dkng-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________ to ___________.

Commission file number 001-41379

DRAFTKINGS INC.

(Exact name of registrant as specified in its charter)


Nevada			87-2764212
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

222 Berkeley Street, 5th Floor

Boston, MA 02116

(Address of principal executive offices) (Zip Code)

(617) 986-6744

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report).

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value

DKNG

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 3, 2023, there were 461,865,825 shares of the registrant’s Class A common stock, par value $0.0001 per share, and 393,013,951 shares of the registrant’s Class B common stock, par value $0.0001 per share, outstanding.

DraftKings Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended March 31, 2023

Table of Contents


			Page
PART I. FINANCIAL INFORMATION			2
Item 1. Financial Statements			2
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
Item 4. Controls and Procedures			31
PART II. —OTHER INFORMATION			32
Item 1. Legal Proceedings			32
Item 1A. Risk Factors			39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			39
Item 3. Defaults Upon Senior Securities			39
Item 4. Mine Safety Disclosures			39
Item 5. Other Information			39
Item 6. Exhibits			40

PART I. - FINANCIAL INFORMATION

Item 1. Financial Statements.

DRAFTKINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except par value)


	March 31, 2023
	(Unaudited)		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	1,087,668	$	1,309,172
Cash reserved for users	436,935		469,653
Receivables reserved for users	124,536		160,083
Accounts receivable	41,423		51,097
Prepaid expenses and other current assets	115,194		94,836
Total current assets	1,805,756		2,084,841
Property and equipment, net	62,273		60,102
Intangible assets, net	754,509		776,934
Goodwill	886,373		886,373
Operating lease right-of-use assets	60,804		65,957
Equity method investment	9,961		10,080
Deposits and other non-current assets	159,598		155,865
Total assets	$	3,739,274	$	4,040,152

Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	508,725	$	517,587
Liabilities to users	670,456		686,173
Operating lease liabilities, current portion	3,975		4,253
Other current liabilities	48,733		38,444
Total current liabilities	1,231,889		1,246,457
Convertible notes, net of issuance costs	1,251,758		1,251,103
Non-current operating lease liabilities	66,466		69,332
Warrant liabilities	27,715		10,680
Long-term income tax liability	69,238		69,858
Other long-term liabilities	74,428		70,029
Total liabilities	$	2,721,494	$	2,717,459
Commitments and contingent liabilities (Note 12)

Stockholders' equity:
Class A common stock, $0.0001 par value; 900,000 shares authorized as of March 31, 2023 and December 31, 2022; 471,723 and 459,265 shares issued and 461,634 and 450,575 outstanding as of March 31, 2023 and December 31, 2022, respectively	$	46	$	45
Class B common stock, $0.0001 par value; 900,000 shares authorized as of March 31, 2023 and December 31, 2022; 393,014 shares issued and outstanding as of March 31, 2023 and December 31, 2022	39		39
Treasury stock, at cost; 10,089 and 8,690 shares as of March 31, 2023 and December 31, 2022, respectively	(359,491)		(332,133)
Additional paid-in capital	6,869,647		6,750,055
Accumulated deficit	(5,528,949)		(5,131,801)
Accumulated other comprehensive income	36,488		36,488
Total stockholders’ equity	$	1,017,780	$	1,322,693
Total liabilities and stockholders’ equity	$	3,739,274	$	4,040,152

See accompanying notes to unaudited condensed consolidated financial statements.

DRAFTKINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Amounts in thousands, except loss per share data)


	Three months ended March 31,
	2023		2022
Revenue	$	769,652	$	417,205
Cost of revenue	521,740		313,379
Sales and marketing	389,133		321,452
Product and technology	88,088		81,352
General and administrative	160,476		216,606
Loss from operations	(389,785)		(515,584)
Other income (expense):
Interest income	11,795		801
Interest expense	(655)		(653)
(Loss) gain on remeasurement of warrant liabilities	(17,035)		12,681
Other income, net

SEC Form 10-Q filed by DraftKings Inc.