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DraftKings Q3 2023: Revenue rises 57%, but net loss still remains

DraftKings had 2.3 million monthly players during Q3 2023.

draftkings q3 image

DraftKings has released its financial results for Q3 2023 - for the three months ended September 30, 2023 - sporting a revenue of $790m, up 57% from the same period in 2022.

However, despite revenue increasing by a large amount, DraftKings still remains in a net loss. The company reported a net loss of $283.1m, but this is an improvement on Q3 2022 when the company reported a net loss of $450.5m.

The statement clarified that the company’s revenue was: “Driven primarily by continued healthy customer engagement, efficient acquisition of new customers, the expansion of the Company’s Sportsbook product offering into new jurisdictions, product innovation leading to increased parlay mix and thus higher hold percentage and improved promotional reinvestment for Sportsbook and iGaming.”

DraftKings reported an adjusted EBITDA in Q3 2023 of negative $153.4m, a large drop from the last quarter, which was a positive figure of $72.9m. On the other hand, it achieved an improvement on Q3 2022's negative figure of $264.2m.

Furthermore, total GAAP operating expenses increased year-on-year from $957m to $1.08bn.

During this period, DraftKings reported it had 2.3 million monthly players representing a 40% increase year-on-year. Additionally, the average revenue per monthly unique player increased 14% to $114 within the same period.

DraftKings also expanded into Kentucky and is planning on additional launches in Maine and North Carolina, pending regulatory approvals.  

Following the launch of its Sportsbook product in Kentucky on 28 September of this year, DraftKings is now live with mobile sports betting in 22 states; this collectively represents approximately 45% of the US population. 

As of Q3 2023, DraftKings is also live with iGaming in five states, representing approximately 11% of the US population.

The company also has a sports betting and iGaming presence in Ontario, Canada. DraftKings is live with its Sportsbook and iGaming products in Ontario, which represents approximately 40% of Canada’s population.

For fiscal year 2024, DraftKings expects to achieve a revenue of $4.5bn to $4.8bn, while fiscal year 2024 adjusted EBITDA guidance of $350m to $450m is also expected.

Jason Park, DraftKings’ CFO, commented: “DraftKings continues to acquire customers in an efficient manner, sustain customer engagement, improve its sportsbook structural hold and promotional reinvestment for sportsbook and iGaming, and demonstrate fixed cost discipline.

“As a result of our outstanding performance in the third quarter, we are raising the midpoint of our fiscal year 2023 revenue guidance to $3.695bn from $3.5bn and improving the midpoint of our fiscal year 2023 adjusted EBITDA guidance to ($105m) from ($205m). We are poised for a rapid increase in adjusted EBITDA as we anticipate strong revenue growth coupled with a scaled fixed cost structure will continue. 

“These trends provide for a long runway of margin improvement. Our fiscal year 2024 guidance at the midpoints of $4.65bn in revenue and positive $400m of adjusted EBITDA implies incremental year-over-year revenue growth of almost $1bn and an increase in adjusted EBITDA of more than $500m.”

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