US sports betting giant DraftKings has published its Q1 2021 financial results, in which its revenue grew significantly year-on-year.
Despite its positive performance, though, the operator’s sales and marketing costs meant that its losses continued to deepen.
The company has increased its revenue guidance for 2021 after announcing its performance, with the operating loss almost five times as high as in the first quarter of last year.
How did DraftKings perform?
Revenue in the three months ending on 31st March totalled $312.3 million, which was 175% higher than in Q1 2020. The majority of this – $272.7 million – was derived from online gaming.
$31.4 million of DraftKings incomings came from online software. Retail sports betting, in addition to other B2C areas, made up the remaining $8.4 million.
As a result of its financial performance, the company is upping its guidance for the full year of 2021. Before, it had expected to generate between $900 million and $1 billion; this has now risen to $1.05 billion-$1.15 billion.
DraftKings Co-Founder, CEO and Chairman Jason Robbins commented on the results. He had the following to say.
“DraftKings is off to a fantastic start in 2021.
“We continued to make progress and remain on track with the migration to our own in-house proprietary sports betting engine, strengthened our content and technology capabilities with the acquisitions of VSiN and BlueRibbon Software, and invested in further differentiating our product offering with the upcoming rollout of social functionality in our DFS and mobile Sportsbook apps.”
Overall, DraftKings’ operating losses in Q1 2021 reached $324.8 million. This was almost five times as high as in the first quarter of 2020.
General and admin costs made up $169 million, while technology cost $51.2 million. Once the company had paid taxes – of which it contributed $4.6 million in its markets – the final loss for Q1 2021 was $346.3 million. This was 404.7% higher than the loss made in Q1 2020.
Regulus spoke about DraftKings’ results. The company said that DraftKings’ financial power could prove a serious challenge for other operators in the US: “This level of financial firepower and the willingness to deploy it so aggressively rewrites the rules of online gambling engagement that have applied for around 20 years.
“Competing with a nearly $1.0bn annual marketing budget running at 80% revenue and backed up with $2.8bn of cash requires significant differentiation, very deep pockets, the patience of Job, or even deeper reserves of bloodyminded stupidity.”