Newly Nasdaq-listed DraftKings and SBTech have posted their first Q1 financials amid a period of turbulent trading due to the ongoing coronavirus pandemic, showing year-on-year growth against a backdrop of combined losses.
Q1 revenue generated by both firms was $112.99m, ahead by 23.1% from $91.78m year-on-year. From that, $88.54m was attributed to DraftKings, up from $68m, and $24.44m to SBTech, ahead from $23.69m.
Less positive was the news that net losses had deepened to $76.23m (2019: $30.07m,) while losses incurred by the legacy DraftKings business reached $68.68m, 133% greater than $29.55m in 2019. SBTech recorded a $7.55m loss from a profit of $522,000.
Combined adjusted Q1 EBITDA was -$50.38m (2019: -$15.72m), with DraftKings falling to -$49.46m (2019: -$20.41m) and SBTech showing decline at -$920,000 from $4.69m.
Co-Founder, CEO and Chairman Jason Robins told investors: “We are uniquely positioned at the intersection of digital sports entertainment and gaming in a rapidly growing industry. DraftKings recorded standalone Q1 year-over-year revenue growth of 30% despite the effects of COVID-19. Additionally, the engagement we continue to see from our customers validates the connection they have with our content, their passion for our products and most importantly their loyalty to our brand.”
In its presentation, the firm said it continues to make progress on key priorities despite the effects of the COVID-19 pandemic. These include entering new states, investing in product and technology to create more unique offerings and live betting for American-based sports, and acquiring and retaining our customers.
On the outlook, the company advised that it does not anticipate an impact to FY2021 or long-term plans due to COVID-19.
During the firm’s Q1 conference call, Robins hinted that simulated sports, particularly football, could play a much wider role in the future. “There’s a lot of football fans that want football year round and that’s probably even enhanced by the fact there’s not a lot of other sports on TV and there’s a lot of people that are at home looking to watch things,” he said.
“So I think that’s something we’re keeping an eye on and there could be some potential to extend the NFL season really throughout the year through simulated sports. It will also work for other sports but in particular for the NFL because the NFL product is a scarce product. There are fewer games and it’s a shorter season than the other major sports so I think there’s a lot of potential there.”