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DraftKings CEO on Q2 earnings, achieving nearly 300% revenue growth compared to 2020

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Draftkings CEO Jason Robins projects when investors can expect his company to reach profitability.

Video Transcript

[BUZZING]

- All right, when we talk about earnings, we got to talk about DraftKings. They reported second quarter revenue of $298 million. They increased their 2021 revenue guidance to $1.21 billion or possibly $1.29 billion. Don't take it from me. Let's bring into the stream once again Jason Robins, DraftKings CEO. Congratulations on the upped guidance. I know the analysts have all kinds of questions for you. I don't even know if it's at this stage of your development, but one thing that people want to know is when do you start turning profit?

JASON ROBINS: Well, what we've said is that each new state takes about two to three years to turn profitable. So far we've delivered on that with New Jersey being profitable last year and kicking off even more cash this year, last year being its, you know, year two. And we have a couple more states that are coming up on the two-year mark at the end of this year that we'll be talking about and reporting out on in the, you know, probably Q1 time frame. So really the question is what's the cadence and pace of states and which ones come when. That'll ultimately dictate when profitability occurs. But when a new state launches, we're going to invest into it and we continue to believe that two to three-year time frame is appropriate for when we expect a new state to get profitable.

- Jason, going through some of your numbers here, the revenue growth year-over-year up almost 300%, the monthly unique payers up 281%. I think there was some concern going into this year whether or not we would see as many people as active on your platform. That's certainly seems to be the case. It doesn't seem to be an issue for you. I guess how are you keeping your users and your customers engaged?

JASON ROBINS: You know, it really starts first with product. We want to provide a great product and a great customer experience. And I think that's the most important thing. We also try to come up with new and innovative things to keep people interested. We're an entertainment product. so we view it as, not just competing against others in our direct industry, but really anywhere that somebody can spend their time or discretionary entertainment spend. So we have to keep it interesting for our players. And, you know, we really want first and foremost to them-- for them to think of us as the innovator in the space.

And then lastly another way that we look at it is how do we make the games-- the sports that people already love more exciting? If they're going to watch the sports or at least they're going to watch some sports, can we get them to watch more and can we make it a more exciting experience? And I think if we do those things, we'll keep a very engaged customer.

- I'm thinking of interviews we've had in the past with people like yourself, CEOs, C-suite folk from streaming services, and it would seem to me the integration of sports streaming with DraftKings could lead to exponential growth. Can you update us on when-- I might not have to go to your-- I can go to either of the platforms, a partnership where you might have like a Yahoo Sports and I could start playing whether I'm watching the game or not via your platform.

JASON ROBINS: Well, that's certainly something we've looked at. We recently announced a deal with Major League Baseball where we'll be able to watch, you know, I think a game every week, I want to say. I may have messed that up. But we're going to be able to have people watch games directly on the DraftKings platform.

Also, you know, as you've noted, we have looked at ways to do it the other way around, including our partnership with DISH Network where people can connect their DraftKings account. And while they're watching their TV or whatever other device, DISH customers can see their scores. And even though the transaction technically occurs on our platform, it's seamless to the customer because what they're ultimately doing is connecting their device-- their regulated device, which is usually a mobile phone, with the-- with their DISH Network account. So really those are just a couple of examples and we're still at the very early stages. We hired a chief media officer from Verizon, a guy named Brian Angiolet. We're really pleased with-- he's about 90 days in. He has all sorts of great ideas that he's going to pursue. And, as you noted, we'll do those through some things we develop organically and also a lot of it will be done through partnerships with other great media companies and platforms.

- Jason, speaking of that growth, I guess how does this all fit into your future strategy because you're doing this with media, you also have an interest in NFTs. Just talk to us just about the opportunity that you see in those two areas.

JASON ROBINS: Well, we think that both those are very large categories. NFTs are obviously nascent, but we think it's going to be a very large TAM. And obviously the media business is huge. There's hundreds of billions of dollars, you know, that consumers spend every year on products. So really I think two big-- one obviously a potential, one already big industries from a revenue standpoint-- the other important thing is the synergy we see with our business-- with our current business lines, our current product set. So, you know, our gaming products are ultimately a CAC to LTV thing. And the more products that we can cross-sell our customers into, the higher our retention numbers will be, the higher our LTVs will be. And then the more products we have to be able to acquire customers on to, the higher our customer acquisition numbers at lower CAC. So, you know, really that's the crux of it. It's big markets that we see as very high potential, but also things that are very synergistic and help drive that CAC to LTV equation for our business.

- It's almost 10 years since you helped co-found DraftKings, we look forward to celebrating that anniversary with you and have you back on before then. I want to thank the DraftKings CEO Jason Robins for joining us, wishing you and the team the best. When we--