Shares of DraftKings Inc. (NASDAQ: DKNG) were up over 4% in afternoon hours on Friday. The stock has gained over 304% since the beginning of this year. The company saw strong revenue growth during the third quarter of 2020 driven by higher engagement levels due to the return of major sports events.
Revenues increased 98% year-over-year to $133 million during the third quarter. On a pro forma basis, revenues grew 42%. Revenues in the B2C segment, which includes iGaming, increased 55% year-over-year while revenues in the B2B segment were up 11%.
DraftKings saw a spike in customer engagement due to the return of major sports. During the quarter, the company had over 1 million monthly unique payers (MUP). MUPs for the B2C segment increased 64% year-over-year, driven by product innovation, engagement in Sportsbook and iGaming as well as player base expansion. Engagement levels were also driven higher by the shelter-in-place orders during the pandemic.
DraftKings continues to invest significantly in its products and technologies. The company is seeing good progress on the technology migration of SBTech which it expects to complete by the third quarter of 2021.
During the quarter, the company rolled out various new products and features including a standalone casino app for iGaming as well as new DraftKings-created games for online casino. The new games include versions of blackjack, roulette and baccarat. Last month, the company unveiled its mobile and online sportsbook PalaceBet through its partner in South Africa.
DraftKings expects pro forma revenue to grow 25-30% to a range of $540-560 million for fiscal year 2020. MUPs are expected to increase versus last year. For 2021, revenues are expected to be $750-850 million. The company believes that the growth in online sports betting and iGaming as well as the return of major sports events will prove to be beneficial to its growth in the coming months.
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