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DraftKings Increases FY Guidance After Q1 Growth

DraftKings, the popular sports betting operator, has raised its full-year revenue and adjusted EBITDA guidance following growth in the first quarter of its 2023 financial year.

The company cited efficient acquisition of new customers, innovation in product offerings, decreased promotional intensity in more mature states, and healthy customer retention as factors driving the growth in revenue.

DraftKings also saw a boost from the launch of its online sports betting product in Massachusetts and Ohio, bringing the total number of states in which it is available to 21.

Additionally, DraftKings operates iGaming in five states and has a presence with both offerings in Ontario, Canada.

DraftKings increased its full-year guidance after a successful final quarter in 2022. The operator is now well-positioned to achieve profitability on an adjusted EBITDA basis in the near-term and deliver long-term value for shareholders, said DraftKings’ co-founder and chief executive Jason Robins.

In Q1, revenue amounted to $769.7 million, an increase of 84.5% from the previous year. Monthly unique payers (MUPs) increased by 39.0% to 2.8 million.

The operator saw an improvement in structural sportsbook hold rates and reduced promotional intensity, which led to an increase in average revenue per monthly unique player (ARPMUP) to $92 in Q1 of 2023, a 35% increase from the same period in 2022.

However, expenses were higher in almost all areas, with cost of revenue at $521.7 million, up 66.5% year-on-year. Sales and marketing costs and product technology expenses also increased, though general and administrative spend was reduced.

DraftKings' operating loss was $389.8 million, a significant improvement from the $515.6 million loss posted in the previous year. Adjusted EBITDA loss was $221.6 million, down from $289.5 million in Q1 2022. The company paid $1.4 million in tax and accounted for a $119,000 loss from equity method investment, leading to a net loss in Q1 of $397.1 million, an improvement on $467.7 million last year.

With the strong execution across the organization, DraftKings raised its full-year revenue expectations from $2.85 billion to $3.05 billion to a range of $3.14 billion to $3.24 billion, and adjusted EBITDA expectations from between a loss of $350.0 million and $450.0 million to a loss range of $290.0 million to $340.0 million.



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