DraftKings Q4 results; adjusted EBITDA positive, Jackpocket acquired for $750m

February 16, 2024
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DraftKings is still operating at a loss. However, the online sportsbook has reported positive adjusted EBITDA, with quarterly revenue up 44% year-on-year.

DraftKings has released its results for the fourth quarter, reporting revenue of $1.23bn, up 44% year-on-year. Adjusted EBITDA came to $151m, a positive result compared to the adjusted EBITDA loss of $49.9m reported in Q4 2022. 

Despite this, the operator still reported an overall loss from operations, at $43.8m. However, this is a notably smaller loss compared to this time last year, when the quarter's loss was $232.2m.  

On the results, DraftKings CFO Jason Park said: “In 2023 we delivered on our commitments to generate outstanding revenue growth and drive significant operating efficiencies,” with CEO Jason Robins adding, “Looking ahead to 2024 and beyond, our focus remains on disciplined execution against our core value drivers... and fulfilling our product roadmap to consistently differentiate ourselves competitively.” 

Player results 

Alongside reporting positive EBITDA and a reduced operating loss, DraftKings reported 3.5 million average monthly unique payers (MUPs), up 37% from this time last year. The growth in players can in part be explained by developing legalization of sports betting in the US, plus the use of new customer deals for effective acquisition (though some of these have shown to backfire, as seen with the class action lawsuit being filed against the company in Massachusetts). 

Estimated revenue per MUP was up 6% year-on-year, reporting an average of $116.  

2024 guidance 

With quarterly results closer to reporting an income than before, DraftKings has raised its fiscal year 2024 revenue guidance to $4.65 bn - $4.9bn, up from previous estimations. This would reflect growth of 27% - 34% year-on-year, with the annual revenue for 2023 totaling $3.67bn. 

Adjusted EBITDA guidance has similarly been updated, estimated for $410m - $510m for fiscal year 2024. 

US footprint 

Launching in Maine in November and Vermont in January, DraftKings’ mobile sports betting platform is now available in 24 states, with access available to 46% of the US population. Its iGaming product is available to 11% of the population, live in five states. It is also available in Ontario – the oonly Canadian province to offer online gaming.  

DraftKings is also set to launch in North Carolina in March, in collaboration with NASCAR.  

DraftKings acquires Jackpocket 

Just before announcing its Q4 results, DraftKings confirmed its acquisition of the lottery app Jackpocket. Costing roughly $750m, with the acquisition set to add an additional $60m - $100m to DraftKings adjusted EBITDA in 2026. Robins has said he is “excited to enter the rapidly growing U.S. digital lottery vertical” with the acquisition and that “this transaction will create significant value for DraftKings not only by giving our customers another differentiated product to enjoy but also by improving our overall marketing efficiency.”    

Breaking down the transaction, DraftKings paid approximately $412.5m in cash, with the remaining $337.5m paid in DraftKings Class A common stocks. The transaction is set to close by the second half of the year following regulatory approvals and customary closing conditions. 

“Together with DraftKings, we will be able to bring tremendous value to our customer base as we advance our mission to create a more convenient, fun, and responsible way to take part in the lottery,” added Peter Sullivan, CEO of Jackpocket. 

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