Revenue Analysis
Total and Operating Revenue: DKNG has shown variability in its revenue streams over the recent quarters. In the most current data (Q1 2024), the total revenue stands at approximately $1.175 billion and the operating revenue at about $1.158 billion. This presents a slight decrease when compared with the December 2023 figures, where the total revenue was around $1.231 billion and the operating revenue was $1.21 billion. The trend suggests a peak in late 2023 with a subsequent decline moving into 2024.
Gross Profit Margins: Gross profit has also fluctuated, peaking at $514.199 million in December 2023 before falling to $464.927 million by March 2024. This reflects changes in revenue and cost dynamics over the period.
Cost Management
Cost of Revenue: The cost of revenue was highest in December 2023 at $716.658 million and slightly lower at $710.069 million by March 2024. This metric directly impacts the gross profit margins and indicates the varying cost structures the company navigates.
Operating Expense: Operating expenses have seen a significant variance, with a value of $603.765 million in March 2024. This is markedly lower than the December 2023 figure, which was $558.008 million.
Total Expenses: Total expenses reflect similar trends, standing at $1.314 billion in March 2024 down from $1.275 billion in December 2023, indicating tight control in the face of revenue fluctuations.
Profitability Analysis
EBITDA: EBITDA has been negative across the board but showed improvement, from -$230.889 million in September 2023 to -$89.42 million by March 2024, suggesting some recovery in operational efficiency.
Operating Income: Operating income has been consistently negative, with a loss of -$138.838 million in March 2024, a slight improvement relative to the -$438.09 million in December 2023.
Pretax Income and Net Income: Pretax income was -$143.249 million, while net income rested at a significant loss of -$142.568 million in March 2024. Both metrics depict the challenges in reaching profitability.
Cash Flow Indicators
Reconciled Depreciation: Depreciation values are notable with an expense of $53.18 million in March 2024, indicative of significant asset investments and their corresponding depreciation costs.
Interest Expense: The interest expenses have remained relatively stable and low, indicating manageable debt levels or favorable credit terms.
Taxation
Tax Rate and Tax Provision: Tax provision was -$351,000 in March 2024, reflecting unusual income tax accounting related to loses. The tax rate applied appears exceptionally low given substantial pre-tax losses.
Tax Effect of Unusual Items: There were significant tax effects from unusual items, about -$44.335 million in March 2024, reflecting substantial non-recurring items being factored into the tax calculations.
Shareholder Metrics
Diluted and Basic EPS: Both diluted and basic EPS were consistently negative, at -$0.3 in March 2024, indicating a challenging period for shareholders focused on earnings per share.
Average Shares and Net Income Available to Common Stockholders: Average shares outstanding have been fairly stable at around 474.228 million in March 2024, with net income available to common stockholders matching the net loss figures.
Conclusion
DKNG has faced substantial challenges in achieving profitability, with consistent losses in operating income and net income. Cost management shows effective controls, though not sufficient to offset the revenue shortfalls and escalating operating expenses over time.