Key Highlights:
- Revenue growth: DraftKings Inc. (Nasdaq: DKNG) announced a 26% increase in revenue for Q2 2024, reaching $1.1bn.
- Profitability: The operator finally achieved quarterly profitability, declaring net income of $63.8m.
- Operating loss: Despite profitability, DraftKings reported a loss from operations of $32.4m.
- Share price drop: DraftKings' shares fell roughly 4% as the market reacted to the report, sitting at $35.49 at the time of writing.
DraftKings has reported a 26% increase in revenue for the second quarter of 2024, reaching $1.104bn, up 26% year-on-year and net income reaching $63.8m.
The operator attributes this growth to increased customer engagement, the expansion of its sportsbook product into new jurisdictions and the acquisition of Jackpocket, which was completed in May 2024.
Adjusted EBITDA almost doubled from this time last year, increasing from $73m in Q2 2023 to $128m in Q2 2024.
Despite these gains, the company recorded a loss from operations of $32.4m for the quarter, reflecting ongoing investments in growth and market expansion. However, this loss is significantly smaller than the $69m loss reported this time last year, decreasing by 53% year-on-year.
Monthly Unique Payers (MUPs) increased to 3.1m, a 50% rise from the previous year, driven by strong player acquisition and retention across DraftKings’ platforms. Average Revenue per MUP (ARPMUP) fell by 15% to $117, mainly due to promotional investments in new customers and outcomes that favoured bettors during the period.
DraftKings also announced a $1.0bn share repurchase program authorised by its Board of Directors. This initiative allows the company to repurchase its Class A common stock through open market purchases and other transactions, depending on market conditions.
DraftKings updated its fiscal year 2024 revenue guidance to a range of $5.05bn to $5.25bn, reflecting an anticipated year-on-year growth of 38% to 43%. However, it revised its adjusted EBITDA guidance to between $340m and $420m, down from the previous forecast of $460m to $540m. The company cited ongoing investments and changing market dynamics as reasons for this adjustment.
The company remains active in expanding its market presence, with its Sportsbook product now available in 25 states and Washington, DC, collectively covering 49% of the US population.
Additionally, DraftKings operates iGaming services in five states, representing 11% of the US population and is live in Ontario, Canada.
DraftKings' future plans include launching its Sportsbook product in Puerto Rico, subject to regulatory approvals. The company is also monitoring legislative developments in several US jurisdictions that could legalise mobile sports betting and iGaming, potentially increasing its market reach.
In the first quarter of 2024, DraftKings reported a revenue increase of 53% year-on-year, despite an operating loss of $138.8m. The company also announced the acquisition of Jackpocket for $750m and entered into a partnership with former Penn Entertainment subsidiary Barstool.
