DraftKings Inc. (Nasdaq: DKNG) (“DraftKings” or the “Company”)
today announced its second quarter 2023 financial results. The
Company also posted a second quarter 2023 business update and an
earnings presentation on the Investor Relations section of its
website at investors.draftkings.com.
Second Quarter 2023
Highlights
For the three months ended June 30, 2023,
DraftKings reported revenue of $875 million, an increase of 88%
compared to $466 million during the same period in 2022 driven
primarily by continued healthy customer retention and engagement,
efficient acquisition of new customers, product innovation leading
to increased parlay mix and thus higher hold percentage, and
improved promotional intensity.
“DraftKings produced outstanding results for the
second quarter of 2023. We grew revenue at an impressive
year-over-year rate, captured additional GGR share in a
cost-effective manner, and maintained our focus on operational
efficiency,” said Jason Robins, DraftKings’ Chief Executive Officer
and Co-founder. “The positive Adjusted EBITDA that we generated in
the second quarter exceeded our guidance, and we are well on our
way to achieving positive Adjusted EBITDA again in the fourth
quarter of 2023 and for fiscal year 2024 and beyond. We are excited
by the additional product features and functionality that we are
introducing leading into football season and also look forward to
another successful online sportsbook launch in Kentucky this fall
pending licensure and regulatory approvals.”
“We are acquiring new customers efficiently
while simultaneously retaining and monetizing our existing players
through rapid product innovation, less promotions, and higher hold
from better bet mix,” said Jason Park, DraftKings’ Chief Financial
Officer. “Our unit economics are outstanding with older states
generating more than enough cash to fund investment in new
states. This performance, combined with fixed costs
that grew at only a mid-single digit year-over-year percentage rate
in the second quarter, resulted in an inflection to positive
Adjusted EBITDA that we expect will occur again in the fourth
quarter and for full year 2024. As a result, we are
increasing the midpoint of our fiscal year 2023 revenue guidance to
$3.5 billion from $3.185 billion and improving the midpoint of our
fiscal year 2023 Adjusted EBITDA guidance to ($205) million from
($315) million.”
Continued Healthy Growth in Customer
Retention, Acquisition, and Engagement
- Monthly Unique Payers (“MUPs”)
increased to 2.1 million average monthly unique paying customers in
the second quarter of 2023, representing an increase of 44%
compared to the second quarter of 2022. This increase reflects
strong unique payer retention and acquisition across DraftKings’
Sportsbook and iGaming products as well as the expansion of its
Sportsbook and iGaming products into new jurisdictions.
- Average Revenue per MUP (“ARPMUP”)
was $137 in the second quarter of 2023, representing a 33% increase
compared to the same period in 2022. This increase was primarily
due to improvement in the Company’s structural sportsbook hold rate
and reduced promotional intensity.
- Detailed financial data and other
information for the second quarter of 2023 is available in the
financial statements set forth below under the caption “Financial
Results.”
Raising 2023 Revenue Guidance and
Improving 2023 Adjusted EBITDA Guidance
- DraftKings is raising its fiscal
year 2023 revenue guidance to a range of $3.46 billion to $3.54
billion from the range of $3.135 billion to $3.235 billion, which
the Company previously announced on May 4, 2023. The
Company’s updated 2023 revenue guidance range equates to
year-over-year growth of 54% to 58%.
- DraftKings is also improving its
fiscal year 2023 Adjusted EBITDA guidance. The Company
now expects fiscal year 2023 Adjusted EBITDA of between ($190)
million and ($220) million compared to its prior fiscal year 2023
Adjusted EBITDA guidance of between ($290) million and ($340)
million, which the Company previously announced on May 4,
2023.
- In the fourth quarter of 2023,
DraftKings expects to generate $150 million to $175 million of
Adjusted EBITDA and nearly $1.2 billion of revenue.
- The Company’s revenue and Adjusted
EBITDA guidance for fiscal year 2023 includes all the existing
jurisdictions in which it is live plus Kentucky and Puerto Rico, in
which it expects to launch during the guided period.
