DraftKings fell more than 5% in premarket trading on Friday after it said its loss for the second quarter grew, despite strong revenue and a turnaround in user participation.
The Boston-based gambling company posted a second-quarter loss of $ 161.4 million, or 55 cents a share, compared to a loss of $ 28.11 million, or 15 cents a share, in the same quarter last year. Analysts surveyed by Dow Jones had expected a loss per share of 20 cents.
The figures of less than expected revenue from the company came as Covid-19 scores of professional and college sports leagues continued as efforts to contain coronavirus athletes and fans at home.
Shares fell 6% in the morning trading after the release of the earnings report.
Although the popular stock has been more volatile this year, shares have come under pressure again in recent weeks as some college football locks decided to cancel their 2020 seasons. Both the Big Ten and the Pac-12, two college football leagues, announced earlier this week that they will postpone bankruptcy sports because of the coronavirus.
But CEO and co-founder Jason Robins said in a press release that the company’s focus on delivering new and innovative offerings should lead to healthier financial figures, as sporting events are slowly resuming.
“In the second quarter, while several major sports leagues including the NBA, MLB and the NHL remained on hiatus due to COVID-19, the company worked creatively to engage fans with new fantasy sports and betting products for NASCAR, golf, UFC, and European football. , “said DraftKings in a release accompanying their earnings.
A recent addition to the public market, DraftKings was merged in April with Diamond Eagle Acquisition Corp., a specialty gaming company and supplier of gaming technology SBTech. The move could destroy the typical initial public offering process.
The report on profit in the second quarter was only submitted to its second quarter results as a public company.
The entrance to the elevators, designed to resemble a tunnel entering a stadium, will be pictured at the new DraftKings office in Boston on March 25, 2019.
David L. Ryan | The Boston Globe via Getty Images
Signs of early regrowth may already be evident in the company’s topline, which exceeded analysts’ expectations in the second quarter. Revenue rose to $ 70.9 million from $ 57.4 million, ahead of the consensus Dow Jones forecast for $ 66.4 million.
DraftKings ended the quarter with $ 1.2 billion in cash and no debt on its balance sheet. The company also said it expects 2020 pro forma revenues from $ 500 million to $ 540 million, sales that would represent 22% to 37% growth in the second half of the year.
“As sporting events began to recover, the company saw increased engagement with its sports-based product offerings, which contributed to sequential monthly revenue improvement in the second quarter,” the company added. “This positive momentum has accelerated with the return of MLB, the NBA, WNBA, the NHL, and MLS.”
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