Key points:
- Revenue up 20% to $1.41bn, driven by customer retention and Jackpocket acquisition
- Monthly Unique Payers (MUPs) rose 28%, though ARPMUP fell 5% due to Jackpocket mix
- Adjusted EBITDA guidance revised down to $800m–$900m from previous $900m–$1bn
DraftKings has reported first-quarter 2025 revenue of $1.41bn, a 20% year-on-year increase from the $1.18bn posted in Q1 2024. The company cited robust engagement across its sportsbook and iGaming products, improved hold rates and the continued integration of Jackpocket, which it acquired in May 2024.
Monthly Unique Payers (MUPs) rose 28% to 4.3m in the quarter. Excluding Jackpocket, the increase would have been 11%. However, Average Revenue per MUP (ARPMUP) declined 5% to $108, due to the lower monetisation rate from Jackpocket’s customer base. Without Jackpocket, ARPMUP would have increased by 7%.
Customer growth after soft sport outcomes
Despite strong underlying fundamentals, DraftKings pointed to "customer-friendly" sport outcomes in March that negatively affected margins. The sportsbook’s structural hold remained elevated, but event-level results led to a lower contribution to earnings than expected.
CEO Jason Robins commented: “If not for customer-friendly sport outcomes in March, we would be raising our 2025 guidance. Nonetheless, our underlying customer metrics and product performance remain strong.”
As a result, DraftKings revised its 2025 revenue guidance from a prior range of $6.3bn–$6.6bn to a slightly lower band of $6.2bn–$6.4bn. The midpoint still reflects a 32% growth rate compared to FY2024’s $4.8bn. The adjusted EBITDA outlook was also narrowed from $900m–$1bn to $800m–$900m.
Repurchases and market expansion
CFO Alan Ellingson confirmed the company repurchased 3.7m shares during Q1 under its existing buyback plan, reinforcing its commitment to shareholder returns.
DraftKings is now live with mobile sports betting in 25 US states and Washington, DC, covering approximately 49% of the population. It also operates iGaming in five states, covering 11% of the US population. In Canada, DraftKings remains active in Ontario, which represents 40% of the country's total population.
Following the successful sports betting ballot initiative in Missouri on 5 November 2024, DraftKings is preparing to launch operations in the state, pending approvals. Missouri is expected to further strengthen DraftKings’ national footprint and accelerate top-line growth in the second half of the year.
Jackpocket impact and iGaming outlook
The integration of Jackpocket contributed meaningfully to customer acquisition numbers, though with a lower ARPMUP. DraftKings stated that excluding Jackpocket, core metrics demonstrated solid growth.
The company is also expected to launch in Puerto Rico later this year and continues expanding its physical sportsbook partnerships, including a recent venue opening with Live! Casino & Hotel Louisiana in February.
Past performance and strategic developments
DraftKings closed 2024 with a 30.1% revenue increase to $4.8bn and achieved its first positive adjusted EBITDA of $181.3m. While the full-year net loss narrowed by 36.8% to $507.3m, Q4 2024 saw losses rise to $139.2m due to a spike in operational expenses and marketing costs.
The company’s acquisition of Jackpocket, completed in May 2024, was a key strategic move intended to broaden its product offering and reach new demographics in digital lottery gaming. The digital lottery integration has since influenced customer and monetisation dynamics in Q1.
With sustained customer growth and further state launches anticipated, DraftKings remains positioned for another year of top-line expansion – though margin management and ARPMUP improvements will be central to meeting revised profit targets.