Mobile Sports Betting and iGaming
Footprint
- DraftKings is live with mobile
sports betting in 21 states that collectively represent
approximately 44% of the U.S. population.
- DraftKings is also live with
iGaming in 5 states, representing approximately 11% of the U.S.
population.
- DraftKings is live with its
Sportsbook and iGaming products in Ontario, Canada, which
represents approximately 40% of Canada’s population.
- Kentucky, North Carolina, Vermont,
and Puerto Rico have authorized mobile sports betting and
collectively represent approximately 6% of the U.S. population.
DraftKings expects to launch its Sportsbook product in Kentucky on
September 28, 2023, as well as in North Carolina, Vermont, and
Puerto Rico, in each case pending licensure and regulatory
approvals as well as securing market access in North Carolina and
Vermont.
- In 2023, 12 states that
collectively represent approximately 24% of the U.S. population
have either introduced legislation to legalize mobile sports
betting or introduced bills that may result in sports wagering
referendums during an upcoming election. In addition, 5 states that
collectively represent approximately 14% of the U.S. population
have either introduced legislation to legalize iGaming or
introduced a bill that may result in an iGaming referendum during
an upcoming election.
Webcast and Conference Call
Details
As previously announced, DraftKings will host a
conference call and audio webcast tomorrow, Friday, August 4, 2023,
at 8:30 a.m. ET, during which management will discuss the Company’s
results for the quarter and provide commentary on business
performance. A question and answer session will follow the prepared
remarks.
To listen to the audio webcast and live question
and answer session, please visit DraftKings’ investor relations
website at investors.draftkings.com. A live audio webcast of the
earnings conference call will be available on the Company’s website
at investors.draftkings.com, along with a copy of this press
release, the Company’s Quarterly Report on Form 10-Q, a slide
presentation and a second quarter 2023 business update. The audio
webcast will be available on the Company’s investor relations
website until 11:59 p.m. ET on September 30, 2023.
Financial Results
DraftKings’ second quarter 2023 financial
results, as well as the financial results for the respective
comparative period, are presented below:
DRAFTKINGS INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Amounts in thousands, except par value) |
|
|
|
|
|
June 30, 2023 |
|
|
|
(Unaudited) |
|
December 31, 2022 |
Assets |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
1,113,715 |
|
|
$ |
1,309,172 |
|
Cash reserved for users |
|
381,097 |
|
|
|
469,653 |
|
Receivables reserved for
users |
|
109,153 |
|
|
|
160,083 |
|
Accounts receivable |
|
32,401 |
|
|
|
51,097 |
|
Prepaid expenses and other
current assets |
|
82,655 |
|
|
|
94,836 |
|
Total current
assets |
|
1,719,021 |
|
|
|
2,084,841 |
|
Property and equipment,
net |
|
59,934 |
|
|
|
60,102 |
|
Intangible assets, net |
|
734,633 |
|
|
|
776,934 |
|
Goodwill |
|
886,373 |
|
|
|
886,373 |
|
Operating lease right-of-use
assets |
|
58,349 |
|
|
|
65,957 |
|
Equity method investment |
|
9,638 |
|
|
|
10,080 |
|
Deposits and other non-current
assets |
|
138,316 |
|
|
|
155,865 |
|
Total
assets |
$ |
3,606,264 |
|
|
$ |
4,040,152 |
|
|
|
|
|
Liabilities and
