DraftKings Inc. reported $466 million in revenue in Q2 2022, although its overall net loss before adjustments was $217 million.
The adjusted EBITDA beat expectations by 40% but was much higher compared to last year, with a loss of $118.1 million in Q2 2022 vs. $95.3 million in Q2 2021.
The second quarter numbers were, however, a significant improvement compared to Q1 2022, which posted a net loss of $467.6 million and an adjusted EBITDA of negative $289.5 million, and DraftKings also improved its full-year EBITDA guidance by $60 million, forecasting a loss of no more than $800 million.
Over the last year, DraftKing's monthly unique players for legal sports betting rose 30% year-over-year, hitting the 1.5 million threshold, with the brand averaging $103 in revenue per bettor.
Combining with that increase in users is a rise in parlay bets on the platform. DraftKings has seen a 17% increase in parlays — which yield significantly higher hold rates for operators — and hopes to build off this area by adding more same-game parlay options... and letting bettors combine multiple same-game parlays in the near future.
DraftKings currently operates in 17 states, representing around 36% of the U.S. population. With more states legalizing online sports betting, DraftKings is looking at Maryland, Puerto Rico, Ohio, and Kansas as the next places to expand.
In May 2022, DraftKings also launched in Ontario, Canada, but it has struggled to gain a similar market share as in the U.S.
"We thought it would be more of a slower grind" the company noted on the earnings call, while viewing its launches across the U.S. as more of a "green field."
Promotion and advertising pullback
DraftKings fielded a volley of questions on the call, regarding acquisition and user costs seeing as other sportsbooks have reported pullbacks. DraftKings noted that in every state, after its initial jump in customer costs, there is a consistent year-over-year pullback.
This will be especially true for New York and its 51% tax rate.
For the most part, advertising contracts for DraftKings are flexible, allowing them to make changes based on the overall market. This, however, is not helpful when it comes to TV and in-game advertising.
DraftKings noted on the call that in these areas, the entire betting space is limited, so despite a softening in advertising as a whole, it doesn’t benefit DraftKings and its competitors.
But on spending overall: "Yes, there is a reduction."
