Shares of DraftKings Inc. soared after-hours on Thursday following the release of its second-quarter earnings report. The online sports-betting platform reported a surprise profit for Q2 and raised its full-year sales forecast. This positive momentum comes as the company continues to benefit from the expansion of legalized sports betting in various U.S. states.
DraftKings has revised its full-year sales outlook to a range of $3.46 billion to $3.54 billion, up from the previous range of $3.135 billion to $3.235 billion. This updated forecast surpasses the estimates provided by FactSet, which projected sales of $3.28 billion.
According to DraftKings Chief Financial Officer Jason Park, the company’s success can be attributed to effective customer acquisition strategies, sustained customer retention, and ongoing product innovation. By implementing these measures, DraftKings has been able to reduce promotional activities, resulting in better financial performance.
In terms of financials, DraftKings reported impressive results for Q2 with revenues reaching $874.9 million, a significant increase from the $466.2 million recorded in the same quarter last year. Adjusted for specific factors such as amortization and stock-based compensation, DraftKings achieved a profit of 14 cents per share, exceeding analysts’ expectations. FactSet had predicted an adjusted per-share loss of 25 cents on revenue of $765 million.
Despite reporting a net loss of $77.3 million on a GAAP basis, DraftKings experienced a 8.9% surge in share price after the earnings announcement. Throughout the year, the company’s stock has seen an impressive 170% increase. However, DraftKings faces competition from other players in the market such as Fanatics, FanDuel, and Barstool Sportsbook.