Stockholders’ equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable and accrued
expenses |
$ |
436,265 |
|
|
$ |
517,587 |
|
Liabilities to users |
|
600,146 |
|
|
|
686,173 |
|
Operating lease liabilities,
current portion |
|
3,305 |
|
|
|
4,253 |
|
Other current liabilities |
|
37,520 |
|
|
|
38,444 |
|
Total current
liabilities |
|
1,077,236 |
|
|
|
1,246,457 |
|
Convertible notes, net of
issuance costs |
|
1,252,420 |
|
|
|
1,251,103 |
|
Non-current operating lease
liabilities |
|
64,418 |
|
|
|
69,332 |
|
Warrant liabilities |
|
46,286 |
|
|
|
10,680 |
|
Long-term income tax
liability |
|
69,283 |
|
|
|
69,858 |
|
Other long-term
liabilities |
|
78,130 |
|
|
|
70,029 |
|
Total
liabilities |
$ |
2,587,773 |
|
|
$ |
2,717,459 |
|
Commitments and
contingent liabilities |
|
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
Class A common stock, $0.0001 par value; 900,000 shares authorized
as of June 30, 2023 and December 31, 2022; 473,933 and
459,265 shares issued and 463,257 and 450,575 outstanding as of
June 30, 2023 and December 31, 2022, respectively |
$ |
46 |
|
|
$ |
45 |
|
Class B common stock, $0.0001 par value; 900,000 shares authorized
as of June 30, 2023 and December 31, 2022; 393,014 shares
issued and outstanding as of June 30, 2023 and
December 31, 2022 |
|
39 |
|
|
|
39 |
|
Treasury stock, at cost;
10,676 and 8,690 shares as of June 30, 2023 and
December 31, 2022, respectively |
|
(373,317 |
) |
|
|
(332,133 |
) |
Additional paid-in
capital |
|
6,961,454 |
|
|
|
6,750,055 |
|
Accumulated deficit |
|
(5,606,219 |
) |
|
|
(5,131,801 |
) |
Accumulated other
comprehensive income |
|
36,488 |
|
|
|
36,488 |
|
Total stockholders’
equity |
$ |
1,018,491 |
|
|
$ |
1,322,693 |
|
Total liabilities and
stockholders’ equity |
$ |
3,606,264 |
|
|
$ |
4,040,152 |
|
DRAFTKINGS INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
(Amounts in thousands, except loss per share data) |
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenue |
$ |
874,927 |
|
|
$ |
466,185 |
|
|
$ |
1,644,579 |
|
|
$ |
883,390 |
|
Cost of revenue |
|
510,323 |
|
|
|
312,767 |
|
|
|
1,032,063 |
|
|
|
626,146 |
|
Sales and marketing |
|
207,487 |
|
|
|
197,529 |
|
|
|
596,620 |
|
|
|
518,981 |
|
Product and technology |
|
89,906 |
|
|
|
77,202 |
|
|
|
177,994 |
|
|
|
158,554 |
|
General and
administrative |
|
136,256 |
|
|
|
187,609 |
|
|
|
296,732 |
|
|
|
404,215 |
|
Loss from
operations |
|
(69,045 |
) |
|
|
(308,922 |
) |
|
|
(458,830 |
) |
|
|
(824,506 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
Interest income |
|
13,411 |
|
|
|
2,590 |
|
|
|
25,206 |
|
|
|
3,391 |
|
Interest expense |
|
(666 |
) |
|
|
(661 |
) |
|
|
(1,321 |
) |
|
|
(1,314 |
) |
(Loss) gain on remeasurement
of warrant liabilities |
|
(20,041 |
) |
|
|
14,315 |
|
|
|
(37,076 |
) |
|
|
26,996 |
|
Other income (expense),
net |
|
45 |
|
|
|
(5,573 |
) |
|
|
64 |
|
|
|
32,309 |
|
Loss before income tax
provision and loss from equity method investment |
|
(76,296 |
) |
|
|
(298,251 |
) |
|
|
(471,957 |
) |
|
|
(763,124 |
) |
Income tax provision
(benefit) |
|
651 |
|
|
|
(81,226 |
) |
|
|
2,019 |
|
|
|
(80,757 |
) |
Loss from equity method
investment |
|
323 |
|
|
|
78 |
|
|
|
442 |
|
|
|
2,429 |
|
Net loss attributable
to common stockholders |
$ |
(77,270 |
) |
|
$ |
(217,103 |
) |
|
$ |
(474,418 |
) |
|
$ |
(684,796 |
) |
|
|
|
|
|
|
|
|
Loss per share
attributable to common stockholders: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.17 |
