BOSTON, Nov. 07, 2024 (GLOBE NEWSWIRE) -- DraftKings Inc. (Nasdaq: DKNG) ("DraftKings” or the "Company”) today announced results for the third quarter of 2024. The Company also posted a third quarter 2024 business update and an earnings presentation on the Investor Relations section of its website at investors.draftkings.com.
Third Quarter 2024 Highlights
For the three months ended September 30, 2024, DraftKings reported revenue of $1,095 million, an increase of $306 million, or 39%, compared to $790 million during the same period in 2023. The increase in the Company's third quarter 2024 revenue was driven primarily by continued healthy customer engagement, efficient acquisition of new customers, the expansion of the Company's Sportsbook product offering into new jurisdictions, higher structural sportsbook hold percentage, improved promotional reinvestment for Sportsbook and iGaming, and the impact of the acquisition of Jackpocket Inc. ("Jackpocket”), which closed on May 22, 2024.
"DraftKings delivered strong performance in the third quarter with the return of NFL and college football,” said Jason Robins, DraftKings' Chief Executive Officer and Co-founder. "With major sports converging on the calendar, we are well-positioned to build on this momentum as we further enhance our top-ranked sportsbook app with additional live betting features and exciting new NBA markets. Our focus remains on driving sustainable revenue growth and profitability in 2025 and beyond.”
"We achieved healthy results across our core value drivers in the third quarter with efficient customer acquisition and promotional reinvestment as well as improvement in our structural sportsbook hold percentage,” said Alan Ellingson, DraftKings' Chief Financial Officer. "The midpoint of our inaugural fiscal year 2025 revenue guidance equates to 31% year-over-year growth, and we are well-positioned to deliver $900 million to $1 billion of Adjusted EBITDA in 2025.”
Continued Healthy Growth in Customer Retention, Acquisition, and Engagement
- Monthly Unique Payers ("MUPs”) increased to 3.6 million average monthly unique paying customers in the third quarter of 2024, representing an increase of 55% compared to the third quarter of 2023. This increase reflects strong unique player acquisition and retention across DraftKings' Sportsbook and iGaming products, the expansion of its Sportsbook product into new jurisdictions and the impact of the acquisition of Jackpocket. Excluding the impact of the acquisition of Jackpocket, MUPs increased by approximately 27% compared to the third quarter of 2023.
- Average Revenue per MUP ("ARPMUP”) was $103 in the third quarter of 2024, representing a 10% decrease compared to the same period in 2023. The decrease was primarily due to lower ARPMUP for Jackpocket customers, when compared to customers of DraftKings' existing product offerings prior to the acquisition, partially offset by improvement in the Company's structural Sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming. Excluding the impact of the acquisition of Jackpocket, ARPMUP increased approximately 8% compared to the third quarter of 2023.
- Detailed financial data and other information for the third quarter of 2024 is available in the financial statements set forth below under the caption "Financial Results.”
- DraftKings is introducing a fiscal year 2025 revenue guidance range of $6.2 billion to $6.6 billion, which equates to approximately 31% year-over-year growth based on the midpoints of the Company's updated fiscal year 2024 revenue guidance range and the Company's fiscal year 2025 revenue guidance range.
- DraftKings continues to expect fiscal year 2025 Adjusted EBITDA to be in the range of $900 million to $1.0 billion, which the Company previously announced on August 1, 2024.
- DraftKings is revising its fiscal year 2024 revenue guidance due to the impact of customer-friendly sport outcomes early in the fourth quarter of 2024 to a range of $4.85 billion to $4.95 billion from the range of $5.05 billion to $5.25 billion, which the Company previously announced on August 1, 2024. The Company's updated 2024 revenue guidance range equates to year-over-year growth of 32% to 35%.
- DraftKings is revising its fiscal year 2024 Adjusted EBITDA guidance due to the impact of customer-friendly sport outcomes early in the fourth quarter of 2024, partially offset by promotional optimization and expense efficiency. The Company now expects fiscal year 2024 Adjusted EBITDA of between $240 million and $280 million compared to its prior fiscal year 2024 Adjusted EBITDA guidance of between $340 million and $420 million, which the Company previously announced on August 1, 2024.
- The Company's guidance for fiscal years 2024 and 2025 includes all of its existing mobile sports betting and iGaming jurisdictions as well as Jackpocket.
- DraftKings' revenue and Adjusted EBITDA guidance for fiscal years 2024 and 2025 does not include the impact of mobile sports betting launching in Missouri. DraftKings expects to launch its Sportsbook product in Missouri pending market access, licensure, regulatory approvals, and contractual approvals where applicable.
- DraftKings is live with mobile sports betting in 25 states and Washington, D.C. which collectively represent approximately 49% of the U.S. population.
- DraftKings is also live with iGaming in 5 states, representing approximately 11% of the U.S. population.
- DraftKings is live with its Sportsbook and iGaming products in Ontario, Canada, which represents approximately 40% of Canada's population.
- On November 5, 2024, Missouri voters passed a ballot initiative that legalized sports betting in the state. DraftKings expects to launch its Sportsbook product in Missouri pending market access, licensure, regulatory approvals, and contractual approvals where applicable.
- DraftKings expects to launch its Sportsbook product in Puerto Rico pending market access, licensure, regulatory approvals, and contractual approvals where applicable.
As previously announced, DraftKings will host a conference call and audio webcast tomorrow, Friday, November 8, 2024, at 8:30 a.m. ET, during which management will discuss the Company's results for the quarter and provide commentary on business performance. A question-and-answer session will follow the prepared remarks.
