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Shares of DraftKings closed down 28% on Friday after the sports betting company reported slower monthly customer growth in the third quarter that fell short of estimates.
The company raised its revenue guidance for the year, however, after revenue for the quarter came in above Wall Street expectations. Its loss for the period wasn’t as steep as expected.
For the quarter ended Sept. 30, DraftKings said its monthly unique paying customers increased to 1.6 million, up about 22% from 1.3 million a year ago. That was short of the 2 million that analysts projected, according to StreetAccount, and slower than in the previous two quarters.
DraftKings said the expansion of its online Sportsbook product, launched in September, will help drive customer acquisition, engagement and retention.
Following the launch of its online Sportsbook in Kansas in September, DraftKings said it is live with mobile sports betting in 18 states, representing about 37% of the U.S. population. It said it plans to launch in Maryland, Puerto Rico, Ohio and Massachusetts pending licensure and regulatory approvals.
“Our team continued to drive top-line growth through highly effective customer engagement and compelling product and technology enhancements while remaining focused on our path to profitability,” said Jason Robins, DraftKings’ co-founder and CEO.
For the quarter ended Sept. 30, the company reported a net loss of about $450 million, or $1 a share, compared with a loss of $545 million for the same period last year. Analysts expected a loss of $1.04 per share.
Revenue for the period rose to $502 million, which was higher than the $437 million Wall Street expected.
The company raised its revenue guidance for 2022 to a range of $2.16 billion to $2.19 billion, up from its previous estimate of between $2.08 billion and $2.18 billion.