DraftKings, one of the most popular daily fantasy sports and contest providers online, has announced that its revenue skyrocketed during the second quarter of this year during the pandemic to of $70.9m. The increase equated to a 24% increase when compared to second quarter results from 2019. Its adjusted EBITDA resulted in the company posting a loss of $57.5m for the same period.
Despite the loss, DraftKings have stated that they finished the year without debt and in excess of over $1.2 billion in cash. The increase in earnings is partly attributed to the companies follow up to its successful equity offering and the exercising of public warrants. This resulted in DraftKings adding in excess of over $800 million to its balance sheet. While most major league sports were cancelled as a result of COVID-19, its investment into the fantasy sports arena allowed it to prosper when others were struggling.
Overall, DraftKings first quarter results saw its reported revenue increasing 27% to $159.5 million. Their success has helped fuel growth after DraftKings announced its acquisition of SBTech. The Diamond Eagle Acquisition Corporation will finance the deal, which was announced in December of last year in a market capitalisation deal that is estimated to be worth $3.3 billion.
The operator further announced that its second quarter revenue would have increased to $75 million had the merger completed prior to the 1st of January. Speaking on DraftKing’s performance, its CEO and chairman, Jason Robins, said: “We believe that the best product will ultimately win with the American consumer. As a technology first organisation, we will continue to focus on bringing new and innovative products to market that strengthen our engagement with customers and maintain our competitive differentiation.”
DraftKings operates as an American daily fantasy sports betting and sports contest provider. The premise of the business allows members to register for daily and weekly fantasy sports contents whereby they can win money based on the performance of a specific team, player or group of players. It currently offers contents for all major sports in the US including the NFL, NHL, NBA, PGA and MLB, in addition to Canada’s CFL, NASCAR, MMA and Tennis.
Built around a model for success, it has seen the MLB invest in the company while it also signed advertising contracts with several leading broadcast companies. Furthermore, in recent years, DraftKings has enjoyed partnership agreements with the NFL, UFC, NASCAR and a host of NBA, MLB and NHL teams.