) |
|
$ |
(0.50 |
) |
|
$ |
(1.03 |
) |
|
$ |
(1.61 |
) |
DRAFTKINGS INC. |
NON-GAAP FINANCIAL MEASURES |
(Unaudited) |
(Amounts in thousands, except loss per share data) |
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Adjusted EBITDA |
$ |
72,972 |
|
$ |
(118,134 |
) |
|
$ |
(148,639 |
) |
|
$ |
(407,643 |
) |
Adjusted Income (Loss) Per
Share |
$ |
0.14 |
|
$ |
(0.29 |
) |
|
$ |
(0.36 |
) |
|
$ |
(1.01 |
) |
DRAFTKINGS INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
(Amounts in thousands) |
|
|
|
Six months ended June 30, |
|
2023 |
|
2022 |
Operating
Activities: |
|
|
|
Net loss |
$ |
(474,418 |
) |
|
$ |
(684,796 |
) |
Adjustments to reconcile net loss to net cash flows used in
operating activities: |
|
|
|
Depreciation and amortization |
|
96,477 |
|
|
|
74,540 |
|
Non-cash interest (income) expense, net |
|
(378 |
) |
|
|
931 |
|
Stock-based compensation expense |
|
206,593 |
|
|
|
322,598 |
|
Loss from equity method investment |
|
442 |
|
|
|
2,429 |
|
Loss (gain) on remeasurement of warrant liabilities |
|
37,076 |
|
|
|
(26,996 |
) |
Loss (gain) on marketable equity securities and other financial
assets |
|
75 |
|
|
|
(31,808 |
) |
Deferred income taxes |
|
1,993 |
|
|
|
(76,656 |
) |
Other expenses, net |
|
(3,349 |
) |
|
|
(2,667 |
) |
Change in operating assets and liabilities, net of business
combinations: |
|
|
|
Receivables reserved for users |
|
50,930 |
|
|
|
(2,057 |
) |
Accounts receivable |
|
19,296 |
|
|
|
9,765 |
|
Prepaid expenses and other current assets |
|
11,257 |
|
|
|
(47,574 |
) |
Deposits and other non-current assets |
|
(6,237 |
) |
|
|
(135 |
) |
Operating leases, net |
|
1,457 |
|
|
|
240 |
|
Accounts payable and accrued expenses |
|
(79,933 |
) |
|
|
(15,659 |
) |
Liabilities to users |
|
(86,027 |
) |
|
|
(51,195 |
) |
Long-term income tax liability |
|
(575 |
) |
|
|
(5,266 |
) |
Other long-term liabilities |
|
6,108 |
|
|
|
5,003 |
|
Net cash flows used in operating activities |
$ |
(219,213 |
) |
|
$ |
(529,303 |
) |
Investing
Activities: |
|
|
|
Purchases of property and equipment |
|
(9,649 |
) |
|
|
(14,457 |
) |
Cash paid for internally developed software costs |
|
(39,287 |
) |
|
|
(29,419 |
) |
Acquisition of gaming licenses |
|
(1,959 |
) |
|
|
(3,388 |
) |
Proceeds from marketable equity securities and other financial
assets |
|
24,425 |
|
|
|
— |
|
Cash paid for acquisition, net of cash acquired |
|
— |
|
|
|
(96,507 |
) |
Other investing activities, net |
|
(482 |
) |
|
|
(3,697 |
) |
Net cash flows used in investing activities |
$ |
(26,952 |
) |
|
$ |
(147,468 |
) |
Financing
Activities: |
|
|
|
Proceeds from shares issued for warrants |
|
— |
|
|
|
44 |
|
Purchase of treasury stock |
|
(41,184 |
) |
|
|
(17,476 |
) |
Proceeds from exercise of stock options |
|
3,336 |
|
|
|
4,901 |
|
Net cash flows used in financing activities |
$ |
(37,848 |
) |
|
$ |
(12,531 |
) |
Net decrease in cash and cash equivalents and restricted cash |
|
(284,013 |
) |
|
|
(689,302 |
) |
Cash and cash equivalents and
restricted cash at the beginning of period |
|
1,778,825 |
|
|
|
2,629,842 |
|
Cash and cash
equivalents and restricted cash, end of period |
$ |
1,494,812 |
|
|
$ |
1,940,540 |
|
|
|
|
|
Disclosure of cash,
cash equivalents and restricted cash: |
|
|
|
Cash and cash equivalents |
$ |
1,113,715 |
|
|
$ |
1,514,371 |
|
Cash reserved for users |
|
381,097 |
|
|
|
426,169 |
|
