Entering this week’s earnings release, DraftKings faced some pressure from investors to exhibit an improved outlook after previously indicating that it could generate profitability by the second half of this year.
Now that it topped analysts’ expectations with the company’s 2023 first-quarter results, DraftKings may be ahead of schedule. In projecting improved 2023 adjusted EBITDA guidance this week, DraftKings now anticipates breaking even on an adjusted EBITDA basis by this year’s second quarter. Adjusted EBITDA is typically defined as the amount a company earns over a given period before interest, depreciation, and amortization. The metric also removes any one-time, non-recurring items that may distort a company’s EBITDA on a given quarter.
DraftKings reported adjusted EBITDA of negative $221.6 million for the three-month period ended March 31, doing better than analysts’ estimates of a loss of $261 million. The company also generated revenue of $770 million, an increase of 84% from the same period in 2022, beating analysts’ expectations for revenue of $705 million. DraftKings cited operational efficiencies from high customer acquisition rates and “healthy customer retention” among the factors for the strong quarter.
DraftKings Stock Surges On Strong Q1 Earnings Results; Is DKNG Stock A Buy Right Now? $DKNG #ER 10.98% ????https://t.co/uJ20cBjF64 via @YahooFinance