DraftKings Rallies On Upbeat Full-Year Sales Outlook

Dow Jones
02-14

Shares of DraftKings Inc. rose sharply after hours Thursday after the sports-betting platform offered a more optimistic sales outlook for this year, as it moves ahead with things like live betting and deepens its push into U.S. states where betting is newly legal.

But as analysts try to gauge the impact from last weekend's Super Bowl, DraftKings (DKNG) said its forecast did "not include the benefit of year-to-date sport outcomes," and said it didn't included a mobile-sports betting launch in Missouri, where voters last year narrowly legalized sports betting.

DraftKings said it now expects sales of $6.3 billion to $6.6 billion for 2025. That compares with a prior forecast for $6.2 billion to $6.6 billion.

Shares were up 5.7% after hours on Thursday. As of Thursday's close, the stock is up 4.5% over the past 12 months.

For the fourth quarter, DraftKings reported sales of $1.39 billion, up 13% year over year, helped by new customers, expansion into new areas and the acquisition of Jackpocket last year. Those trends were "partially offset by customer-friendly outcomes throughout the NFL season." The company said it lost 28 cents a share during the quarter.

Analysts polled by FactSet expected DraftKings to lose 17 cents a share during the fourth quarter, on revenue of $1.39 billion.

More details about the Super Bowl and other trends could arrive in DraftKings' earnings call, set for Friday morning. The platform's results arrived after BofA analysts, in a research note on Wednesday, said the Super Bowl on Sunday likely amounted to a good day for sportsbooks, even as they raised concerns specific to DraftKings about higher taxes in Maryland and Ohio and the costs of setting up shop in Missouri.

The analysts noted that online sports-betting site FanDuel $(FLUT)$ reported a roughly 19% increase in bets for the game, and said that BetMGM $(MGM)$ called the game "one of the best single-game results in company history" and its biggest betting event ever.

"We think the ability to grow double-digits during the biggest event of the year is impressive and could help assuage concerns of slowing handle," the analysts said, referring to the amount people bet overall.

They added: "In addition to the strong handle growth, we think the books benefitted from the Eagles winning and key players, including Saquon Barkley and Travis Kelce, staying out of the end zone."

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