In a time of volatile trading due to the ongoing coronavirus pandemic, newly listed DraftKings and SBTech posted their first Q1 financials, showing year-on-year growth against a backdrop of combined losses.
The Q1 revenue generated by both companies was $112.99 million, ahead of $91.78 million year-on-year by 23.1 percent. From this, DraftKings was allocated $88.54 million, up from $68 million, and to SBTech $24.44 milliom ahead of $23.69 million.
Less encouraging was the news that net losses had deepened to $76.23 million (2019: $30.07 million), while losses suffered by the legacy DraftKings company hit $68.68 million , up 133 percent in 2019 from $29.55 million. SBTech recorded a $7.55-million loss from a $522,000 profit.
The adjusted Q1 EBITDA combined amounted to $50.38 million(2019: $15.72 million), with DraftKings dropping to $49.46 million (2019: $20.41 million) and SBTech showing a decrease of $920,000 from $4.69 million.
Jason Robins, the co-founder, CEO and Chairman 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.”
The firm said in its presentation that despite the effects of the COVID-19 pandemic it is continuing to make progress on key priorities. Those include joining new states, investing in product and technology to build more exclusive offerings and live sports betting, and attracting and retaining our clients.
The company has advised, on the outlook, that it does not expect an impact due to COVID-19 on FY2021 or long-term plans.
Robins suggested during the company’s Q1 conference call that simulated sports, especially football, might play a much broader 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.”
— DraftKingsNews (@DraftKingsNews) May 15, 2020