DraftKings has released its financial results for the third quarter, concluding on Sept. 30. The sportsbook reported a remarkable 57% increase in revenue compared to the corresponding period in the previous year, amounting to $790 million.
While DraftKings has achieved a notable increase in revenue, the company continues to grapple with profitability, sustaining a net loss amounting to $283.1 million. However, this figure represents a significant improvement compared to the same period in 2022 when the company faced a much larger net loss of $450.5 million, marking a substantial reduction of 62.8%.
“Our fantastic third quarter results demonstrate the positive impact of our product and technology investments as well as excellent preparation and execution by our entire organization,” said Jason Robins, DraftKings’ CEO.
“Our new and differentiated features and functionality have created an exceptional user experience that sustains engagement for our mobile sports betting and iGaming customers.
As per the official statement provided by the company, the notable surge in revenue can be attributed to several key factors, with robust customer engagement standing out as a pivotal driver of growth.
“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,” the statement read.
In Q3 2023, DraftKings reported an adjusted EBITDA of negative $153.4 million, representing a substantial improvement when compared to Q3 2022, which showed negative $264.2 million. Nevertheless, this quarter saw a notable decline from the previous quarter when the sportsbook achieved a positive $72.9 million in adjusted EBITDA.
DraftKings anticipates revenue in the range of $4.5 billion to $4.8 billion for the fiscal year 2024, and the company projects an adjusted EBITDA of $350 million to $450 million in FY24.
DraftKings’ Chief Financial Officer, Jason Park, commented on the company’s growth and projections:
“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,” he said.
“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.”