DraftKings Q2 revenue jumps 26% to $1.1bn as monthly actives reach 3.1 million
New York-listed operator reveals plans for gaming tax surcharge and $1bn share repurchase as Jackpocket acquisition begins to pay dividends
DraftKings has reported $1.1bn in Q2 revenue as the Boston-based operator revealed a $1bn share repurchase programme and a new gaming surcharge tax in four states.
Revenue increased 26% year-over-year (YOY) for the three months ending June 30 from $874.9m in Q2 2023.
Bosses said the revenue increase was driven by a combination of factors, including “healthy customer engagement,” efficient acquisition, new sports betting launches, higher sportsbook hold, and the acquisition of Jackpocket.
In that vein, monthly unique players increased 50% YOY to 3.1 million average monthly paying customers.
DraftKings noted that excluding online lottery courier Jackpocket, which it bought for $750m, monthly unique players rose 34% during the reporting period.
The company also added that customer acquisition costs had fallen by more than 40% YOY.
However, average revenue per monthly unique player declined 15% to $117 as the lower spend among Jackpocket players was baked into the wider DraftKings business.
Adjusted EBITDA leapt from $73m in Q2 2023 to $128m during the latest reporting period while losses from operations shrank from $69m to $32.4m.
Having launched in Washington DC at the end of July, DraftKings is now live with mobile sports betting in 25 states, plus the capital, accounting for 49% of the US population.
DraftKings’ igaming reach in five states also puts it in front of 11% of the US population.
The operator also claimed its combined online sports betting and igaming market share now sits at 29.8%.
Away from the operational performance, DraftKings revealed its plans for a $1bn stock repurchase authorisation of the company’s Class A common stock.
The operator may make repurchases of the stock through “open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws.”
In addition, DraftKings is planning to implement a gaming surcharge tax on customers in high tax states beginning from 1 January 2025.
The tax will be applied in Illinois, New York, Pennsylvania and Vermont to ensure an operational effective tax of roughly 20% for the company.
The surcharge will apply to winning bets and will be treated as a separate transaction when paying out customer winnings.
DraftKings’ share price slipped to $32.66 post-market close, but has rebounded since.
Speaking on the firm’s performance during Q2, DraftKings CEO and co-founder Jason Robins said: “We very efficiently acquired many more new customers than we expected and saw continued healthy existing customer engagement in the second quarter.
“We will continue to capitalise on the healthy customer acquisition environment for the rest of 2024, which positions us to achieve $900 million to $1bn of adjusted EBITDA in 2025.
“Additionally, we plan to implement a gaming tax surcharge in high tax states that have multiple mobile sports betting operators on 1 January 2025, which could drive adjusted EBITDA upside on an annual basis.”
Finally, DraftKings has also raised its 2024 revenue guidance to a midpoint of $5.15bn, compared to a previous midpoint of $4.9bn.
Adjusted EBITDA guidance has also been increased, rising from between $340m and $420m to $460m and $540m.
For 2025, DraftKings has reaffirmed its adjusted EBITDA guidance of between $900m and $1bn, which it said currently excludes any impact from the planned gaming tax surcharge.