Draftkings posts positive EBITDA, misses guidance

DraftKings Achieves $4.77 Billion in Revenue for 2024, Yet Falls Short of EBITDA Expectations

DraftKings, a leading player in the U.S. gambling market, has reported a commendable revenue of $4.77 billion for its full-year results in 2024, marking a robust 30% increase from the previous year. However, despite this significant revenue growth, the company did not meet its expected EBITDA guidance for the year.

The company recorded a positive EBITDA of $181.3 million, a noteworthy turnaround from a loss of $151 million in the prior year. This represents a significant milestone as it marks DraftKings’ first year of positive EBITDA since going public in April 2020. However, this figure is considerably lower than the adjusted EBITDA guidance set at $240 million to $280 million, as announced during the Q3 earnings report.

The reduction in guidance was primarily attributed to an unfortunate streak of outcomes during the NFL games in October, leading to an initial projection of between $460 million and $540 million being scaled back.

DraftKings’ Chief Financial Officer, Alan Ellingson, emphasized 2024 as a pivotal year for the company, celebrating its first year of positive adjusted earnings and underscoring its path toward profitability.

DraftKings’ Performance in Q4

In the fourth quarter, DraftKings reported a revenue of $1.39 billion, reflecting a 13% increase from $1.23 billion in the same period last year. This revenue growth was largely driven by sustained customer engagement, efficient new customer acquisition strategies, the expansion of its sportsbook product offerings into new jurisdictions, a higher structural sportsbook hold percentage, and the successful acquisition of Jackpocket.

Despite these gains, the revenue for Q4 faced pressures from customer-friendly outcomes throughout the NFL season. The number of monthly unique players surged to 4.8 million in Q4, an impressive 36% increase year-on-year, fueled by both acquisition and retention efforts across its sports betting and iGaming platforms.

However, the average revenue per player declined to $97, a 16% decrease compared to the previous year. This drop was largely due to lower revenue generation from Jackpocket customers in comparison to existing offerings and further impacted by favorable sportsbook outcomes for customers.

Notably, DraftKings recorded its highest customer acquisition day in history during the Tyson-Paul boxing match on November 15. They also set a daily record for sportsbook handle, reaching $436 million on Super Bowl Sunday.

For Q4, the adjusted EBITDA was reported at $89.5 million, down 40% from the $151 million reported the previous year, primarily due to the adverse NFL results.

CEO Jason Robins Highlights Hold Percentage Growth

Jason Robins, CEO and co-founder of DraftKings, noted that the company has effectively continued to attract and engage customers while boosting structural sportsbook hold percentages and optimizing promotional reinvestments during fiscal year 2024.

“There are numerous potential avenues for even greater acceleration of our growth. Our structural sportsbook hold percentage is on the rise, and the long-term ceiling for this metric may exceed our expectations,” Robins remarked. He further asserted that the inevitability of online gaming legalization in the U.S. positions DraftKings at the “epicenter” of a burgeoning industry trend.

Increased EBITDA Forecast for H1 2025

Looking ahead, Ellingson has reaffirmed the EBITDA guidance for 2025, predicting results will range between $900 million and $1.0 billion. Notably, he has slightly increased the H1 2025 revenue guidance to $6.45 billion, up from the previous $6.4 billion.

In a letter to investors in February, Ellingson indicated that the increase in EBITDA expectations primarily stems from anticipated returns on investments in live betting, following the acquisition of in-play betting innovator Simplebet.

DraftKings completed the acquisition of Simplebet last year, marking its second significant acquisition of 2024, following its earlier purchase of digital lottery company Jackpocket in May.

It’s important to note that DraftKings has not included the year-to-date outcomes from major sports events, such as the recent Super Bowl, in its 2025 guidance. Furthermore, the potential regulatory developments surrounding Missouri’s planned implementation of sports betting in June 2025 have been excluded from this forecast, which may affect early earnings as the state gears up for its market launch.