Total cash, cash equivalents and restricted cash, end of
period |
$ |
1,494,812 |
|
|
$ |
1,940,540 |
|
|
|
|
|
Supplemental
Disclosure of Noncash Investing and Financing
Activities: |
|
|
|
Equity consideration issued
for acquisitions |
$ |
— |
|
|
$ |
460,128 |
|
Investing activities included
in changes in accounts payable and accrued expenses |
$ |
637 |
|
|
$ |
9,425 |
|
Decrease of warrant
liabilities from cashless exercise of warrants |
$ |
1,470 |
|
|
$ |
— |
|
Supplemental
Disclosure of Cash Activities: |
|
|
|
Decrease in cash reserved for
users |
$ |
88,556 |
|
|
$ |
50,781 |
|
Cash paid for interest |
$ |
— |
|
|
$ |
— |
|
Non-GAAP Financial Measures
This press release includes Adjusted EBITDA and
Adjusted Income (Loss) Per Share, which are non-GAAP financial
measures that DraftKings uses to supplement its results presented
in accordance with U.S. generally accepted accounting principles
(“GAAP”). The Company believes Adjusted EBITDA and Adjusted Income
(Loss) Per Share are useful in evaluating its operating
performance, similar to measures reported by its publicly-listed
U.S. competitors, and regularly used by security analysts,
institutional investors and other interested parties in analyzing
operating performance and prospects. Adjusted EBITDA and Adjusted
Income (Loss) Per Share are not intended to be substitutes for any
GAAP financial measures, and, as calculated, may not be comparable
to other similarly titled measures of performance of other
companies in other industries or within the same industry.
DraftKings defines and calculates Adjusted
EBITDA as net loss before the impact of interest income or expense
(net), income tax provision or benefit, and depreciation and
amortization, and further adjusted for the following items:
stock-based compensation; transaction-related costs; litigation,
settlement and related costs; advocacy and other related legal
expenses; gain or loss on remeasurement of warrant liabilities; and
other non-recurring and non-operating costs or income, as described
in the reconciliation below.
DraftKings defines and calculates Adjusted
Income (Loss) Per Share as basic and diluted loss per share
attributable to common stockholders before the impact of
amortization of acquired intangible assets; stock-based
compensation; transaction-related costs; litigation, settlement and
related costs; advocacy and other related legal expenses; gain or
loss on remeasurement of warrant liabilities; and other
non-recurring and non-operating costs or income, as described in
the reconciliation below.
DraftKings includes these non-GAAP financial
measures because they are used by management to evaluate the
Company’s core operating performance and trends and to make
strategic decisions regarding the allocation of capital and new
investments. Adjusted EBITDA and Adjusted Income (Loss) Per Share
exclude certain expenses that are required in accordance with GAAP
because they are non-recurring items (for example, in the case of
transaction-related costs and advocacy and other related legal
expenses), non-cash expenditures (for example, in the case of
amortization of acquired intangible assets, depreciation and
amortization, remeasurement of warrant liabilities and stock-based
compensation), or non-operating items which are not related to the
Company’s underlying business performance (for example, in the case
of interest income and expense and litigation, settlement and
related costs).