To listen to the audio webcast and live question and answer session, please visit DraftKings' investor relations website at investors.draftkings.com. A live audio webcast of the earnings conference call will be available on the Company's website at investors.draftkings.com, along with a copy of this press release, the Company's Quarterly Report on Form 10-Q, a slide presentation and a third quarter 2024 business update. The audio webcast will be available on the Company's investor relations website until 11:59 p.m. ET on December 31, 2024.
Financial Results
DraftKings' third quarter 2024 financial results, as well as the financial results for the respective comparative periods, are presented below:
| DRAFTKINGS INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (Amounts in thousands, except par value) | ||||||||
| | September 30, 2024 | December 31, | ||||||
| | (Unaudited) | 2023 | ||||||
| Assets | | |||||||
| Current assets: | | |||||||
| Cash and cash equivalents | $ | 877,822 | $ | 1,270,503 | ||||
| Restricted cash | 13,807 | 11,700 | ||||||
| Cash reserved for users | 264,886 | 341,290 | ||||||
| Receivables reserved for users | 341,817 | 301,770 | ||||||
| Accounts receivable | 64,358 | 47,539 | ||||||
| Prepaid expenses and other current assets | 81,207 | 98,565 | ||||||
| Total current assets | 1,643,897 | 2,071,367 | ||||||
| Property and equipment, net | 52,924 | 60,695 | ||||||
| Intangible assets, net | 891,910 | 690,620 | ||||||
| Goodwill | 1,456,009 | 886,373 | ||||||
| Operating lease right-of-use assets | 83,292 | 93,985 | ||||||
| Equity method investments | 12,598 | 10,280 | ||||||
| Deposits and other non-current assets | 132,346 | 131,546 | ||||||
| Total assets | $ | 4,272,976 | $ | 3,944,866 | ||||
| | | |||||||
| Liabilities and Stockholders' equity | | |||||||
| Current liabilities: | | |||||||
| Accounts payable and accrued expenses | $ | 700,720 | $ | 639,599 | ||||
| Liabilities to users | 930,614 | 851,898 | ||||||
| Operating lease liabilities, current portion | 11,277 | 11,499 | ||||||
| Other current liabilities | 4,124 | 46,624 | ||||||
| Total current liabilities | 1,646,735 | 1,549,620 | ||||||
| Convertible notes, net of issuance costs | 1,255,757 | 1,253,760 | ||||||
| Non-current operating lease liabilities | 75,762 | 80,827 | ||||||
| Warrant liabilities | 25,439 | 63,568 | ||||||
| Long-term income tax liabilities | 73,835 | 72,810 | ||||||
| Other long-term liabilities | 119,332 | 83,975 | ||||||
| Total liabilities | $ | 3,196,860 | $ | 3,104,560 | ||||
| Commitments and contingent liabilities | | |||||||
| | | |||||||
| Stockholders' equity: | | |||||||
| Class A common stock, $0.0001 par value; 900,000 shares authorized as of September 30, 2024 and December 31, 2023; 501,081 and 484,598 shares issued and 487,169 and 472,697 outstanding as of September 30, 2024 and December 31, 2023, respectively | $ | 47 | $ | 46 | ||||
| Class B common stock, $0.0001 par value; 900,000 shares authorized as of September 30, 2024 and December 31, 2023; 393,014 shares issued and outstanding as of September 30, 2024 and December 31, 2023 | 39 | 39 | ||||||
| Treasury stock, at cost; 13,912 and 11,901 shares as of September 30, 2024 and December 31, 2023, respectively | (490,352 | ) | (412,182 | ) | ||||
| Additional paid-in capital | 7,836,271 | 7,149,858 | ||||||
| Accumulated deficit | (6,306,377 | ) | (5,933,943 | ) | ||||
| Accumulated other comprehensive income | 36,488 | 36,488 | ||||||
| Total stockholders' equity | $ | 1,076,116 | $ | 840,306 | ||||
| Total liabilities and stockholders' equity | $ | 4,272,976 | $ | 3,944,866 | ||||
| DRAFTKINGS INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (Amounts in thousands, except per share data) | ||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | 1,095,490 | $ | 789,957 | $ | 3,374,927 | $ | 2,434,536 | ||||||||
| Cost of revenue | 742,434 | 543,454 | 2,115,917 | 1,575,517 | ||||||||||||
| Sales and marketing | 339,943 | 313,323 | 896,318 | 909,943 | ||||||||||||
| Product and technology | 103,581 | 89,005 | 285,051 | 266,999 | ||||||||||||
| General and administrative | 208,126 | 130,761 | 547,461 | 427,493 | ||||||||||||
| Loss from operations | (298,594 | ) | (286,586 | ) | (469,820 | ) | (745,416 | ) | ||||||||
| Other income (expense): | | |||||||||||||||
| Interest income | 9,200 | 14,420 | 38,479 | 39,626 | ||||||||||||
| Interest expense | (872 | ) | (670 | ) | (2,199 | ) | (1,991 | ) | ||||||||
| Gain (loss) on remeasurement of warrant liabilities | 21 | (7,751 | ) | (8,282 | ) | (44,827 | ) | |||||||||
| Other (loss) gain, net | (4,620 | ) | (1,217 | ) | (5,801 | ) | (1,153 | ) | ||||||||
| Loss before income tax (benefit) provision and loss from equity method investment | (294,865 | ) | (281,804 | ) | (447,623 | ) | (753,761 | ) | ||||||||
| Income tax (benefit) provision | (1,287 | ) | 1,291 | (75,208 | ) | 3,310 | ||||||||||
| Loss from equity method investment | 110 | 8 | 19 | 450 | ||||||||||||
| Net loss attributable to common stockholders |
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