DraftKings has reported its financial earnings for the first quarter of 2024. In total, the sportsbook generated revenue of $1.18bn, up 53% year-on-year, with an operating loss of $138.8m – a reduction of over $200m, compared to the operating loss of $389.8m reported this time last year.
Significantly, adjusted EBITDA was also positive this quarter, totalling $22.4m. While down from the $151m reported in Q4, it continues the sportsbook's trend of positive adjusted EBITDA, having reported negative adjusted EBITDA of $221.6m in Q1 2023.
Expenditure
Cost of revenue was up 36.1% year-on-year, totalling $710.1m. Sales and marketing costs were down slightly, declining by $48.4m to $340.7m. Product and technology expenses also remained mostly stagnant, up 0.8% year-on-year to $88.8m. General and admin expenditure also grew slightly, up by $13.8m, or 8.6%, to $174.3m.
Monthly users
Monthly unique payers (MUPs) were reported at 3.4 million in Q1 2024, up 23% year-on-year. Average spend was $114, up 25%.
The growth in users correlates with the sportsbook's increased availability in the US this quarter, having launched in North Carolina in early March. At present, DraftKings is available in 25 states and Ontario, Canada, making it accessible to 49% of Americans and 40% of Canadians.
DraftKings' iGaming platform is available in five states, accounting for around 11% of Americans.
Stocks and shares
According to the report, loss per share totalled $0.30, compared to a loss of $0.87 last year. In terms of share price, stocks came to $43.02 at the end of trade on 2 May, up 2.9%.
Quarterly activity
During the quarter, which accounts for the three months ended 31 March 2024, DraftKings acquired the digital lottery app Jackpocket for an estimated $750m. It also partnered with LA Lakers legend LeBron James, and a partnership with former Penn Entertainment subsidiary Barstool – a move some may consider risky given the platform's history.
The sportsbook filed a legal accusation against former senior executive Michael Hermalyn, which was concluded and ruled in DraftKings' favour earlier this week.
Comments
On the results, CEO and Co-Founder Jason Robins said: “DraftKings’ performance in the first quarter of 2024 was outstanding, reflecting healthy revenue growth and a scaled fixed cost structure that positions us to drive rapidly improving Adjusted EBITDA.”
CFO Alan Ellingson reported that the sportsbook was raising its 2024 revenue guidance to $4.9bn from the previous $4.78bn and that “we expect adjusted EBITDA flow-through percentage to exceed 50% for fiscal year 2024.”