The unaudited table below presents the Company’s
Adjusted EBITDA reconciled to its net loss, which is the most
directly comparable financial measure calculated in accordance with
GAAP, for the periods indicated:
|
Three months ended June 30, |
|
Six months ended June 30, |
(amounts in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
Net loss |
$ |
(77,270 |
) |
|
$ |
(217,103 |
) |
|
$ |
(474,418 |
) |
|
$ |
(684,796 |
) |
Adjusted for: |
|
|
|
|
|
|
|
Depreciation and amortization(1) |
|
48,264 |
|
|
|
42,315 |
|
|
|
96,477 |
|
|
|
74,540 |
|
Interest income, net |
|
(12,745 |
) |
|
|
(1,929 |
) |
|
|
(23,885 |
) |
|
|
(2,077 |
) |
Income tax provision (benefit) |
|
651 |
|
|
|
(81,226 |
) |
|
|
2,019 |
|
|
|
(80,757 |
) |
Stock-based compensation(2) |
|
89,193 |
|
|
|
135,521 |
|
|
|
206,593 |
|
|
|
322,598 |
|
Transaction-related costs(3) |
|
425 |
|
|
|
10,505 |
|
|
|
425 |
|
|
|
14,279 |
|
Litigation, settlement, and related costs(4) |
|
4,136 |
|
|
|
2,446 |
|
|
|
6,699 |
|
|
|
4,396 |
|
Advocacy and other related legal expenses(5) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss (gain) on remeasurement of warrant liabilities |
|
20,041 |
|
|
|
(14,315 |
) |
|
|
37,076 |
|
|
|
(26,996 |
) |
Other non-recurring costs and non-operating (income) costs(6) |
|
277 |
|
|
|
5,652 |
|
|
|
375 |
|
|
|
(28,830 |
) |
Adjusted
EBITDA |
$ |
72,972 |
|
|
$ |
(118,134 |
) |
|
$ |
(148,639 |
) |
|
$ |
(407,643 |
) |
_______________________
(1) |
The amounts include the amortization of acquired intangible assets
of $28.9 million and $27.1 million for the three months ended June
30, 2023 and 2022, respectively, and $58.8 million and $46.3
million for the six months ended June 30, 2023 and 2022,
respectively. |
(2) |
Reflects
stock-based compensation expenses resulting from the issuance of
awards under incentive plans. |
(3) |
Includes
capital markets advisory, consulting, accounting and legal expenses
related to evaluation, negotiation and integration costs incurred
in connection with proposed, pending or completed transactions and
offerings, including costs relating to DraftKings’ acquisition of
Golden Nugget Online Gaming, Inc. in 2022. |
(4) |
Primarily
includes external legal costs related to litigation and litigation
settlement costs deemed unrelated to DraftKings’ core business
operations. |
(5) |
Reflects
non-recurring and non-ordinary course costs relating to advocacy
efforts and other legal expenses in jurisdictions where DraftKings
does not operate certain product offerings and is actively seeking
licensure, or similar approval, for those product offerings. For
the six months ended June 30, 2023 and 2022, DraftKings did
not incur any such costs. This adjustment excludes (i) costs
relating to advocacy efforts and other legal expenses in
jurisdictions where DraftKings does not operate that are incurred
in the ordinary course of business and (ii) costs relating to
advocacy efforts and other legal expenses incurred in jurisdictions
where related legislation has been passed and DraftKings currently
operates. |
(6) |
Primarily
includes the change in fair value of certain financial assets, as
well as the Company’s equity method share of the investee’s losses
and other costs relating to non-recurring and non-operating
items. |
The unaudited table below presents the Company’s Adjusted Income
(Loss) Per Share reconciled to its basic loss per share
attributable to common stockholders, which is the most directly
comparable financial measure calculated in accordance with GAAP,
for the periods indicated:
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Basic loss per share attributable to common stockholders |
$ |
(0.17 |
) |
|
$ |
(0.50 |
) |
|
$ |
(1.03 |
) |
|
$ |
(1.61 |
) |
Adjusted for: |
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
0.06 |
|
|
|
0.06 |
|
|
|
0.13 |
|
|
|
0.11 |
|
Discrete tax benefit attributed to the GNOG acquisition |
|
— |
|
|
|
(0.18 |
) |
|
|
— |
|
|
|
(0.18 |
