DraftKings shares spike following 13% rise in Q4 revenue
New York-listed operator’s losses widen, yet management increases full-year 2025 revenue guidance to between $6.3bn and $6.6bn
DraftKings has posted a 13% year-on-year (YoY) increase in Q4 2024 revenue to $1.4bn (£1.2bn), with management partly attributing the bump to “healthy” customer engagement, efficient customer acquisition and expansion of the sportsbook product offering.
Higher structural sportsbook hold, and the $750m acquisition of lottery courier Jackpocket, completed in May 2024, were also highlighted as reasons, though the gains were “partially offset” by customer-friendly outcomes in the NFL, the firm said in its Q4 earnings release.
Net losses grew to a negative $134.9m, or 28 cents per share, compared with $44.6m in Q4 2023. Meanwhile, there was a steep fall in adjusted EBITDA, down from $151m YoY to $89.5m, the company revealed.
In terms of average monthly unique payers (MUPs), this metric climbed 36% to 4.8 million, with bosses highlighting “strong unique player retention” across sportsbook and casino. Excluding the impact of the Jackpocket acquisition, MUPs climbed 16% YoY.
In contrast, average revenue per monthly unique payer (ARPMUP) decreased 16% to $97 for the final three months of 2024.
That slump was not helped by what co-founder and CEO Jason Robins claimed in a letter to DraftKings shareholders were “the most customer-friendly NFL sport outcomes in 40 years”. Excluding the influence of Jackpocket, ARPMUPs were up 4%.
DraftKings’ sports betting offering is currently live in 25 states and Washington DC, making up 49% of the US population. Its igaming operations, which includes Golden Nugget, are available in five states, representing around 11% of the country.
The company’s Q4 report confirmed that it expects to launch its sportsbook in Missouri soon, pending market access and regulatory approvals, after voters passed a ballot initiative by a razor-thin margin last November to legalise sports betting.
DraftKings also published its full-year 2024 results, which noted a 30% YoY climb in revenue to almost $4.8bn, while there was a sharp increase in adjusted EBITDA to $181m.
In turn, DraftKings has raised the midpoint of its 2025 revenue guidance to between $6.3bn and $6.6bn.
The operator has also reaffirmed its adjusted EBITDA guidance for the same period, which is expected to be $900m to $1bn. The guidance issued does not take into account a potential sportsbook launch in Missouri.
As per Robins’ letter to shareholders, DraftKings also acquired 3.5 million new customers at “record low acquisition costs”, increasing its player base by 42% YoY to 10.1 million, while sportsbook and igaming handle climbed 21%.
Robins issued an optimistic outlook on the year ahead as he explained: “We continued to efficiently acquire and engage customers, expand structural sportsbook hold percentage and optimise promotional reinvestment in fiscal year 2024, while we simultaneously experienced customer-friendly sport outcomes.
“Looking ahead to 2025 and beyond, I am excited to further enhance our customer economics through new initiatives such as extending our lead in live betting and advancing cross-sell efforts to and from new verticals.
“Our focus remains on driving sustainable growth in revenue and profitability.”
It was a sentiment shared by CFO Alan Ellingson, who noted the company sees “strong underlying health across our core value drivers”.
Following the release of the results, DraftKings’ share price spiked 7% in after-hours trading before losing some of those gains.