DraftKings Records Impressive Financial Report for Q4 2023

Sports betting heavyweight DraftKings announced its financial report for the fourth quarter, which ended on Dec. 31, 2023.

The company generated revenue of $1.231 billion for the fourth quarter, which signified an increase of 44% from the same period in 2022, which garnered $855 million.

“In 2023, we delivered on our commitments to generate outstanding revenue growth and drive significant operating efficiencies,” said Jason Park, DraftKings’ Chief Financial Officer.

According to the company’s press release, this growth was driven mostly by its commitment to customer engagement and retention, and it plans to emulate the same pattern in 2024. Additional elements contributing to this growth comprised the group’s expansion of its sportsbook product offerings into previously untapped markets as well as its commitment to continuous product innovation.

“DraftKings ended 2023 with excellent performance across customer acquisition, retention, and engagement, as well as structural sportsbook hold percentage, despite the worst stretch of sport outcomes we have seen as a public company in the fourth quarter,” said Jason Robins, DraftKings’ Chief Executive Officer and co-founder.

Looking ahead to 2024 and beyond, our focus remains on disciplined execution against our core value drivers, an unwavering commitment to customer centricity, and fulfilling our product roadmap to consistently differentiate ourselves competitively.”

The loss from operations in the fourth quarter of 2023 amounted to $43.8 million, a significant improvement compared to the $232.2 million loss reported in the same period of 2022. Moreover, the adjusted EBITDA showed a remarkable turnaround, increasing from a negative $49.9 million in Q4 2022 to a positive $151 million in Q4 2023. Despite facing challenges such as unfavorable sporting results, the company managed to achieve an encouraging end to the year.

DraftKings Raises Revenue Projections for 2024

Following the release of its latest earnings report, which showcased strong financial performance, including a significant increase in revenue during the fourth quarter of 2023, DraftKings has revised its projections for the year 2024 upward.

“Based on continued strong underlying fundamentals through the first six weeks of 2024 on top of excellent customer acquisition in the fourth quarter, we are raising the midpoint of our fiscal year 2024 revenue guidance range to $4.775 billion from $4.65 billion and the midpoint of our fiscal year 2024 Adjusted EBITDA guidance range to $460 million from $400 million. We expect 2024 to mark our first full year of positive Adjusted EBITDA, demonstrating clear progress toward the goals we presented at our November 2023 Investor Day,” Park added.

Previously, the company had projected revenue to fall within the range of $4.5 billion to $4.8 billion. However, following a reassessment, DraftKings is now anticipating revenue to be in the range of $4.65 billion to $4.9 billion. Additionally, DraftKings is raising its fiscal year 2024 Adjusted EBITDA guidance. The company now expects Adjusted EBITDA to be between $410 million and $510 million, up from its previous guidance of $350 million to $450 million.

It’s worth noting that these revised projections incorporate all of DraftKings’ existing jurisdictions as well as anticipated revenue from mobile sports betting operations in Puerto Rico and North Carolina.

As part of its Q4 results announcement on Thursday, DraftKings revealed plans to acquire the lottery app Jackpocket for $750 million. This move is anticipated to bring in an additional $340 million in revenue annually. However, it’s important to note that DraftKings’ revenue and Adjusted EBITDA guidance for fiscal year 2024 do not yet include the expected impact of the Jackpocket acquisition. Once the acquisition is finalized, DraftKings will update its guidance to reflect the integration of Jackpocket into its operations.

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