DraftKings Closes 2024 with $4.77B in Revenue, Eyes $6.45B Target for 2025
DraftKings closed out 2024 with record-breaking revenue growth, improved profitability, and a sharp focus on long-term expansion. The company’s full-year revenue reached $4.77 billion, marking a 30% year-over-year increase, while adjusted EBITDA surged to $181.3 million, up $332 million from the previous year.
Despite the positive momentum, DraftKings still reported a net loss of $507.3 million for the year. However, the company highlighted major milestones, including a record-low customer acquisition cost (CAC) and, for the first time, positive free cash flow.
Q4 Performance and Key Metrics
In Q4 2024, DraftKings generated $1.39 billion in revenue, a 13% increase from $1.23 billion in Q4 2023. Adjusted EBITDA came in at $89.5 million, continuing the company’s profitability trend.
The company’s monthly unique paying users (MUPs) increased 36% year-over-year to 4.8 million. However, average revenue per user (ARPMUP) dropped to $97, down 16% from 2023.
The decline was attributed to the Jackpocket acquisition, as lottery players typically spend less than sportsbook and iGaming customers.
2025 Outlook: Continued Growth and Expansion
DraftKings has raised its revenue forecast for 2025, now expecting to generate between $6.3 billion and $6.6 billion, with a midpoint of $6.45 billion, a 35% year-over-year increase.
The company reaffirmed its adjusted EBITDA guidance of $900 million to $1 billion.
Key financial expectations for 2025:
- Free cash flow: Expected to reach $850 million
- Gross margin: Projected to be 46-47%
- Sportsbook net revenue margin: Forecasted between 7.0-7.5%
- Structural sportsbook hold percentage: Expected to stabilize at 11.0%
- Stock-based compensation: Anticipated to be around 6% of revenue
Expansion and Product Development
CEO Jason Robins emphasized that DraftKings is strategically expanding its offerings and geographic footprint.
“We continued to efficiently acquire and engage customers, expand structural sportsbook hold percentage, and optimize promotional reinvestment in 2024 while simultaneously experiencing customer-friendly sports outcomes,” said Robins.
DraftKings plans to:
- Launch operations in Missouri and Puerto Rico, pending regulatory approvals.
- Expand live betting capabilities, leveraging recent acquisitions of Simplebet, Sports IQ Analytics, and Mustard Golf.
- Optimize its parlay offerings, boosting long-term profitability.
- Explore international markets beyond the U.S. and Canada as a long-term growth strategy.
Robins remains confident in DraftKings’ trajectory, stating:
“We are at the epicenter of a megatrend. Real-money online gaming is a large and growing industry with secular tailwinds behind it. We believe we are well-positioned to capture significant share.”
The company expects all four quarters of 2025 to be EBITDA-positive, with 80% of adjusted EBITDA coming in Q2 and Q4.
Additionally, the early 2025 performance has exceeded expectations, with a sportsbook hold percentage of 11% in January and 13% in early February.
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