Latest DraftKings Earnings Report Q4 2024

DraftKings' Q4 2024 earnings report reveals a 13% revenue increase to $1.39 billion, a 36% rise in monthly unique players to 4.8 million, and an optimistic 2025 revenue forecast of $6.3-$6.6 billion.

Author

Milan Reichl
February 15th, 2025 • Reading Time: 5 minutes

DraftKings Inc.

Company Overview

DraftKings Inc. (NASDAQ: DKNG) is a leading digital sports entertainment and gaming company, offering a range of products including daily fantasy sports, sports betting, and online casino gaming. Founded in 2012 by Jason Robins, Matt Kalish, and Paul Liberman, the company is headquartered in Boston, Massachusetts. DraftKings became a publicly traded entity in April 2020 through a business combination with Diamond Eagle Acquisition Company and SBTech. As the only U.S.-based vertically integrated sports betting operator, DraftKings powers sports and gaming entertainment for over 50 operators across more than 15 regulated U.S. and global markets. The company's mission is to responsibly create the world's favorite games and betting experiences by leveraging its innovative technology and customer-centric approach.

Latest DraftKings Earnings Comparison Q4 2024

Metric

Expected

Actual

Variance

EPS

$-0.15

$0.14

193.33%

Revenue

$1.43B

$1.39B

2.59%

Historical DraftKings Earnings Data

Period

EPS (Exp/Act)

Revenue (Exp/Act)

Variance (EPS/Revenue)

Q3 2024

$-0.42 / $-0.17

$1.11B / $1.1B

59.52% / 1.35%

Q2 2024

$0.01 / $0.22

$1.11B / $1.1B

2,100% / 0.54%

Q1 2024

$-0.28 / $0.03

$1.12B / $1.18B

110.71% / 4.91%

Q4 2023

$0.08 / $0.29

$1.24B / $1.23B

262.50% / 0.73%

DraftKings Earnings Call Summary Q4 2024

Highlights

  • Strong Revenue Growth: Q4 revenue reached $1.39B, up 13% YoY, with full-year revenue hitting $4.8B (+30% YoY).

  • Profitability Milestone: Achieved $181M in adjusted EBITDA, a $332M YoY improvement, and positive free cash flow for the first time in company history.

  • Customer Growth: Acquired 3.5M new customers at record-low acquisition costs, increasing the total customer base to 10.1M (+42% YoY).

  • Sportsbook Hold Expansion: Structural Sportsbook hold rose 80bps YoY to 11.2%, driven by an improved NFL parlay mix (+600bps YoY).

  • Jackpocket Lottery Success: Jackpocket, the #1 digital lottery courier app, benefited from the $1.2B Mega Millions jackpot, showing strong customer acquisition.

  • Super Bowl Record: Set a daily record of $436M in Sportsbook handle, with same-game parlay handle up 40% YoY.

  • Raised 2025 Revenue Guidance: Now expecting $6.3B-$6.6B (+32%-38% YoY), up from the previous $6.2B-$6.6B forecast.

Risks

Despite positive momentum, DraftKings faces several challenges:

  1. Market Maturity & Growth Slowdown: As early adoption levels off, continued handle growth and customer retention are key to sustaining revenue expansion.

  2. Regulatory & Tax Risks: Increasing state gaming taxes, as seen in Illinois, could impact profitability.

  3. Live Betting Expansion Costs: Investments in Simplebet and live betting infrastructure will be EBITDA neutral in 2025, with profitability expected in 2026.

  4. Competition & Promotional Pressure: While promotional intensity is expected to decline in 2025, aggressive customer acquisition strategies from competitors may impact margins.

  5. International Expansion Uncertainty: While global expansion is a long-term opportunity, DraftKings remains focused on U.S. and Canadian markets for now.

Opportunities

DraftKings is positioned for long-term growth across multiple areas:

  1. Live Betting Acceleration: With the acquisition of Simplebet & Sports IQ Analytics, DraftKings is enhancing real-time wagering experiences, a key growth area.

  2. Jackpocket & Lottery Growth: Digital lottery courier services are still in early growth stages, providing an additional revenue stream.

  3. Higher Structural Sportsbook Hold: Improved same-game parlay adoption & bet mix could further increase hold percentages beyond initial forecasts.

  4. iGaming Expansion: While currently limited to a few states, legalization momentum in new markets could drive additional revenue.

  5. Capital Allocation Flexibility: With $850M in expected 2025 free cash flow, DraftKings has room for debt restructuring, share repurchases, and strategic investments.

Outlook

  • Sustained Revenue Growth: DraftKings expects 32%-38% YoY revenue growth in 2025, supported by live betting, parlay mix, and customer acquisition.

  • Margin & Profitability Expansion: Adjusted gross margin forecast raised to 46%-47%, with $900M-$1B in expected adjusted EBITDA.

  • Potential Market Expansion: Missouri launch could provide additional upside, though it is not currently included in guidance.

  • Regulatory & Taxation Monitoring: Continued engagement with lawmakers to ensure favorable tax environments and new market legalization.

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The information is provided for educational purposes only and does not constitute financial advice or recommendation and should not be considered as such. Do your own research.