DraftKings Cuts Net Loss, Raises 2024 Guidance As Q1 Revenue Soars 53%

DraftKings announced first quarter revenue jumped 53% over the same period last year to $1.175 billion as it continued to add customers and expand its sportsbook to new states, and the company raised its guidance for the rest of the year.

“DraftKings is off to an outstanding start in 2024 and we’re excited to be raising our outlook for the year,” said CEO and co-founder Jason Robins in a Friday earnings call.

The company had 3.4 million unique monthly paying customers in the first quarter, a 23% jump over the same period in 2023. Average revenue per unique monthly payer similarly rose 25% to $114. DraftKings declared a net loss of about $143 million for the quarter, down from $397 million the same time last year, and raised its earnings guidance for the year based on the quarter’s numbers.

“We are raising the midpoint of our fiscal year 2024 revenue guidance to $4.9 billion from $4.775 billion and the midpoint of our Adjusted EBITDA guidance to $500 million from $460 million as a result of our excellent first quarter results and improved outlook on customer acquisition and engagement for the rest of 2024,” said DraftKings CFO Alan Ellingson in a statement.

Four new states in 2023, two more in ’24

DraftKings expanded its sportsbook to Vermont and North Carolina this year and to Ohio, Massachusetts, Kentucky, and Maine last year. It now offers mobile sports betting in 25 states with about 49% of the U.S. population and iGaming in 5 states with 11% of the population and continues to see growth in states where it’s done business for years, Robins said.

“In fact, if you take sort of a theme store view of our 2018-2022 states, we grew net revenue about 40 percent year-over-year in Q1,” he said.

DraftKings also offers sportsbook and iCasino in Ontario and plans to launch the sportsbook product in Puerto Rico.

The company also continues to launch new iGaming features and add sportsbook features like cash out for same-game parlays. Its large market share in the industry gives it a cash and data advantage as it continues to update its technology, Robins said.

“I think first and foremost having a lot of scale and a very wide customer base is an advantage because we have more data and more data points to model and to improve personalization and make other decisions off of,” he said.

Lot to look forward to

One of the company’s next steps is to enter the iLottery space, after announcing in February its pending acquisition of Jackpocket for $750 million. DraftKings has had success introducing sportsbook customers to iGaming where it’s available, and Robins said he anticipates lottery players will be a good market to expand sportsbook and iGaming play.

“I think that’ll be a really efficient funnel as well — acquiring on lottery and cross-selling into [online sportsbook] and iGaming,” he said.

Robins also sees the possibility of expanding to new states as regulations change, with more legislatures potentially legalizing online casino, especially if they seek new sources of revenue with COVID-19 relief funds drying up. Jackpocket likely can also expand into new states without any new laws, he said.

“I think there’s a ton of state expansion opportunity there and the vast majority of it doesn’t have to be legislative — it’s done without legislative action,” he said. “I think you will see some additional states get up and running for Jackpocket before the end of the year.