DraftKings increased its revenue guidance again after recording half-year revenue of $609.8m, up 282.3% from 2020, though losses also continued to grow as operating expenses exceeded $1.00bn.
Of the operator’s $609.8m in revenue, $530.9m came from its own gaming operations, up 281.7%. The operator said this increase was due to “strong customer acquisition and retention, the successful launches of our Sportsbook and igaming product offerings in additional states since the second quarter of 2020, and a more favorable sports schedule compared to the six months ended June 30, 2020, which was more substantially impacted by Covid-19.”
Gaming software revenue – mostly from the business formerly known as SBTech before it merged with DraftKings – was $58.9m, up 292.3%. Other revenue, meanwhile, was up 272.2% to $20.4m.
The business also said in its report that while SBTech had previously offered its services through a reseller in Asia, that this agreement was terminated on 1 April, with a transition period that has now expired.
The United States made up the vast majority of DraftKings revenue, at $549.6m, while the rest of the world brought in $60.2m.
However the operator’s expenses also continued to grow. Costs of revenue were $370.2m, up 311.1%, with most of the increase attributable to technology costs at SBTech.
Sales and marketing costs quadrupled to $399.4m, while product and technology costs were up 141.4% to $118.8m. General and administrative costs were $367.8m, a 150.5% increase.
This led to an operating loss of $646.3, 185.2% more than the operating loss recorded in 2020.
The business received $2.6m in interest income, but incurred a $10.0m expense due to money owed on warrants related to the SPAC merger that sent the business public.
This meant that DraftKings recorded a pre-tax loss of $653.7m, 10.2% more than in 2020.
After $2.1m in tax benefits and a $347,000 loss due to businesses in which DraftKings does not hold a controlling stake, the business made a net loss of $651.9m, compared to a $593.5m loss in the first half of 2020.
Looking just at the second quarter of 2021, DraftKings saw revenue more than quadruple to $297.6m. However, as expenses also continued to grow, operating losses doubled to $321.5m.
After non-operating costs and taxes, DraftKings made a net loss of $305.5m. This was less than the loss made in Q2 of 2020, largely due to a high expense in that year related to warrant liabilities.
“DraftKings had a particularly strong second quarter of 2021, maintaining our impressive financial performance while also advancing into new areas, such as media and NFTs,” Jason Robins, DraftKings’ chief executive and chairman, said. “We believe these expansion opportunities will enable us to further grow our customer base and generate additional revenues through cross-selling to our existing players.
Robins also revealed that DraftKings had completed its migration onto SBTech’s platform in 11 of the 12 states in which it operates. He said that this integration process now allows the business to offer same-game parlay bets.
“We also are excited that the migration to our proprietary in-house online sports betting technology is substantially complete, with only one state remaining pending approval.”
In addition, he revealed that DraftKings and Fanduel were working to gather signatures to put a referendum on the ballot to allow statewide commercial online sports wagering. In addition, he said the business plans on taking part in New York’s request for proposals for sports betting providers.
Jason Park, DraftKings’ Chief Financial Officer, added that the business was raising its revenue outlook again. The business now expects to bring in revenue between $1.21bn and $1.29bn for 2021. It had previously upped its revenue guidance to between $1.05bn and $1.15bn after Q1.
“We delivered strong growth in new customers and revenue. Our $298 million in second quarter revenue represents a 297% increase year-over-year. Additionally, we grew monthly unique payers by 281% and average revenue per monthly unique payer by 26%. We are again raising our revenue outlook for 2021 as we continue to expect robust growth in the states where we are currently live today.”