A resumption of major sporting and entertainment events might explain Draftkings Inc. (NASDAQ:DKNG)'s impressive Q3 numbers. The digital sports entertainment and gaming company is flying high the charts after reporting numbers that affirm growth in the core business amid the COVID-19 shocks.
COVID-19 Risks
The stock rose by as much as 10% as investors reacted to raising the full-year revenue forecast, coming when most companies are cautious about long-term prospects. The Boston-based company expects revenues of between $540 million and $560 million, representing a 25% to 30% increase and above the previous guidance of between $500 million.
However, it won’t be a walk in the pack heading into the year-end. For the company to achieve 25% to 30% revenue growth, all sporting events key to the betting business must be in play. That is not a sure thing, given the rate at which the COVID-19 pandemic is taking a toll prompting new waves of restrictions and lockdowns.
College football programs have already been put on hold in the wave of coronavirus cases rising rapidly. College basketball is also in doubt in the Ivy League's wake, confirming the cancellation of all winter sports season.
Impressive Q3
Amid growing concerns of business activities in the fourth quarter, DraftKings had an impressive third-quarter depicted by an increase in monthly unique players by 64%, conversely topping 1 million. An increase in active players can be attributed to, among other things, rapid data-driven sales and marketing approaches.
Third-quarter revenue topped analysts’ estimates on coming in at $133 million against consensus estimates of $131.7 million. Revenue growth stems from a robust product offering and scalable platform that continues to offer a distinctive and personalized experience for customers.
During the quarter, DraftKings unveiled several technology enhancements and product features designed to enhance user experience. Likewise, it unveiled a standalone casino app in Pennsylvania and West Virginia designed to offer a more holistic product suite and dynamic gaming experience.