DraftKings has reported a 49% rise in full-year revenue to $643.5m (£461.4m/€534.5m), after its Q4 income almost doubled.
The figures were calculated based on estimates and assumptions as if the business combination of SBTech and Diamond Eagle Acquisition Corp, which was completed on 23 April 2020, had occurred on 1 January 2019.
The daily fantasy sports giant saw revenue rise by 146.1% year-on-year to $322.2m over the three months to 31 December 2020. Using the pro forma calculations relating to SBTech and Diamond Eagle, revenue would have increased by 98% compared to the three months ended 31 December 2019.
The mergers between DraftKings and SBTech saw the combined entity list on the Nasdaq exchange as part of the Diamond Eagle Acquisition Corp.
As a result of the latest results filing, shares in the business rose by as much as 8.4% on Friday and the company’s stock closed up by almost 6.5%.
The strong fourth-quarter performance prompted the operator to increase its 2021 revenue projections from a range of $750m to $850m, to between $900m and $1bn.
It based this on, not only 2020 growth but the fact it had launched in new states, such as Michigan and Virginia in January 2021.
Commenting on fourth-quarter performance, DraftKings chief executive Jason Robins said: “With a favourable fourth quarter sports calendar and strong marketing execution, DraftKings was able to generate tremendous customer acquisition and engagement.”
He added: “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.”
The expanded during Q4 to launch mobile betting in Tennessee and inking a deal with Mashantucket Pequot Tribal Nation and Foxwoods Resorts Casino for access to the Connecticut market – pending regulatory approval.
Tennessee saw a strong start to regulated betting with more than $300m staked in November and December.
The B2C side of the business also grew, with agreements being signed with broadcaster Turner Sports, the Philadelphia Eagles, the Detroit Pistons, Nashville Predators and a sponsorship deal with professional golfer Bryson DeChambeau.
The B2B side of the business (SBTech), launched a sportsbook for South African PalaceBet and extended an existing partnership with Mansion Group’s MansionBet brand.
As a result of this rapid growth, expenditure more than doubled across the business. Marketing spend was up 205.3% to $192.0m and product and technology expenses grew from $7.4m to $66.1m.
As a result, the firm’s operating loss rose to $268.3m. Adjusted loss before interest, tax, depreciation and amortisation was $87.9m. Accounting for taxes and other losses DraftKings’ net loss for the fourth quarter came to $266.4m.