billion in cash and no debt, the company lost $396 million adjusted for EBITDA.
DraftKings currently operates online sports betting in 12 states, which represents roughly 25 percent of the U.S. population. Only one state — New Jersey — is profitable. Year over year handle in the state, which overall did $6 billion, was up 103 percent for DraftKings.
The combined DK and SB Tech company spent $499 million in marketing, an astounding 77 percent of their revenue, to win share in new states that opened up, including Michigan, Virginia and Tennessee and bolster support for Illinois, which lifted in-person registration.
DraftKings said they had better-than-expected online hold percentage, especially in NFL and college football that yielded an extra $30 million in the fourth quarter.
Monthly unique players rose from 684,000 to 883,000 year over year. The average monthly spend rose by $12 a month to $51 in 2020.