DraftKings Reports Financial Growth and Raises 2024 Forecasts

Fourth Quarter Financial Highlights

In the quarter ending December 31, 2023, DraftKings reported a significant revenue increase to $1,231 million, up 44% from $855 million in the same period in 2022. This growth was attributed to robust customer engagement, strategic customer acquisitions, expansion into new jurisdictions, and innovative product offerings.

Despite unfavorable sport outcomes towards the end of November, which impacted revenue and Adjusted EBITDA by approximately ($175) million and ($126) million respectively, the company maintained strong performance.

Jason Robins, DraftKings’ CEO, expressed pride in the company’s ability to sustain growth in customer acquisition, retention, and engagement, alongside an improved sportsbook hold percentage despite challenging conditions in the fourth quarter.

Expanding Customer Base and Revenue Per User

The company saw a 37% increase in Monthly Unique Payers (MUPs), reaching an average of 3.5 million per month in Q4 2023, driven by successful customer retention and expansion efforts. The Average Revenue per MUP (ARPMUP) also saw a 6% rise to $116, primarily due to a higher sportsbook hold rate, although this was somewhat offset by customer-friendly sport outcomes.

Reflecting the strong fundamentals and successful customer acquisition in Q4, DraftKings has raised its 2024 revenue guidance to a range of $4.65 billion to $4.90 billion, indicating a year-over-year growth of 27% to 34%. The company’s Adjusted EBITDA expectations for 2024 have also been revised upwards to between $410 million and $510 million.

These revised forecasts do not yet account for the potential impact of DraftKings’ proposed acquisition of Jackpocket, which will be integrated into the guidance following the transaction’s closure.

Expanding Footprint in Mobile Sports Betting and iGaming

DraftKings continues to expand its reach, now live with mobile sports betting in 24 states and iGaming in 5 states within the U.S., as well as in Ontario, Canada. The company is set to launch its Sportsbook product in North Carolina on March 11, 2024, pending regulatory approvals.

The report also notes the legislative momentum across the U.S. for the legalization of mobile sports betting and iGaming, with several states introducing relevant legislation, indicating potential future growth avenues for DraftKings.

Conclusion: DraftKings’ Strong Market Position

DraftKings’ latest financial report and upward revisions for 2024 underscore the company’s robust position in the digital sports entertainment and gaming market.

Despite challenges, DraftKings continues to demonstrate strong customer growth, market expansion, and product innovation, setting a positive outlook for the future.