DAVY VIEW

DraftKings reported Q2 results that were a little behind expectations, with the statement noting that performance would have been better than anticipated ex-sports results and higher levels of customer acquisition. It has, however, reiterated its guidance ranges for the year at both revenue and aEBITDA. The rhetoric in the shareholders letter on the initial success of its Prediction Market (PM) offering in non-regulated states is quite bullish, noting that engagement has surpassed its expectations. It is early innings, but we would take some comfort that the big online operators can attract PM customers in sports despite Kalshi’s headstart. DraftKings has reiterated FY guidance despite a small miss to expectations in Q2, with its main competitor taking the opposite tack. Focus on the earnings call will be on its confidence in delivering in the core against heightened competitive intensity.