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)
(5)
(6)
(amounts in thousands)
Revenue
Cost of revenue
Sales and marketing
Product and technology
General and administrative
Loss from operations
Interest income (expense), net
Loss on remeasurement of warrant liabilities
Loss before income tax provision
Income tax provision
Loss from equity method investment
Net Loss
Adjusted For
Depreciation and amortization (¹)
Interest (income) expense, net
Income tax provision (benefit)
Stock-based compensation (²)
Transaction-related costs
Litigation, settlement, and related costs"
Advocacy and other related legal expenses
Loss on remeasurement of warrant liabilities
(3)
(4)
(6)
Other non-recurring costs and special project costs
Adjusted EBITDA
(5)
Nine months ended September 30,
2021
822,700
540,980
703,056
184,016
587,509
(1,192,861)
1,071
(2,905)
(1,194,695)
1,654
549
(1,196,898)
88,600
(1,071)
1,654
499,246
15,261
8,933
27,702
2,905
5,501
(548,167)
2020
321,279
218,177
307,530
120,070
257,596
(582,094)
(2,713)
(411,269)
(996,076)
3,904
380
(1,000,360)
73,252
2,713
3,904
187,239
3,585
5,771
411,269
4,671
(307,956)
The amounts include the amortization of acquired intangible assets of $59.9 million and $54.1 million for the nine months ended September 30, 2021 and 2020, respectively.
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 Chief Executive Officer and 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 pending or completed
transactions and offerings. The transaction costs related to the Business Combination described in footnote 1 to the preceding table 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.
Includes primarily external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.
Includes certain non-recurring costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain products and are actively seeking licensure, or similar
approval, for those products. For 2021, those costs primarily relate to California and Florida. The amount excludes other recurring costs relating to advocacy efforts and other legal expenses
incurred in jurisdictions where related legislation has been passed and we currently operate.
Includes primarily consulting, advisory and other costs relating to non-recurring items and special projects, including the implementation of internal controls over financial reporting, as well as
our equity method share of the investee's losses.
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