DraftKings is poised for growth after its latest quarterly earnings report, showing promising numbers that could attract investor attention. The company’s earnings clocked in at 32 cents per share, marking a significant revenue increase of 37%, totaling $1.51 billion. This surpassed the market’s expectations, which pegged earnings at 15 cents per share on $1.42 billion in revenue.
In an encouraging detail, DraftKings reported an adjusted earnings figure of 38 cents, just shy of analyst predictions at 39 cents. Monthly unique players (MUPs) increased by 6%, reaching 3.3 million, although this was below the anticipated 3.85 million. However, a noteworthy point was the 29% rise in average revenue per MUP, which jumped to $151, exceeding analyst expectations of $122.23. The company attributed this growth to effective player retention strategies, signaling their ability to not only attract but also maintain users.
The sportsbook segment experienced substantial growth, with revenue soaring 45% to $997.8 million, far surpassing the $908 million forecast. The total amount wagered by bettors, known as the sportsbook handle, also rose by 6.3% to $11.47 billion. Moreover, iGaming revenue saw a nearly 26% increase to $429.7 million, just above market expectations of $429 million. Daily fantasy sports and other verticals also contributed positively, rising 27% to $84.97 million, exceeding the expected $83 million.
DraftKings has kept its revenue forecast intact for the year, anticipating figures between $6.2 billion and $6.4 billion. This prediction follows a revision made earlier in Q1, and CEO Jason Robins has hinted that revenue could trend towards the upper limit of this range.
Following the earnings announcement, DraftKings stock surged over 5%, climbing from a modest daily increase of about 1%. It’s currently positioned at the top of a buy zone for a cup-with-handle base, having successfully broken above the 43.59 buy point in early July. Year-to-date, shares have appreciated approximately 23%.
In the same realm, Flutter Entertainment, the parent company of DraftKings rival FanDuel, is also actively trading in a buy zone ahead of its own earnings report. Currently, Flutter’s shares are positioned above a critical buy point of 299.73, which could provide an interesting comparison as it approaches its financial results, expected to show a 54% earnings increase to $2.24 per share along with 14% revenue growth up to $4.13 billion.
In summary, both DraftKings and Flutter are navigating a highly competitive market but showing signs of robust growth, making them intriguing choices for investors looking for opportunities in the gaming sector.
