DraftKings stock rallies as revenue remains strong in Q4 2022

The world’s leading sportsbook brand, DraftKings, has posted an update for its fourth-quarter and full-year results for 2022, with the company making a narrower-than-expected loss per share and delivering on strong overall performance in so far as revenue goes.

The results helped prop up the company’s share value on Friday, which went up by 15.33% at closing time. Shares were last trading at $20.54 and is performing well in general. Over the last year, DraftKings’ shares have been able to notch up a 10.49% overall gain in value, and increase by 109.59% over the past five years, bolstered by the legalization of sports gambling.

Yet, DraftKings’ letter to its shareholders was one of sobering pragmatism. The company chief executive, Jason D. Robins began the address with a simple realization that the days of "free money" were gone.

Robins was simply referring to the fact that investors are becoming disinclined to invest in companies that aren’t turning a profit and posting losses. It was no longer necessary to drive only drive revenue. This is now changing with investors looking to back companies that can both increase their revenue, but also ensure that they are bringing more tangible value to their shareholders.

He spoke about the options that remained ahead of the company, giving examples with three "types" of companies, and affirming DraftKings’ determination to be everything its shareholders expect it to be. The chief executive then went on to hail the results posted by the company during the fiscal year 2022.

He praised the $2.2bn posted in revenue for the full year, which was a 73% year-over-year increase, and ahead of the company’s guidance that put the results at anything between $1.85bn and $2bn originally. EBITDA for the fiscal year 2022 was posted at $722m, the executive noted, demonstrating the company’s ability to grow and navigate the dynamics of a world that is changing rapidly.

In terms of quarterly results, the company once again outperformed expectations, giving itself a strong conclusion for the fiscal year. Revenue in the fourth quarter stood at $855m and adjusted Q4 EBITDA was $50m, or $25m when accounting for launches in Ohio and Maryland, the company informed.

DraftKings is very optimistic about what is to follow next as well, as the company’s midpoint guidance for the fiscal year 2023 is set at $2.95bn, an impressive overall outlook for the company. DraftKings also noted that 18 out of 19 states contributed profitable results to the company, and at least 11 states are expected to improve on those results in the new year.

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