) |
Stock-based compensation(1) |
|
0.19 |
|
|
|
0.31 |
|
|
|
0.45 |
|
|
|
0.76 |
|
Transaction-related costs(2) |
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
0.03 |
|
Litigation, settlement, and related costs(3) |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
Advocacy and other related legal expenses(4) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss (gain) on remeasurement of warrant liabilities |
|
0.04 |
|
|
|
(0.03 |
) |
|
|
0.08 |
|
|
|
(0.06 |
) |
Other non-recurring costs and non-operating (income) costs(5) |
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
(0.07 |
) |
Adjusted Income (Loss)
Per Share* |
$ |
0.14 |
|
|
$ |
(0.29 |
) |
|
$ |
(0.36 |
) |
|
$ |
(1.01 |
) |
_______________________
* |
Weighted average number of shares used to calculate Adjusted Income
(Loss) Per Share for the second quarter and year to date period
ending June 30, 2023 was 462.4 million and 458.9 million,
respectively; totals may not sum due to rounding. |
(1) |
Reflects
stock-based compensation expenses per share resulting from the
issuance of awards under incentive plans. |
(2) |
Reflects
capital markets advisory, consulting, accounting and legal expenses
per share related to evaluation, negotiation and integration costs
incurred in connection with proposed, pending or completed
transactions and offerings, including costs relating to DraftKings’
acquisition of Golden Nugget Online Gaming, Inc. in 2022. |
(3) |
Primarily
reflects external legal costs related to litigation and litigation
settlement costs, in each case per share, deemed unrelated to
DraftKings’ core business. |
(4) |
Reflects
non-recurring and non-ordinary course costs per share relating to
advocacy efforts and other legal expenses in jurisdictions where
DraftKings does not operate certain product offerings and is
actively seeking licensure, or similar approval, for those product
offerings. For the six months ended June 30, 2023 and 2022,
DraftKings did not incur any such costs. This adjustment excludes
(i) costs relating to advocacy efforts and other legal expenses in
jurisdictions where DraftKings does not operate that are incurred
in the ordinary course of business and (ii) costs relating to
advocacy efforts and other legal expenses incurred in jurisdictions
where related legislation has been passed and DraftKings currently
operates. |
(5) |
Primarily
includes the change in fair value of certain financial assets, as
well as the Company’s equity method share of the investee’s losses
and other costs relating to non-recurring and non-operating items,
in each case per share. |
Information reconciling forward-looking fiscal year 2023
Adjusted EBITDA guidance to its most directly comparable GAAP
financial measure, net income (loss), is unavailable to DraftKings
without unreasonable effort due to, among other things, certain
items required for such reconciliations being outside of
DraftKings’ control and/or not being able to be reasonably
predicted. Preparation of such reconciliations would require a
forward-looking balance sheet, statement of income and statement of
cash flow, prepared in accordance with GAAP, and such
forward-looking financial statements are unavailable to the Company
without unreasonable effort. DraftKings provides a range for its
Adjusted EBITDA forecast that it believes will be achieved;
however, the Company cannot provide any assurance that it can
predict all of the components of the Adjusted EBITDA calculation.
DraftKings provides a forecast for Adjusted EBITDA because it
believes that Adjusted EBITDA, when viewed with DraftKings’ results
calculated in accordance with GAAP, provides useful information for
the reasons noted above. However, Adjusted EBITDA is not a measure
of financial performance or liquidity under GAAP and, accordingly,
should not be considered as an alternative to net income (loss) or
cash flow from operating activities or as an indicator of operating
performance or liquidity.
