DraftKings Cuts 2025 Revenue Forecast After Betting Outcomes Favored Users In Q1: Retail Bullish On Strong Fundamentals

DraftKings' (DKNG) quarterly report last week showed that demand for sports betting held strong despite economic uncertainty, although outcomes of sporting events that favored consumers led to weaker sales.

The sports betting company said revenue rose to $1.41 billion from $1.17 billion in the first quarter, missing the analysts' estimate of $1.43 million from FactSet.

The weak quarter forced the company to taper its 2025 revenue guidance to $6.2 billion to $6.4 billion from $6.3 billion to $6.6 billion earlier.

"If not for customer-friendly sport outcomes in March, we would be raising our fiscal year 2025 revenue and Adjusted EBITDA guidance," CEO Jason Robins said.

The past quarter saw big tournaments like the Super Bowl, where the underdog Philadelphia Eagles clinched victory, and March Madness.

DraftKings reported the bottom line above estimates. Profit rose to $0.12 per share, on an adjusted basis, from $0.03 a year earlier. Analysts polled by FactSet expected $0.07.

Monthly Unique Payers (MUP) increased 28% to 4.3 million, while Average Revenue per MUP declined 5% to $108.

Shares of the company have gained over 5% since Thursday, when it published the results.

Jefferies called the outlook cut a "clearing event," according to The Fly.

The investment firm, which maintained a 'Buy' rating, sees "several positive aspects" for the company, including the strong prospects for in-play betting.

On Stocktwits, the retail sentiment jumped to 'extremely bullish' from 'bullish' the previous week.

A user said, "The NBA playoffs have been very favorable to the books / punishing the favorites/public," lending momentum to the stock.

DraftKings stock is down 2.6% year to date.

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