Last updated: February 17, 2025
DraftKings’ Q4 revenue grew 13% despite bettor-friendly NFL results, aided by strong customer acquisition and its Jackpocket acquisition. The company expects continued expansion and revenue growth in 2025.
DraftKings (NASDAQ: DKNG) saw a surge in Thursday’s after-hours trading, following the sportsbook operator’s 2025 revenue guidance upgrade and reaffirmation of an earnings before interest, taxes, depreciation, and amortization (EBITDA) estimate of $900 million to $1 billion.
The EBITDA outlook is in line with what the operator disclosed last November; however, the forecasted 2025 topline revenue of $6.3 billion to $6.6 billion is a bit above the previously guided range of $6.2 billion to $6.6 billion. The Boston-based DraftKings said the estimates don’t “include the benefit of year-to-date sport outcomes” and don’t reflect the expected addition of Missouri to the sports betting market later this year.
Looking ahead to 2025 and beyond, I’m thrilled to continue maximizing our customer economics with new initiatives, including extending our leadership in live betting and expanding cross-selling efforts to and from new verticals,” said CEO and co-founder Jason Robins. “Our number one priority remains driving sustainable growth in both revenue and profitability.”
DraftKings now offers mobile sports wagering services in 25 states, plus Washington, DC, thereby covering nearly half of the United States’ adult population. Missouri and Puerto Rico are expected to be added to that roster in the near term. The company’s internet casino business is in five states, covering 11% of Americans of legal wagering age.
The 2024 NFL season, which ended Sunday with the Super Bowl, was challenging for sportsbook operators, including DraftKings, with several companies posting customer-friendly results negatively impacting third-quarter results—a trend that extended through the October-December quarter.
In spite of that headwind, DraftKings reported fourth-quarter revenue increased 13% to $1.39 billion from $1.23 billion last year. The operator reported the bite of bettor-friendly NFL results in the last three months of 2024 was mitigated by robust customer acquisition and engagement, and the acquisition of online lottery business Jackpocket.
“We continued to acquire and engage customers well, drive structural sportsbook hold percentage and optimize promotional reinvestment in fiscal year 2024, while we simultaneously were exposed to customer-favorable sport outcomes,” Robins added in the release.
Jackpocket, which DraftKings acquired in May, is the reason DraftKings’ fourth-quarter average revenue per monthly unique paying (ARPMUP) customer declined 16% to $97 in December, below analysts’ estimate of $197.84. The reason is straightforward: lottery customers spend less than DraftKings’ iGaming and sports betting customers.
Last year was the first year DraftKings reported positive adjusted EBITDA on an annual basis, and CFO Alan Ellingson said the operator sees “strong underlying health across our core value drivers.”
He said the operator resumed buying back shares under a $1 billion buyback plan announced last August, but the press release did not provide details on how much common equity DraftKings bought back during the last three months of 2024.
The company had $788.28 million of cash and cash equivalents at year-end, down from $1.27 billion last year, and $16.49 million of restricted cash, up from $11.70 million.