About DraftKings
DraftKings Inc. is a digital sports
entertainment and gaming company created to fuel the competitive
spirit of sports fans with products that range across daily
fantasy, regulated gaming and digital media. Headquartered in
Boston, and launched in 2012 by Jason Robins, Matt Kalish and Paul
Liberman, DraftKings is the only U.S.-based vertically integrated
sports betting operator. DraftKings’ mission is to make life more
exciting by responsibly creating the world’s favorite real-money
games and betting experiences. DraftKings Sportsbook is live with
mobile and/or retail sports betting operations pursuant to
regulations in 23 states and in Ontario, Canada. The Company
operates iGaming pursuant to regulations in 5 states and in
Ontario, Canada under its DraftKings brand and pursuant to
regulations in 3 states under its Golden Nugget Online Gaming
brand. DraftKings’ daily fantasy sports product is available in 44
states, certain Canadian provinces and the United Kingdom.
DraftKings is both an official daily fantasy and sports betting
partner of the NFL, NHL, PGA TOUR and UFC, as well as an official
daily fantasy partner of NASCAR, an official sports betting partner
of the NBA and an authorized gaming operator of MLB. Launched in
2021, DraftKings Marketplace is a digital collectibles ecosystem
designed for mainstream accessibility that offers curated NFT drops
and supports secondary-market transactions. In addition, DraftKings
owns and operates Vegas Sports Information Network (VSiN), a
multi-platform broadcast and content company. DraftKings is
committed to being a responsible steward of this new era in
real-money gaming with a Company-wide focus on responsible gaming
and corporate social responsibility.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, including statements about the
Company and its industry that involve substantial risks and
uncertainties. All statements, other than statements of historical
fact, contained in this press release, including statements
regarding guidance, DraftKings’ future results of operations or
financial condition, strategic plans and focus, user growth and
engagement, product initiatives, and the objectives and
expectations of management for future operations (including
launches in new jurisdictions and the expected timing thereof), are
forward-looking statements. In some cases, you can identify
forward-looking statements because they contain words such as
“anticipate,” “believe,” “confident,” “contemplate,” “continue,”
“could,” “estimate,” “expect,” “forecast,” “going to,” “intend,”
“may,” “plan,” “potential,” “predict,” “project,” “propose,”
“should,” “target,” “will,” or “would” or the negative of these
words or other similar terms or expressions. DraftKings cautions
you that the foregoing may not include all of the forward-looking
statements made in this press release.
You should not rely on forward-looking
statements as predictions of future events. DraftKings has based
the forward-looking statements contained in this press release
primarily on its current expectations and projections about future
events and trends, including the current macroeconomic environment,
that it believes may affect its business, financial condition,
results of operations, and prospects. These forward-looking
statements are not guarantees of future performance, conditions or
results, and involve a number of known and unknown risks,
uncertainties, assumptions and other important factors, many of
which are outside DraftKings’ control and that could cause actual
results or outcomes to differ materially from those discussed in
the forward-looking statements. Important factors, among others,
that may affect actual results or outcomes include, but are not
limited to, DraftKings’ ability to manage growth; DraftKings’
ability to execute its business plan and meet its projections;
potential litigation involving DraftKings; changes in applicable
laws or regulations, particularly with respect to gaming; general
economic and market conditions impacting demand for DraftKings’
products and services; economic and market conditions in the media,
entertainment, gaming, and software industries in the markets in
which DraftKings operates; market and global conditions and
economic factors including the potential adverse effects of the
global coronavirus pandemic (or the emergence of additional
variants or strains thereof), as well as the potential impact of
general economic conditions, including inflation, rising interest
rates and instability in the banking system, on DraftKings’
liquidity, operations and personnel, as well as the risks,
uncertainties, and other factors described in “Risk Factors” in
DraftKings’ filings with the Securities and Exchange Commission
(the “SEC”), which are available on the SEC’s website at
www.sec.gov. Additional information will be made available in other
filings that DraftKings makes from time to time with the SEC. The
forward-looking statements contained herein are based on
management’s current expectations and beliefs and speak only as of
the date hereof, and DraftKings makes no commitment to update or
publicly release any revisions to forward-looking statements in
order to reflect new information or subsequent events,
circumstances or changes in expectations, except as required by
law.
Contacts
Media:
Media@draftkings.com
@DraftKingsNews
Investors:
Investors@draftkings.com
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