DraftKings Crushes Records, Plans $1B Share Buyback

A Record-Breaking Quarter by the Numbers

The second quarter of 2025 was a standout period for DraftKings. The company reported $1.51 billion in revenue, a stunning 37% increase compared to the same period last year. This surge was fueled by strong customer engagement, an efficient strategy for acquiring new players, and favorable sports outcomes that boosted its sportsbook.

Profitability soared to new heights. DraftKings achieved a net income of $158 million and an Adjusted EBITDA of $301 million, more than double its previous record for that metric. The company’s adjusted gross margin also climbed significantly, reaching 48%, up from 43% a year prior.

This financial strength wasn’t just a one-quarter event. For the first half of 2025, DraftKings generated over $2.9 billion in revenue and turned a prior year loss into a $124 million net profit.

The Engine Room: More Users, More Spending

The secret to DraftKings’ success lies in a powerful two-part formula: attracting more users and increasing the value of each one.

The company grew its user base to an average of 3.3 million Monthly Unique Payers (MUPs) in the second quarter, a 6% increase year-over-year. While the recent acquisition of the lottery app Jackpocket contributed to this, DraftKings also saw strong organic growth.

More importantly, each of these users is spending more. The Average Revenue Per MUP (ARPMUP) jumped to $151, a 29% increase from the previous year. This growth comes from better retention of sportsbook wagers and smarter promotional spending, ensuring that customers remain active and engaged on the platform.

Smarter Growth: Acquiring Customers for Less

Perhaps the most impressive insight from the report is how efficiently DraftKings is growing. The company increased its number of new online sportsbook and iGaming customers by nearly 80% year-over-year. It achieved this while simultaneously slashing the cost to acquire each new customer (CAC) by over 40%.

This demonstrates a finely tuned marketing and operational machine. As CEO Jason Robins explained, the strong returns on investment mean the company will continue to invest in growth. “The market is growing quickly,” he said. “You’ve got to fish when the fish are biting, so to speak.” This performance suggests that the total U.S. online gaming market could be even larger than previously estimated.

A Bold New Strategy for High-Tax States

Faced with rising tax rates in states like Illinois and New Jersey, DraftKings unveiled a novel strategy. Starting January 1, 2025, the company plans to introduce a “gaming tax surcharge” in four states with tax rates above 20%.

The goal is to pass a portion of the tax burden directly to the consumer, making the cost transparent. Robins compared the move to hotel or taxi fees, explaining that it allows DraftKings to maintain reasonable margins and, crucially, to “compete with the illegal market,” which pays no taxes at all. This strategy, he argued, will enable the company to continue investing in its product and promotions in those states, rather than pulling back.

A $1 Billion Bet on Itself

The company’s strong performance and positive outlook culminated in a major announcement from its board: the authorization of a $1 billion share repurchase program. This move allows the company to buy back its own Class A common stock over the next two to three years.

“This inaugural authorization reflects our conviction in the strong trajectory of our business and our expectation that we will generate significant free cash flow in the coming years,” said Robins. It is a powerful signal to investors that the company’s leadership believes its stock is undervalued and a solid long-term investment.

This capital allocation strategy is paired with a clear focus on the core business. DraftKings recently divested its media company VSiN and shut down its NFT platform Reignmakers to eliminate distractions and double down on the U.S. online gaming market.

Beyond the Numbers

DraftKings is not just focused on financials; it is heavily investing in product innovation to keep users on its platform.

• For Sportsbook users, the company has launched in-house player prop bets, expanded its popular progressive parlays, and plans to integrate a “bet-and-watch” experience with NFL streaming. It has also improved the availability of live betting markets and enhanced its social features, which saw a 180% increase in wagers in the first half of the year.
• On the iGaming side, the DraftKings and Golden Nugget apps were ranked No. 1 and No. 2 in a recent third-party survey. The company is on track to double the number of new games released this year compared to last.

“We are continuing to differentiate ourselves by investing in new features and functionality for Sportsbook and iGaming,” Robins noted.

What’s Next for DraftKings?

Looking ahead, DraftKings is maintaining its full-year 2025 guidance. It expects revenue between $6.2 billion and $6.4 billion, likely landing near the top of that range. Adjusted EBITDA is projected to be between $800 million and $900 million.

These forecasts already account for a planned launch in Missouri and the higher tax rates in several states. They do not, however, include the potential upside from a future launch of regulated Prediction Markets. With a clear strategy, operational efficiency, and a confident outlook, DraftKings has positioned itself not just to compete, but to lead the rapidly evolving U.S. gaming landscape.