Earnings Report Roundup: Revenues Beat Estimates, but Losses Mounting

Dave Bonderoff

Last Updated: March 9, 2022 6:40 AM EST • 4 min 8 sec read. Twitter link Google News Link

NEW YORK, NY - JANUARY 08: Traders work on the floor of the New York Stock Exchange during the morning of January 8, 2016 in New York City. U.S. markets have declined over the past week due to market losses in China. Andrew Burton/Getty Images/AFP (Photo by Andrew Burton / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

Earnings reports from a host of high-end U.S. sportsbooks have started to trickle in the last few weeks and give us a snapshot of the state of the industry as we head into spring.

Revenues seem to have climbed across the board, but so has the cost of doing business. The result is mixed results for sportsbooks. Earnings before interest, taxes, depreciation, and amortization (EBITDA) figures and stock prices have dropped dramatically in some cases, creating a few red flags for current and hopeful providers hoping to infiltrate the North American legal sports betting scene.

Flutter's earnings call came Tuesday morning, Scientific Games will hold its investor call Tuesday, Rush Street will have their chance to share their quarterly information Wednesday, Entain Thursday, and DraftKings' Investor Day starts Thursday morning at 9 am EST.

Let's take a peek at a few sportsbooks that have already released recent quarterly reports.

DraftKings

DraftKings is one of the sportsbooks that all others measure themselves against. It's has been 10 or so days since the company released its Q4 numbers. Of note, DraftKings went through costly launches in New York and Louisiana during their last fiscal quarter.

DraftKings Q4 revenue was reported to be $473 million, a 46.9% year-over-year increase which beat Wall Street estimates by $27.32 million or about 8%.

https://twitter.com/DraftKingsNews/status/1494643382303526925

Adjusted EBITDA projections for the full year 2022 now stand at losses in the $825 million to $925 million range, which reflects the aforementioned cost of doing business. Without launches in New York and Louisiana Q4 EBITDA, numbers would have been in the black.

Monthly unique players (MUP) for DraftKings’ B2C segment increased 32% during the quarter. And the company has serious aspirations for further expansion plans still - into Ohio, Maryland and into Canada in this quarter or next.

“DraftKings’ strong fourth quarter performance exceeded our expectations on the top and bottom line,” said Jason Robins, DraftKings’ co-founder, Chief Executive Officer and Chairman of the Board. “Our excellent quarter capped off a year in which five of our states were Contribution Profit positive, further demonstrating the effectiveness of our state playbook and supporting our positive view of the industry’s TAM. We enter 2022 positioned to grow our market share, further optimize our user experience and continue to strengthen our multi-product suite of offerings.”

Flutter

Flutter, which has the FanDuel brand under its umbrella is out with some preliminary results from its 2021 reporting period – their quarterly report for FanDuel hasn’t been released just yet. The numbers are certainly encouraging for Flutter but were mixed, just like their main rival, DraftKings.

Revenue growth for 2021 was reportedly 37% up year-over-year from $5.9 billion in 2020 to $8.1 billion last year. Average monthly players for the sports betting site grew 23% to 7.6 million.

Flutter experienced much of the same “cost of doing business” in 2021 as reflected by the adjusted EBITDA which fell 18% in 2021, from $1.65 billion in 2020 to $1.34 billion last year. Net debt for the company came in at $3.55 billion for 2021, a slight drop from the $3.78 billion in 2020.

FanDuel was Flutter’s star during 2021. Their revenues increased 113% to $1.9 billion in 2021, and the company reached an impressive 40% online sportsbook market share in the U.S. during the fourth quarter.

Rapid expansion of the brand along with the growing customer acquisition costs affected Flutter’s bottom line, but based on FanDuel’s performance there is a huge sense that the company, thanks in part to FanDuel and the American market, is on a good path as we head deeper into 2022.

Caesars

Caesars continues to be one of the market leaders of the U.S. legal sports betting industry having developed a strong presence in 22 U.S. jurisdictions. The company came out with their Q4 report on Tuesday, February 22 and they were mixed. Earnings missed Zacks Consensus Estimates, but revenues actually beat estimates.

Caesars is reporting a loss of $433 million in Q4, which actually narrowed their overall loss to $1.02 billion

On the positive side, net revenues came in at $2,591 million which is better than the Zacks estimate of $2,584 million and significantly better than the net revenues of $1,585 million from Q4 last year. Word of the net revenues saw Caesars stock jump 5%.

Caesars now has a healthy 21% market share in the U.S. legal sports betting industry.

https://twitter.com/ButlerBets/status/1496252195506991111

Perhaps the biggest news out of Caesars strategy going forward is the company vowing to cut advertising spending. While it frightened some investors and raising sone alarm bells within the U.S. legal sports betting universe, Caesars CEO Tom Reeg struck a more measured tone when he said:

“You are going to see us dramatically curtail our traditional media spend effectively immediately. We have accomplished what we set out to do. We set out to become a significant player, and it’s happened significantly quicker than we thought.”

Penn National

Penn National released their Q4 report at the beginning of February. The company acknowledged familiar missed earnings, despite the supposed injection of new customers from the Barstool Sportsbook and the estimated 144 million social media users tied to the Barstool brand.

Through it all however, the Penn National brand performance was better than expected. Like other sportsbooks we have seen, the company missed Zacks Consensus Estimate earnings but bettered their projected revenue targets.

Penn National net revenues totaled $1.572.5 million, beating the consensus mark of $1.518 million by 3.59%. The $1.572.5 million was a 53.1% increase from the same three-month period last year.

Share price earnings for Penn National, despite good news on revenues, were 26 cents per share, missing the Zacks estimate of 46 cents. Overall, the stock is down about 10% on the year.

Penn National, like other competing sportsbooks has spent a lot of money on brand enhancement and customer acquisition. They had to and have to keep doing so in order to keep up in a crowded and increasingly competitive market.

Make sure to keep an eye on our Live Odds page throughout the week to get the best lines possible and connect with others in the SBR community on our popular sports betting forum.

Written By:
Dave Bonderoff

Dave Bonderoff and betting go hand-in-hand. Both are characterized by "odds". Dave fancies himself as one of the most dedicated sports and pop-culture junkies around, to the chagrin of his family and friends. Following sports for 50 years and writing about it for 20, Dave hasn't found a sport yet that can't contribute to 2-3 straight hours of couch time. That search remains ongoing. As a good old Canadian boy, hockey is in Dave’s heart, as is curling sadly. But evolution is a real thing and that’s why football, baseball, and just about every sport on the planet has become a passion. Dave isn’t afraid to kill some time obsessing over politics or the far-too-frequent awards shows the consume the airwaves.