DraftKings delivers positive EBITDA while revenue rockets 88% in Q2
Boston-headquartered operators improves full-year 2023 guidance as senior management praises improvements in tech and customer retention
DraftKings has confirmed an 88% year-on-year (YoY) increase in revenue for Q2 2023 to $875m, significantly surpassing its Q2 2022 figure of $466m.
Releasing its financial report for the period, the operator revealed a 64% YoY reduction in its net losses to $77.3m, while the company’s adjusted EBITDA achieved a positive figure, rising to $72.9m from a prior Q2 2022 negative of $118m.
Proforma costs, inclusive of sales and marketing, product and technology and general administrative costs amounted to $433m, down 6% from that reported during Q2 2022.
DraftKings cost of revenue rocketed 63% YoY to $510m from $312m. Operational losses dropped 77% YoY to a negative figure of just $69m in the same period.
The operator attributed the increased revenue to healthy customer retention and engagement, as well as the acquisition of new customers, product innovation leading to increased parlay mix and improved promotional intensity.
Monthly unique players (MUPs) increased to 2.1 million during Q2, a YoY increase of 44% compared to 2022. Average revenue per MUP (ARPMUP) amounted to $137 during Q2, representing a 33% increase compared to the same period in 2022.
“This increase reflects strong unique payer retention and acquisition across DraftKings Sportsbook and igaming products as well as the expansion of its sportsbook and igaming products into new jurisdictions,” DraftKings said.
Following the disclosure of the results, fiscal year 2023 revenue guidance has been raised to a range of between $3.4bn and $3.5bn, equating to YoY growth of between 54% and 58%. The firm has also revised its 2023 adjusted EBITDA guidance to a range of between negative $190m and $220m.
Previous revenue guidance was between $3.1bn to $3.2bn, while the former adjusted EBITDA prediction was set between a loss of $290m and $340m.
In addition, the operator has confirmed a Q4 revenue estimate of $1.2bn and a projected adjusted EBITDA of between $150m and $175m.
DraftKings CEO and co-founder Jason Robins acclaimed the second quarter 2023 results as an “outstanding” set of financials for the business.
“We grew revenue at an impressive year-over-year rate, captured additional GGR [gross gaming revenue] share in a cost-effective manner and maintained our focus on operational efficiency,” Robins said.
“The positive adjusted EBITDA that we generated in the second quarter exceeded our guidance, and we are well on our way to achieving positive adjusted EBITDA again in the fourth quarter of 2023 and for fiscal year 2024 and beyond.
“We are excited by the additional product features and functionality that we are introducing leading into football season and also look forward to another successful online sportsbook launch in Kentucky this fall pending licensure and regulatory approvals,” he remarked.