Shares of online sports betting platform DraftkKngs Inc (NASDAQ: DKNG) traded lower Friday morning after reporting second-quarter results.
What Happened: DraftKings said it lost 55 cents per share in the second quarter on revenue of $70.93 million. By comparison, Street analysts were expecting the company to lose 19 cents per share on revenue of $63.9 million.
Pro forma adjusted EBITDA loss widened from negative $15.635 million in the same quarter last ear to negative $59.917 million.
DraftKings ended the quarter with more than $1.2 billion in cash and zero debt on the balance sheet. The cash balance is the result of a follow-on equity offering in June when it added more than $800 million to the balance sheet.
The cash position allows the company to enter new states as soon as legally possible, invest in products and technologies to bring new offerings, along with acquiring and retaining customers, the company said.
The stock was down 5.6% to $34.01 at the time of publication.
Related Link: 2 Reasons To Own DraftKings Despite Risk Related To College Football Hiatus
Why It’s Important: DraftKings navigated through a difficult environment with the absence of major league sports by engaging fans with new sports and betting products for NASCAR, golf, UFC, and European soccer.
But the company saw an acceleration in its business when the MLB, NBA, WNBA, NHL, and MLS resumed their respective seasons and playoffs.
“We believe that the best product will ultimately win with the American consumer,” said Jason Robins, DraftKings Co-Founder, CEO and Chairman of the Board. “As a technology first organization, we will continue to focus on bringing new and innovative products to market that strengthen our engagement with customers and maintain our competitive differentiation.”
What’s Next: The company introduced full-year 2020 pro forma revenue guidance of $500 million to $540 million, representing a potential year-over-year growth rate of 22% to 37% in the back half of 2020. The guidance assumes professional sports complete their seasons and playoffs as currently scheduled.
DraftKings does not currently expect an impact to its long-term plans due to the COVID-19 pandemic.
Photo credit: World Poker Tour, Flickr
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.