Earnings+More - DraftKings, Penn lead sector gains
DraftKings, Penn lead sector gainsDraftKings ups guidance, Penn’s ESPN Bet plans, Entain’s strategy update, analyst takes +More
'Cause it's easy once you know how it's done. DraftKings ups guidanceUnder-promising and over-delivering is habit forming. Crushing it: As is now customary, DraftKings once again used its earnings announcement to up its guidance for the full year, saying its adj. EBITDA losses will now come in at $95m-$105m. This compares with predicted losses at the start of this year of $400m at midpoint and its last guidance of $190m-$220m in August.
The postman always delivers: Deutsche Bank suggested that “given high expectations”, the company needed sizable beats on both the net revenue and adjusted EBITDA lines, “and we believe these results delivered on that front”.
The switcheroo: Jefferies said the quarter “continues to raise the horizon level” for DraftKings, supporting its thesis that the leading online operators led by DraftKings are “pivoting from investment spending to profits through product advancement”.
Note: DraftKings will host its earnings call with analysts later today. 💥 DraftKings up over 7% in post-close trading ** SPONSOR’S MESSAGE ** Originally founded in 2003, BettingJobs grew rapidly and quickly matured into the full recruitment service provider we are today. We are a globally renowned resource for making qualified connections worldwide. Our industry experts will be attending SiGMA Malta 2023. If you are a candidate seeking your next iGaming role or a client in need of professional hiring advice, contact us to arrange a confidential meeting at the conference. Penn sets the datePlugging away: Ignoring signs of macro pressures on its regional casinos, the markets warmed to Penn Entertainment’s announcement, sending its shares up 14% as it set a November 14 launch date for ESPN Bet in 17 states. Jay Snowden, CEO, said the pre-Thanksgiving date meant it could take advantage of a hectic sports calendar.
The long game: Asked about what success would look like, Snowden said he hoped to see market share grow over time. “What we don’t want to have is a giant splash in the first month or two and then you leak market share,” he said. “That would not be deemed a success.”
Casino floor: In Q3, despite falls in three out of four regional segments, the casino business total revenues were higher than forecast at $1.62bn. However, adj. EBITDA was below forecast, slipping by 5.7% to $445m, but this was driven entirely by the cash spent on the ESPN Bet transition from Barstool.
Entain strategyMoney pit: In comments to analysts during Entain’s strategic update yesterday, CEO Jette Nygaard-Andersen seemed to indicate both partners in the BetMGM JV were ready to put more money into the business in order to “drive more market share”.
Let my people talk to your people: This appears to mark a reverse from previous comments, particularly from MGM Resorts, which has indicated on several earnings calls that it believed there was no need for BetMGM to get more cash because it was moving to self-sustainability.
Listening ears: Nygaard-Andersen also signaled that Entain’s strategy for bolt-on acquisitions has come to an end. Noting the skepticism of recent deals – particularly the pointed shareholder criticism of the £750m deal for STS in the summer – she said “we’ve listened”.
Peak drift: The strategy update came after Entain confirmed the details of its September revenue warning. After a 5% fall in pro forma NGR in Q3, the company yesterday warned of a ~£45m hit from poor sporting results in October. All this plus the impact caused by the bribery case £585m settlement with HMRC announced in the summer.
Long arm of the law: Nygaard-Andersen said that since she joined the business in early 2021, it had performed a “significant portfolio shift” with 100% of revenue from regulated or regulating markets. Barry Gibson, chair, noted Entain has exited ~140 “inappropriate” unregulated markets, costing the company around £100m in annual EBITDA.
ICYMIIn Compliance+More this week, the comments from ex-BHA CEO Nick Rust regarding the ”existential threat” posed to UK horseracing by the proposed financial risk checks was the lead from last week’s Reputation Matters event.
Earnings in briefGolden Entertainment: The owner of the Strat in Las Vegas said its Nevada segment had seen an improved performance driven by the recent renovations at the property.
Playstudios: The social gaming operator saw adj. EBITDA up 38% to $13.5m on revenues that rose ~5% to $75.9m. The company said the profit improvement was due to operational efficiencies, revenue diversification and cost containment. Analyst takesRush Street: Improvements in the underlying product offering in iCasino lie behind the company’s successful Q3, suggested the team at JMP, who noted “success is being driven through multi-player games, creating engagement and loyalty to the platforms”. They added that RSI has “leveraged its free-to-play and tournament product offerings, leading to higher levels of revenue”.
Bally’s: The stock market reaction on the day after Bally’s results, down 15% on Wednesday, was an overreaction, said the team at Truist who suggested investors were spooked by delays to new developments and the company’s existing leverage. ** SPONSOR’S MESSAGE ** EveryMatrix delivers iGaming software, solutions, content and services for casino, sports betting, payments, and affiliate/agent management to 300+ global Tier-1 operators and newer brands. The platform is modular, scalable, and compliant, allowing operators to choose the optimal solution depending on their needs. EveryMatrix empowers clients to unleash bold ideas and deliver outstanding player experiences in regulated markets. What we’re readingGulf digest: Dubai puts casino plans on hold but Abu Dhabi pushes on, says Bloomberg. NewslinesGnomic: Playtech has acknowledged rival Lottomatica’s success in the bidding for Italian-focused operator SKS365, saying it would “continue to take a prudent and rational approach” to future acquisitions. Hungary national lottery operator Szerencsejáték has gone live with its revamped TippmixPro online sportsbook via a partnership with EveryMatrix-owned OddsMatrix. Calendar
An +More Media publication. For sponsorship inquiries email scott@andmore.media. |
Older messages
Lottomatica’s big splash
Thursday, November 2, 2023
SKS365 buyout, Entain takes a hit, Seminole launch, Bally's tumble, slim-fit Sportradar, RSI profits +More
Caesars hails online frugality
Wednesday, November 1, 2023
Caesars positivity, IGT's lottery pull, Kambi deals, DarftKings's promo spend +More
Beats, misses, reviews, debt – the Halloween earnings mix
Monday, October 30, 2023
The week ahead, IGT shares wobble, Churchill Downs, gaming REITs calls reaction, startup focus – Golden Whale +More
Boyd’s ‘softness’ sparks a rout
Thursday, October 26, 2023
Boyd's wobble, Evolution delays, Betsson's boost, PointsBet regeneration +More
OSB’s reality show
Tuesday, October 24, 2023
In-depth look at Q3 datalines, analyst takes – DraftKings and FanDuel +More
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