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DraftKings Q3 Earnings & Revenues Miss Estimates, Stock Down
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DraftKings Inc. (DKNG - Free Report) reported tepid third-quarter 2024 results with earnings and revenues missing the Zacks Consensus Estimate. However, both top and bottom lines increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company’s third-quarter results were driven by the return of NFL and college football. With major sports events aligning on the calendar, DraftKings is positioned to build on this momentum. DKNG plans to enhance its top-ranked sportsbook app with new live betting features and expand into NBA markets. The company’s focus is on driving sustainable revenue growth and profitability in 2025 and beyond.
Following the announcement, the company’s shares lost 5.9% in yesterday’s after-hours trading session.
Investors’ sentiment was negatively impacted by DKNG’s decision to lower its fiscal 2024 guidance for revenues and adjusted EBITDA, due to the impact of customer-friendly sports outcomes early in the fourth quarter of 2024.
Inside the Headlines of DKNG’s Q3
In the third quarter, the company reported an adjusted loss of 60 cents per share, wider than the Zacks Consensus Estimate of a loss of 42 cents. DraftKings reported an adjusted loss per share of 61 cents in the prior-year quarter.
Revenues of $1095.5 million also missed the consensus mark of $1,122 million by 2.3%. However, the top line grew 39% on a year-over-year basis. This upside was driven by strong customer engagement and efficient new customer acquisition. Also, the expansion of DraftKings’ Sportsbook into new markets, higher sportsbook hold percentage, improved promotional reinvestment and the impact of the Jackpocket acquisition (closed on May 22, 2024) contributed to the growth.
Adjusted EBITDA loss was $58.5 million, down from $153.4 million reported in the year-ago quarter.
Other Operating Highlights of DKNG
During the quarter, Monthly Unique Payers (MUPs) increased 55% year over year to 3.6 million average monthly unique paying customers. This growth was driven by strong customer acquisition and retention across DraftKings’ Sportsbook and iGaming products. The expansion of the Sportsbook into new markets also contributed to the rise. Additionally, the acquisition of Jackpocket played a role in boosting MUPs. Excluding the Jackpocket impact, MUPs still grew by approximately 27% year over year.
However, the Average Revenue per MUP (ARPMUP) of $103 declined 10% year over year, due to lower ARPMUP from Jackpocket customers compared with DraftKings’ existing products. This was partially offset by improvements in Sportsbook’s hold percentage and better reinvestment in promotions for both Sportsbook and iGaming. Excluding the Jackpocket acquisition, ARPMUP grew 8% year over year.
DKNG’s Financial Information
As of Sept. 30, 2024, DraftKings had cash and cash equivalents of $877.8 million compared with $1,270.5 million as of Dec. 31, 2023.
At the end of the first nine months of 2024, net cash provided by operating activities was $92.6 million compared with $73.8 million in the year-ago period.
DKNG’s Fiscal 2024 Guidance Trimmed
For fiscal 2024, the company now estimates revenues in the range of $4.85-$4.95 billion, down from the previous estimate of $5.05-$5.25 billion. This updated guidance reflects year-over-year growth of 32% to 35%.
Adjusted EBITDA is expected to be between $240 million and $280 million, down from the prior estimate of $340-$420 million.
DKNG’s Fiscal 2025 Outlook
For fiscal 2025, DKNG expects revenues of $6.2-$6.6 billion, indicating approximately 31% year-over-year growth, considering the midpoints.
Adjusted EBITDA is expected to be between $900 million and $1 billion.
Hyatt Hotels Corporation (H - Free Report) delivered third-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
The company reported a 3% increase in comparable system-wide hotel RevPAR compared with the same period in 2023. However, comparable system-wide all-inclusive resorts’ Net Package RevPAR declined 0.9% year over year. As of Sept. 30, 2024, Hyatt had a pipeline of executed management or franchise contracts for approximately 690 hotels (or about 135,000 rooms).
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported solid third-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.
Management attributed the performance to the strength of NCLH's business model, the appeal of its product offerings across brands and the effective execution by both shoreside and shipboard teams. Driven by high demand and a focus on cost control and margin enhancement, the company has raised its full-year guidance for a fourth time, anticipating 2024 to set new records for revenues, Net Yield growth and adjusted EBITDA.
MGM Resorts International (MGM - Free Report) reported third-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The top line increased year over year, while the bottom line declined from the prior-year quarter.
During the quarter, the company reported sequential improvements in Las Vegas, driven by growth in Average Daily Rate and occupancy levels. It emphasized advancements in digital investments and an impressive pipeline of integrated resort developments in Japan, New York and other markets to drive growth in the upcoming periods.
