By Dhirendra Tripathi
Investing.com – DraftKings stock (NASDAQ:DKNG) plunged 16.4% in premarket trading Friday after the sports betting firm added fewer customers in the fourth quarter than analysts estimated.
The company nearly doubled its expenses on sales and marketing in the year to $982 million, but managed to increase just about 32% to 2 million monthly unique paying customers on average on the platform.
According to Bloomberg, the company also forecast between $825 million and $925 million in adjusted loss excluding some items for the year; wider than estimated. “In the present environment where tech investors have displayed zero tolerance for large losses, the 2022 EBITDA guidance is going to be a disappointment,” the wire agency quoted Vital Knowledge analyst Adam Crisafulli.
The numbers from the company were a bigger surprise, given more states legalized sports betting this year and the firm spent a good part of its time tying up with various associations and sports bodies, including the National Football League, to entrench its sports betting services.
Fourth quarter revenue rose 47% to $473 million. Average revenue per monthly unique payer rose 19% to $77.
The company raised its annual revenue forecast to be between $1.85 billion and $2 billion, attributing the revision to last month’s permission to mobile sports betting in New York and Louisiana.