US sports betting giant DraftKings has released its Q1 results for 2023. The operator has reached revenue of $770m, up 84% year-on-year, exceeding expectations according to its report.
Jason Robins, DraftKings CEO and Co-Founder, attributed first-quarter performance and revenue growth to, “a relentless focus on operational efficiency.” This, however, is an interesting quote given the brand's heavy loss for the quarter (covered below).
He added, “This is a company positioned for sustained success. We delivered highly successful online sportsbook launches in Ohio and our home state of Massachusetts and continued to create meaningful product differentiation driven by in-house innovations.”
The FY revenue guidance midpoint has been raised by 8% to $3.19bn as a result. DraftKings’ report also states an expectation to have positive adjusted EBITDA in FY2024.
Adjusted EBITDA for this quarter was -$222m, up $68m year-on-year. The adjusted EBITDA guidance for Q2, though, predicts it to be “approximately break-even.”
Average revenue per monthly payer was $92 in Q1, a 35% increase that the report cites was due to “improvement in the company’s structural sportsbook hold rate and reduced promotional intensity.” A 39% increase in monthly unique players also increased to 2.8 million average monthly unique paying customers in Q1.
DraftKings’ operating loss decreased 24% this quarter to a loss of $389.8m. Although this represented a marked improvement, this is still a huge loss for a company that is constantly being reminded of its drive for profitability.
But investors may well be encouraged if revenue continues to rise and net loss continues to fall.
Robins commented, “We acquired customers faster and more efficiently and saw healthy retention across cohorts. Looking at the remainder of 2023, I am confident DraftKings is well-positioned to achieve profitability on an adjusted EBITDA basis in the near-term and deliver long-term value for our shareholders.”
DraftKings expects to launch its sportsbook in the recently authorized Kentucky and Puerto Rico mobile sports betting markets next, pending regulatory approvals.