DraftKings raises revenue guidance for 2024 after 53% growth in Q1
New state launches in Vermont and North Carolina aided revenue growth, but operational loss remains…
DraftKings has reported its financial figures for the first quarter of 2024, highlighting a positive start to the new year.
Q1 2024
Revenue in the first quarter of the year for the operator totaled $1.18bn, representing an increase of 53% year-over-year. This growth has been attributed to “healthy customer engagement,” including attracting new customers and an expansion of the sportsbook offerings into more jurisdictions such as Vermont and North Carolina.
The noteworthiness of this is emphasized by DraftKings being live with mobile sports betting in 25 states, after the launch in the Tar Heel State, which collectively represents approximately 49% of the US population.
Backing this further, monthly unique payers (MUPs) increased 23% to 3.4 million average monthly unique paying customers and average revenue per MUP was $114, representing a rise of 25%.
Adjusted EBITDA was set at $22.4m during the quarter, a vast improvement on the negative adjusted EBITDA of $221.6m seen in the same period last year.
Revised 2024 Guidance
As a result of the significant growth experienced in the first quarter of 2024, DraftKings isadjusting guidance for the fiscal year 2024.
The revenue guidance range has been shifted from $4.65bn-$4.90bn to $4.8bn-$5.0bn, while the operator expects adjusted EBITDA to be between $460m and $540m rather than the initial guidance, which was between $410m and $510m.
This guidance excludes the estimated impact of DraftKings proposed acquisition of Jackpocket, a deal which is expected to cost approximately $750m.
However, overall, DraftKings still declared an operating loss of $138.8m for the quarter.
Comments
DraftKings CEO and Co-Founder Jason Robins said: “DraftKings’ performance in the first quarter of 2024 was outstanding, reflecting healthy revenue growth and a scaled fixed cost structure that positions us to drive rapidly improving adjusted EBITDA.
“We successfully launched our online sportsbook in Vermont and North Carolina with highly efficient customer acquisition. Looking ahead, we remain committed to maximizing shareholder value through continued innovation, operational excellence and disciplined capital allocation.”
DraftKings CFO Alan Ellingson added: “We are raising the midpoint of our fiscal year 2024 revenue guidance to $4.9bn from $4.775bn and the midpoint of our adjusted EBITDA guidance to $500m from $460m; as a result of our excellent first quarter results and improved outlook on customer acquisition and engagement for the rest of 2024.
“We expect adjusted EBITDA Flow-through Percentage to exceed 50% for fiscal year 2024 as we expand our gross margin and exert discipline on our cost structure, while simultaneously investing in promotions and marketing in accordance with our LTV to CAC targets.”
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