DraftKings Inc (NASDAQ:DKNG) reported third-quarter earnings Friday before the market open. The company also issued fiscal 2021 revenue guidance for the first time.
Q3 Earnings: Revenue grew 42% year-over-year to $133 million in the third quarter for DraftKings. The company beat the street consensus of $131.8 million for the quarter.
Sales and marketing increased to $203 million for the third quarter due to being live in seven more states than last year’s third quarter.
“The resumption of major sports such as NBA, MLB and the NHL in the third quarter, as well as the start of the NFL season, generated tremendous customer engagement,” said CEO Jason Robins.
State and Canada Expansion: The big story for DraftKings could be the increase in states versus the prior year.
In the third quarter, DraftKings launched mobile betting in Illinois and iGaming in West Virginia.
“Illinois has quickly become the company’s fastest-growing state as well as one of its largest states in terms of handle,” said the company.
Since the end of the quarter, the company has also gone live in Tennessee. DraftKings is now in 10 states, which it says is more than any competitor in the industry.
The company covers 20% of the adult population in the United States for legal online sports betting. DraftKings is working on launching sports betting and iGaming in Michigan and sports betting in Virginia soon. These two states cover an additional 6% of the U.S. adult population.
Ontario, which would have the fifth largest population of U.S. states, was also mentioned as a catalyst as Canada lays out the groundwork for online sports betting. DraftKings has had daily fantasy sports in Canada since 2012.
What’s Next: DraftKings raised its guidance for the fiscal year. The company now sees revenue in a range of $540 million to $560 million.
The company also issued guidance for fiscal 2021 for the first time. The next fiscal year is expected to see revenue of $750 million to $850 million.
Both guidance figures assume no interruptions to major sports.
DraftKings shares are up 12% to $46.19 in pre-market trading.