Key points:
- DraftKings generated $4.8bn in revenue for FY2024, marking a 30.1% year-on-year increase
- Net loss for FY2024 decreased by 36.8% to $507.3m, while Q4 net loss surged 202.2% to $139.2m
- DraftKings’ adjusted EBITDA turned positive, reaching $181.3m in FY2024, compared to a $151m loss in 2023
DraftKings reported $4.8bn in total revenue for FY2024, representing a 30.1% year-on-year increase. The company also reduced its net loss by approximately $295m, bringing it down to $507.3m from $802.3m in 2023.
A key milestone for the DraftKings was its first positive adjusted EBITDA, which reached $181.3m for the year compared to a $151m adjusted EBITDA loss in 2023. Despite this progress, loss from operations remained high at $609m, though this figure improved by over $180m from 2023.
The company’s cost of revenue increased by over $650m, largely due to higher spending on sales and marketing, product and technology and general administrative expenses. However, the strong revenue increase allowed DraftKings to offset these rising costs and improve its bottom line.
Fourth-quarter net loss rises 202.2% despite 13.2% revenue growth
DraftKings’ fourth-quarter results presented a contrast to its full-year improvements, as the company reported $1.4bn in Q4 revenue, up 13.2%. However, net loss for the quarter jumped 202.2% to $139.2m, largely due to increased operational expenses and declining interest income.
Cost of revenue for the quarter rose by approximately $118m, while sales and marketing expenses increased by over $77m. Additionally, adjusted EBITDA for Q4 dropped by 40.8% to $89.5m, despite the full-year EBITDA turning positive.
Comparison to Q3 and market trends
DraftKings' fourth-quarter losses stood in contrast to its third-quarter performance, where Q3 revenue had grown 39% to $1.1bn, marking the company’s third consecutive quarter surpassing the $1bn revenue mark. However, despite this revenue growth, Q3 net loss increased by $12m to $298.6m.
The third-quarter results also highlighted DraftKings’ rising expenses, with cost of revenue growing by nearly $200m, general and administrative costs surging 59.2% to $208.1m and product and technology costs increasing 16.4% to $103.6m.
While these expenses impacted profitability, monthly unique players (MUPs) were up 55%, driven in part by the acquisition of Jackpocket, a digital lottery app.
Expansion and 2025 growth projections
DraftKings reaffirmed its FY2025 revenue guidance of $6.3bn to $6.6bn, representing an approximate 35% increase from 2024. The company also expects adjusted EBITDA for 2025 to range between $900m and $1bn, in line with previous forecasts.
As part of its market expansion strategy, DraftKings plans to enter the Missouri market following the state’s recent sports betting legalisation. Additionally, the company is preparing to launch its sportsbook product in Puerto Rico, pending regulatory approval.
The operator also secured a new retail sportsbook partnership with Live! Casino & Hotel Louisiana on 7 February 2025, with the venue opening on 13 February as part of a $270m Cordish Companies development.
Stock performance and shareholder reactions
DraftKings’ financial performance in 2024 has influenced investor sentiment, with the company raising its FY2025 revenue guidance following its strong full-year results.
Earlier in the year, DraftKings had adjusted its FY2024 revenue outlook downward, citing customer-friendly NFL outcomes as a factor in revised expectations.
Following this adjustment in November, the company’s stock price dropped to $36.90, down 5.3% from $38.98, reflecting investor concerns over tighter margins.
However, given its 30.1% annual revenue increase and first positive EBITDA, DraftKings is now positioning itself as a long-term sustainable player in the online gaming industry.
Good to know: The current stock price for DraftKings at the time of writing is $46.45.
Looking ahead
DraftKings enters 2025 with a stronger financial outlook, having achieved its first-ever positive adjusted EBITDA while significantly reducing its net loss. However, the company still faces growing costs in revenue, marketing and operational expenses, which could impact profitability.
With new market entries in Missouri and Puerto Rico, as well as its expanded retail presence, DraftKings is set to continue its growth trajectory in 2025. Managing operational costs while sustaining revenue growth will be critical in ensuring the company maintains its path toward long-term profitability.
