DraftKings stocks surged by 17% during early trading on Friday as the sports betting company posted better-than-expected fourth-quarter financial results.
While the company experienced an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) loss, the size of the loss was significantly less than expected. As a result, the company projected a narrower-than-expected loss for 2023 while affirming its belief in its ability to achieve profitability in 2024.
In Q4, DraftKings generated a revenue of $855 million, thereby beating Wall Street expectations of $798.64 million. This translated to adjusted earnings per share of -$0.53; a narrower loss than the expected -$0.59 per share.
“I am very excited about 2023,” DraftKings CEO Jason Robins stated following the release of the Q4 results. “We are more focused than ever on expense management. Since our previous earnings call in November, we have made surgical decisions backed by strong analysis about our expenses and action items.”
The legalization of sports betting has been a primary driver in the company’s growth, with DraftKings now operational in 21 U.S. states, either in terms of retail or online betting.