DraftKings Results Presentation Deck
PRO FORMA DRAFTKINGS P&L AND ADJUSTED EBITDA RECONCILIATION
Pro Forma Adjusted EBITDA
We define and calculate Pro
Forma Adjusted EBITDA as pro
forma net loss (giving effect to the
Business Combination as if it were
consummated on January 1,
2019) before the impact of interest
income or expense, income tax
expense or benefit and
depreciation and amortization, and
further adjusted for the same
items as Adjusted EBITDA.
(1)
(2)
(3)
(4)
(in thousands, except percentages)
Revenue
Cost of revenue
Sales and marketing
General and administrative
Product and technology
Loss from operations
Interest income (expense), net
Loss before income tax expense
Income tax benefit (expense)
Loss from equity method investment
Net Loss
Adjusted for:
Depreciation and amortization
(excluding acquired intangibles)
Amortization of acquired intangibles
Interest (income) expense, net
Income tax (benefit) expense
Stock-based compensation (1)
Transaction-related costs (2)
Litigation, settlement, and related
costs (3)
Other non-recurring costs and
special project costs (4)
Other non-operating costs
Pro forma Adjusted EBITDA
Three months ended September 30,
2019
Pro Forma
$ 93,318
(49,295)
(59,804)
(27,698)
(23,954)
(67,433)
497
$
2020
Actual
132,836
(96,569)
(203,339)
(127,376)
(53,909)
(348,357)
686
(347,671)
13
(95)
$ (347,753)
$
7,828
18,767
(686)
(13)
117,035
3,585
2,419
1,645
95
(197,079)
$
$
(66,936)
4,312
(62,624)
4,087
17,857
(497)
(4,312)
1,981
1,328
710
444
(41,026)
Nine months ended September 30,
2020
2019
Pro Forma
321,279
(218,177)
Pro Forma
269,259
(137,208)
(307,530)
(131,789)
(257,596)
(88,015)
(120,070)
(67,192)
(582,094)
(154,945)
(2,713)
1,330
(584,807)
(3,904)
(380)
$ (589,091)
$
$
19,102
54,150
2,713
3,904
187,239
3,585
5,771
4,291
380
(307,956)
$
$
The amounts for the three and nine months ended September 30, 2020, primarily reflect stock-based compensation expenses resulting from the issuance of awards under long-term incentive plans and,
for the nine months ended September 30, 2020, the issuance of our Class B shares (which have no economic or conversion rights) to our CEO, and $10.9 million due to the satisfaction of the
performance condition, immediately prior to the consummation of the Business Combination, on stock-based compensation awards granted to SBTech employees in prior periods.
Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with transactions and offerings. The
transaction costs related to the Business Combination described in footnote 2 on the following page have been eliminated in calculating our pro forma net income for the nine months ended September
30, 2020 pursuant to the principles of Article 11 of Regulation S-X. In 2019, these costs related to exploratory acquisition activities.
Includes primarily external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.
Includes primarily consulting, advisory and other costs relating to non-recurring items and special projects, including, for the three and nine months ended September 30, 2019, the cost of our move to
our new Boston headquarters, executive search costs and, for the three and nine months ended September 30, 2020, implementation of internal controls over financial reporting and tax structuring
advisory costs.
(153,615)
13,036
(140,579)
11,609
54,134
(1,330)
(13,036)
9,106
2,603
2,411
1,816
(73,266)
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