DraftKings' revenue and customers hit new heights fourth quarter, 2021 guidance raised

DraftKingson Friday reported fourth-quarter results, with revenue of $322 million, an increase of 146% compared to $131 million during the same period in 2019, and a loss of 24 cents per share on an adjusted basis.

Comparisons with the same period in 2019 are inexact because the company formed and went public last April. On a pro forma basis, the revenue figure rose 98%, the company said. Wall Street analysts had expected a loss of 47 cents a share.

Fourth Quarter 2020 Highlights

For the three months ended December 31, 2020, DraftKings reported revenue of $322 million, an increase of 146% compared to $131 million during the same period in 2019. After giving pro forma effect to the business combination with SBTech (Global) Limited (“SBTech”) and Diamond Eagle Acquisition Corp. which was completed on April 23, 2020, as if it had occurred on January 1, 2019, revenue grew 98% compared to the three months ended December 31, 2019.

“With a favorable fourth quarter sports calendar and strong marketing execution, DraftKings was able to generate tremendous customer acquisition and engagement that propelled us to $322 million in fourth quarter revenue, a 98% year over year increase,” said Jason Robins, DraftKings’ co-founder, CEO and Chairman of the Board. “In the fourth quarter of 2020, we saw MUPs increase 44% to 1.5 million and ARPMUP increase 55% to $65. We are raising our revenue outlook for 2021 due to our expectation for continued growth, the outperformance of our core business and newly launched states that were not included in our previous guidance.”

Favorable Sports Calendar and Strong Customer Engagement Drove Q4 Results

Monthly Unique Payers (“MUPs”) for our B2C segment increased 44% compared to the fourth quarter of 2019. On average, 1.5 million monthly unique paying customers engaged with DraftKings each month during the fourth quarter. The increase reflects strong unique payer retention and acquisition across DFS, OSB and iGaming. For 2020, MUPs increased 29%, which includes the impact of COVID-19 on our MUPs for Sportsbook and DFS primarily during the second quarter and early in the third quarter.
Average Revenue per MUP (“ARPMUP”) was $65 in the fourth quarter representing a 55% increase versus the same period in 2019. Our ARPMUP was positively impacted by increased engagement with our iGaming and mobile sports betting product offerings as well as successful cross-selling. For 2020, ARPMUP increased 29%.

Increasing 2021 Revenue Guidance

DraftKings is raising its fiscal year 2021 revenue guidance from a range of $750 million to $850 million to a range of $900 million to $1 billion, which equates to year-over-year growth of 40% to 55% and a 19% increase compared to the midpoint of our previous guidance.
The increase reflects strong performance in the fourth quarter of 2020, substantial user activation due to the effectiveness of our 2020 marketing spend, and the launch of mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia. This guidance also assumes that all professional and college sports calendars that have been announced come to fruition and that we continue to operate in states in which we are live today.
Detailed financial data and other information for the fourth quarter and full-year 2020 is available in DraftKings’ Annual Report on Form 10-K, being filed today with the Securities and Exchange Commission (the “SEC”), as well as in a slide presentation that can be accessed through the “Investors” section of the Company’s website at investors.draftkings.com.

DraftKings Grows Its Nation-Leading Mobile Sports Betting and iGaming Footprint

DraftKings expanded its footprint to include mobile sports betting in Tennessee in the fourth quarter of 2020. In 2021, DraftKings launched mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia.

In November, DraftKings launched mobile sports betting in Tennessee. The state of Tennessee had the best two month launch in U.S. sports betting history with over $300 million in handle in its first two months of operation including 38% month-over-month growth in December.
On January 1, 2021, DraftKings began mobile registration in Iowa according to state regulations. By 3PM ET on January 5, DraftKings registered more customers via mobile registration than through the entirety of 2020.
Following successful launches in Michigan and Virginia in 2021 (combined these states represent 6% of the U.S. population), DraftKings is now live with mobile sports betting in 12 states, which is more than any other company in the industry. These 12 states together represent 25% of the U.S. population, a position that DraftKings has achieved less than three years after the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992.
In 2021, 19 state legislatures have introduced legislation to legalize online sports betting, five state legislatures have introduced legislation to expand their existing sports wagering frameworks and one state legislature has introduced legislation to legalize sports betting limited to retail locations. In addition, four states have introduced iGaming legislation and two states have introduced online poker legislation.