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DraftKings Q3 Earnings & Revenues Miss Estimates, Stock Down
DraftKings Inc. (DKNG - Free Report) reported tepid third-quarter 2024 results with earnings and revenues missing the Zacks Consensus Estimate. However, both top and bottom lines increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company’s third-quarter results were driven by the return of NFL and college football. With major sports events aligning on the calendar, DraftKings is positioned to build on this momentum. DKNG plans to enhance its top-ranked sportsbook app with new live betting features and expand into NBA markets. The company’s focus is on driving sustainable revenue growth and profitability in 2025 and beyond.
Following the announcement, the company’s shares lost 5.9% in yesterday’s after-hours trading session.
Investors’ sentiment was negatively impacted by DKNG’s decision to lower its fiscal 2024 guidance for revenues and adjusted EBITDA, due to the impact of customer-friendly sports outcomes early in the fourth quarter of 2024.
Inside the Headlines of DKNG’s Q3
In the third quarter, the company reported an adjusted loss of 60 cents per share, wider than the Zacks Consensus Estimate of a loss of 42 cents. DraftKings reported an adjusted loss per share of 61 cents in the prior-year quarter.
Revenues of $1095.5 million also missed the consensus mark of $1,122 million by 2.3%. However, the top line grew 39% on a year-over-year basis. This upside was driven by strong customer engagement and efficient new customer acquisition. Also, the expansion of DraftKings’ Sportsbook into new markets, higher sportsbook hold percentage, improved promotional reinvestment and the impact of the Jackpocket acquisition (closed on May 22, 2024) contributed to the growth.
DraftKings Inc. Price, Consensus and EPS Surprise
DraftKings Inc. price-consensus-eps-surprise-chart | DraftKings Inc. Quote
Adjusted EBITDA loss was $58.5 million, down from $153.4 million reported in the year-ago quarter.
Other Operating Highlights of DKNG
During the quarter, Monthly Unique Payers (MUPs) increased 55% year over year to 3.6 million average monthly unique paying customers. This growth was driven by strong customer acquisition and retention across DraftKings’ Sportsbook and iGaming products. The expansion of the Sportsbook into new markets also contributed to the rise. Additionally, the acquisition of Jackpocket played a role in boosting MUPs. Excluding the Jackpocket impact, MUPs still grew by approximately 27% year over year.
However, the Average Revenue per MUP (ARPMUP) of $103 declined 10% year over year, due to lower ARPMUP from Jackpocket customers compared with DraftKings’ existing products. This was partially offset by improvements in Sportsbook’s hold percentage and better reinvestment in promotions for both Sportsbook and iGaming. Excluding the Jackpocket acquisition, ARPMUP grew 8% year over year.
DKNG’s Financial Information
As of Sept. 30, 2024, DraftKings had cash and cash equivalents of $877.8 million compared with $1,270.5 million as of Dec. 31, 2023.
At the end of the first nine months of 2024, net cash provided by operating activities was $92.6 million compared with $73.8 million in the year-ago period.
DKNG’s Fiscal 2024 Guidance Trimmed
For fiscal 2024, the company now estimates revenues in the range of $4.85-$4.95 billion, down from the previous estimate of $5.05-$5.25 billion. This updated guidance reflects year-over-year growth of 32% to 35%.
Adjusted EBITDA is expected to be between $240 million and $280 million, down from the prior estimate of $340-$420 million.
DKNG’s Fiscal 2025 Outlook
For fiscal 2025, DKNG expects revenues of $6.2-$6.6 billion, indicating approximately 31% year-over-year growth, considering the midpoints.
Adjusted EBITDA is expected to be between $900 million and $1 billion.
DKNG’s Zacks Rank
DraftKings currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
Hyatt Hotels Corporation (H - Free Report) delivered third-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
The company reported a 3% increase in comparable system-wide hotel RevPAR compared with the same period in 2023. However, comparable system-wide all-inclusive resorts’ Net Package RevPAR declined 0.9% year over year. As of Sept. 30, 2024, Hyatt had a pipeline of executed management or franchise contracts for approximately 690 hotels (or about 135,000 rooms).
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported solid third-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.
Management attributed the performance to the strength of NCLH's business model, the appeal of its product offerings across brands and the effective execution by both shoreside and shipboard teams. Driven by high demand and a focus on cost control and margin enhancement, the company has raised its full-year guidance for a fourth time, anticipating 2024 to set new records for revenues, Net Yield growth and adjusted EBITDA.
MGM Resorts International (MGM - Free Report) reported third-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The top line increased year over year, while the bottom line declined from the prior-year quarter.
During the quarter, the company reported sequential improvements in Las Vegas, driven by growth in Average Daily Rate and occupancy levels. It emphasized advancements in digital investments and an impressive pipeline of integrated resort developments in Japan, New York and other markets to drive growth in the upcoming periods.