DraftKings CEO: Investors missing a good bet

DraftKings CEO: Investors missing a good bet

DraftKings CEO Jason Robins weighed in on the fantasy sports contest and sports betting company’s stock falling Friday after it reported its third quarter earnings.

The company, which went public in 2020 at $20 per share, said it generated $501.9 million in third-quarter revenue, up 136% from the same period in 2021. Its quarterly net loss narrowed to $450.5 million, with its loss per share coming in at $1.

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Ticker Security Last Exchange Change %
DKNG DRAFTKINGS INC. 11.31 -4.36 -27.82%

Despite its revenue and loss beating analyst estimates, DraftKings’ stock closed down 28% to $11.31 per share.

Robins, appearing on “Varney & Co.” Friday morning, attributed it to “probably a little bit of a disconnect between our guide for 2023, which included a number of new states, versus consensus of which was made up of many analysts that did not include new states.” He called it a “little bit of apples and oranges.”

In this photo illustration, the American daily fantasy sports contest and sports betting company DraftKings logo is displayed on a smartphone screen. (Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images/Getty Images)

In its guidance for the remainder of the year and for 2023, DraftKings accounted for expected launches in Maryland, Ohio, Massachusetts and Puerto Rico, all four of which have recently authorized online sports betting.

FOX Business’ Ashley Webster asked Robins about its monthly unique payers for the quarter, which Webster said came in below estimates. For the quarter, DraftKings reported 1.6 million average monthly unique payers, marking a 22% jump year-over-year.

“It’s a little bit of a tough comparison,” the DraftKings CEO said. “One of the reasons we don’t guide to it is exactly what happened this year. Last year, which of course was the base of comparison, NBA bled into the third quarter; this year it did not, so that made a big difference .”

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“We did talk about September on the earnings call, which was north of 27% year-over-year growth, which I think would have put it a little bit closer to where Wall Street thought,” he continued. “It was really the difference of NBA being in 2021 in Q3 and the season ending a little bit earlier this year.”

Jason Robins, chief executive officer of DraftKings Inc., speaks during a Bloomberg Television interview in New York, US, on Tuesday, Sept. 6, 2016. Robins discussed regulation of fantasy sports, increased competition and the prospect of mergers, a (Victor J. Blue/Bloomberg via Getty Images)

FILE – In this May 2, 2019, file photo, the DraftKings logo is displayed at the sports betting company headquarters in Boston. DraftKings shares jumped 4% in morning trading, Wednesday, Sept. 2, 2020 after announcing that basketball legend Michael Jo (AP Photo/Charles Krupa, File/AP Newsroom)

Robins went on to say that adding the three states and Puerto Rico would “bring the total” up to 45% penetration of the US population.

“We’ve just got to keep executing, and I think if we continue to build a track record — we’ve only been public for a little over two years — of consistently beating expectations and consistently delivering on the promises that we make, than everything else will work itself out,” he said.

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For its 2022 fiscal year outlook, DraftKings upped its projected revenue to between $2.16 and $2.19 billion and reduced its adjusted EBITDA loss to between $765 and $835 million. EBITDA is earnings before interest, taxes, depreciation and amortization, a key measure of profit.

It expects a revenue of $2.8 to $3 billion for 2023, the company said.

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