(Bloomberg) — DraftKings Inc. raised its revenue and earnings expectations for the year, while a planned launch in Canada is poised to give the online gambling company an additional boost.
Sales this year will be $1.93 billion to $2.03 billion, up from a prior expectation as low as $1.85 billion, according to a statement Friday detailing first-quarter results. The midpoint of the new range is above Wall Street’s expectation and implies as much as 56% growth over the prior year.
The revised forecast wasn’t enough to overcome broader market losses, as DraftKings’ shares erased premarket gains to fall 3.8% at 9:38 a.m. in New York.
DraftKings has grown revenue and attracted loyal bettors amid heightened competition from new online peers and legacy casinos. That has forced the company to spend millions on advertising and gambling incentives while still generating losses. DraftKings expects an adjusted loss before interest, taxes, depreciation and amortization of as much as $840 million in 2022, an improvement over its prior expectation.
“We are encouraged to see a reduced guided profit loss, but acknowledge losses remain significant, and does not include many new markets expected to open,” Benchmark analyst Mike Hickey wrote in a note.
The revised outlook doesn’t include its recently closed takeover of Golden Nugget Online Gaming or its planned launch in Ontario, Canada, in the second quarter. The combination is expected to drive an additional $130 million to $150 million in revenue for 2022, the company said.
Boston-based DraftKings posted first-quarter revenue of $417 million, narrowly topping Wall Street’s forecast for $414.9 million. Monthly unique players for the quarter were two million, matching estimates, while the average revenue per player was stronger than expected.
The company hasn’t seen “any impact from inflationary pressures on customer demand,” Chief Executive Officer Jason Robins said in the statement.
(Updates share trading in third paragraph)
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