Share 
On its earnings call Friday morning, DraftKings’ reported 2021 Q4 negative earnings per share (EPS) of 35 cents. While this is better than estimates of negative 79 cents, the company is still seeing major losses for EBITDA. This is reflected in the full-year EPS of -$1.79 and comes against a backdrop of poor stock performance across 2021. At close on February 17, the day before the earnings call, the stock sat at $22.80 per share, down from its 2021 high of $71.98 on March 19.
The stock sunk further on the morning of the earnings call, to $17.67 as of this publication.
DraftKings Q4 and Total 2021 Earnings
The company’s earnings report showed revenue of $1.29 million for the full-year 2021. Despite this being an increase from $643 million in 2020, loss from operations increased to $1.5 million in 2021. This resulted in a negative adjusted EBITDA of $676 million, a larger loss from the negative $395 million in 2020.
The company’s press release points to its reported 2021 Q4 revenue of $473 million as an indicator of positive movement. The reported revenue showed an increase of 47% compared to the $322 million during the same period of 2020. The 2021 revenue also outperformed the company’s guidance for Q4 by 8%.
DraftKings’ CFO Jason Park explained on the earnings call the 8% was “due to strength across customer acquisition, retention, and monetization.”
Park further clarified if DraftKings hadn’t launched in New York and Louisiana in January, the company would expect to see a positive EBITDA by the end of 2022. The launch in new states is one of the primary contributors to the company’s negative EBITDA in 2021.
DraftKings is starting to see positive contribution profits from states in which it launched from 2018 through 2020, but these gains are offset by negative contributions from new states in 2021 and 2022. The driving factor of losses in new states is the spend on promotions to capture new players.
DraftKings 2022 Outlook
DraftKings maintains a positive outlook for this coming year. Park explained the company has “an increasingly clear view into making EBITDA positive,” with the foundational knowledge that states become profitable within two or three years of launch. The company already has 10 states that are profit positive and expects three more states will fall into that category for 2022.
Eyes are also on new markets, including Ohio, Maryland, Puerto Rico, and Ontario. The leadership said they plan to approach the United States locations with the same tactics used in other state launches. In Ontario, the company is not projecting the same level of market share because it lacks the early marketing advantage, as it is still waiting to be approved ahead of the April 4 launch. The leadership team did not address the differences in Ontario’s promotion laws, which would prevent the company from providing discounts and pay-to-play opportunities.
DraftKings’ reports and call pointed to several other opportunities for improvement. One of the major opportunities is the integration of Golden Nugget, which DraftKings acquired in August 2021. The company hopes to start seeing the benefit of running Golden Nugget on its in-house technology platform and overlapping marketing spend by the end of Q1 in 2022.
The company also pointed to the opportunity of growth with the Oregon Lottery, as DraftKings secured exclusivity in the state in early 2022. Additionally, the company is optimizing its Dynasty Rewards Program with new cross-product rewards and new in-person rewards.
Attention is also on growing the NFT portion of the company. Tests in 2021 encouraged the company to partner with the NFL to release a series of exclusive NFL player NFTs during the 2022-23 season. DraftKings customers will be able to use a gamified system to play the NFTs against each other and to trade their collection.
