DraftKings reports mixed earnings, stock dips

Yahoo Finance Live's Brian Sozzi discusses first quarter earnings for DraftKings.

Video Transcript

BRAD SMITH: Also, we got to talk about DraftKings here on the day. We've been tracking shares there. And this was one that was actually higher premarket for a second. And it was higher by about 8% at one point. Right now, you're seeing it actually go the way of the broader markets, right now down. There's a look at the actuals versus the estimates. The actual came in above estimates there, $417.2 million during this most recent quarter. You also saw EPS, well, that came in a little bit worse than the expectations, so a little bit of a mixed bag here. $1.22 on the loss side versus the expected loss of $1.16 here.

I mean, it's really just about bringing more states online, quite frankly, for this company, because the comparisons, it's like clementines to oranges, if you will, because year over year, you've got more states that have signed up. As long as you are tapping into those states and making sure that any bid that you put forward to the state is accepted, then perceivably, you will get more clients in that new state.

And you've got this moving not just through elections, I mean, we've still got states that haven't brought it fully online, even after the 2020 election. And so, with that, there's still much more runway here for them. I mean, we'll see if they get back into the good graces of investors here, given the way that the broader markets are going.

JULIE HYMAN: Yeah, I mean, as we heard from our Josh Shafer yesterday, it's not just about customer acquisition. It's about how you get those customers and how much you have to pay to get those customers and what kind of deals and promotions and free money, effectively, you have to offer those customers.

I am struck here by the average revenue per player number here, $67, which is better than estimates. They had monthly unique payers or players, I guess, of two million, which is in line with estimates as well. But they have this revenue per monthly payer. What about the profit per monthly payer, I think is to the point of how much is it costing to get those folks in.

BRIAN SOZZI: We should remind everyone, of course, DraftKings lets you, in fact, bet on sports ball. I know a favorite of yours, Julie. And then, lastly, you mentioned how much they're making per transaction. This year, DraftKings is forecasting a huge loss, adjusted operating loss this year between $760 million to $850 million.

JULIE HYMAN: But it's a smaller loss than they had forecast before.

BRIAN SOZZI: Well, then, life is great, and that's fine. You continue to lose money as long as it's better than Wall Street estimates. I guess that's a great thing to be doing.

JULIE HYMAN: Well, our afternoon team can ask Jason Robbins, the CEO, about it because he's going to be joining them later this afternoon. That should be quite an interesting conversation.