DraftKings Inc. (Nasdaq: DKNG) has reported its financial results for the fourth quarter and fiscal year 2024. The business also issued an update to shareholders, which is available on its Investor Relations page.
For the three months ended December 31, 2024, DraftKings reported revenue of US$1.39 billion (£1.1 billion/€1.33 billion), a 13% increase over $1.23 billion in the same period in 2023.
This growth was largely driven by increased client interaction, effective customer acquisition techniques, the expansion of the Sportsbook offering into additional countries, and greater sportsbook hold rates.
The Jackpocket Inc. purchase, which concluded on May 22, 2024, also helped to boost revenue. However, customer-friendly outcomes throughout the NFL season helped to counteract these benefits.
During the fourth quarter, DraftKings had strong growth in customer acquisition and retention, with Monthly Unique Payers (MUPs) averaging 4.8 million. This marks a 36% increase from the fourth quarter of 2023.
The growth reflects the development of the Sportsbook and iGaming offerings, as well as the acquisition of Jackpocket. MUPs increased by around 16% year on year, excluding the impact of the purchase.
The average revenue per MUP (ARPMUP) for the quarter was $97, a 16% decrease from the same time in 2023. This decline was mostly due to reduced ARPMUP from Jackpocket clients, as well as a lower real sportsbook hold rate, which was driven by customer-friendly sport results.
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However, the firm experienced an improvement in its structural sportsbook hold and promotional investments, which helped to mitigate the drop. Excluding the impact of Jackpocket, ARPMUP fell by around 4% from the fourth quarter of 2023.
DraftKings has revised the midpoint of its fiscal year 2025 revenue target, now estimating $6.3 billion to $6.6 billion. This reflects a 35% year-over-year increase based on the midpoint of fiscal year 2024 revenue and the revised fiscal year 2025 revenue range.
The business has also reaffirmed its fiscal year 2025 Adjusted EBITDA target of $900 million to $1.0 billion.
The company’s fiscal year 2025 projection does not take into account any gain from year-to-date sports outcomes, nor does it include the impact of mobile sports betting’s introduction in Missouri.
DraftKings presently offers mobile sports betting in 25 states and Washington, D.C., reaching about 49% of the US population.
The corporation now operates in five states for iGaming, which account for around 11% of the US population. Additionally, DraftKings has launched its Sportsbook and iGaming products in Ontario, Canada, which accounts for around 40% of the country’s population.
Following recent developments, DraftKings plans to introduce its Sportsbook product in Missouri and Puerto Rico, subject to market access, license, and regulatory clearances.
These results highlight DraftKings’ strong position in the rapidly expanding sports betting and iGaming industry, as seen by ongoing growth and greater interaction across its platforms.
“We continued to efficiently acquire and engage customers, expand structural sportsbook hold percentage, and optimize promotional reinvestment in fiscal year 2024, while we simultaneously experienced customer-friendly sport outcomes,” said Jason Robins, DraftKings’ CEO and Co-founder. “Looking ahead to 2025 and beyond, I am thrilled to improve our customer economics through new initiatives like as increasing our lead in live betting and expanding cross-sell activities to and from new verticals. Our primary goal is to achieve long-term revenue and profitability growth.
“2024 was a watershed moment for DraftKings, as we achieved our first year of positive Adjusted EBITDA. Furthermore, we began carrying out our first share repurchase authorization,” stated Alan Ellingson, DraftKings’ Chief Financial Officer. “With strong underlying health across our core value drivers, we are raising the midpoint of our fiscal year 2025 revenue guidance to $6.45 bn from $6.4 bn and reaffirming our fiscal year 2025 Adjusted EBITDA guidance range of $900 million to $1.0 bn.”
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