DraftKingsbelieves that it is “positioned to sustain success” after the first quarter 2023, in which the company produced revenue growth.
The operator has increased its midpoint revenue and adjusted EBITDA forecasts for 2023.
DraftKings , in its first quarter financial report, declaredrevenues of $770m. This is an increase of 84 percent year-over-year (417m Q1 2022). The company attributes this to “efficient acquisitions of new customers, increased hold percentages, reduced promotional intensity in mature states, and continued healthy retention of customers”.
The operator’s monthly unique players increased by 39 percent YoY, due to “strong unique retention and acquisition of DraftKings sportsbook and igaming product” and the expansion of all products in new jurisdictions.
The average revenue per MUP increased by 35 percent YoY, to $92, following “improvements in the Company’s sportsbook structural hold rate and decreased promotional intensity”.
DraftKings’ ultimate goal is to be profitable. The company continues making losses from its operations. In 2022, the company recorded a $390m loss (2022: $516m).
DraftKings’ adjusted EBITDA finished the quarter at a loss of $222m (2022: loss of $290m).
Jason Robins , co-founder and CEO of the company, is confident that it will continue to operate efficiently and be in a position for sustainable growth.
“DraftKings first quarter performance, which saw revenue and share gains of 84% year-over-year underpinned by a relentless emphasis on operational efficiency, demonstrates this is a business that’s positioned for sustainable success,” said Robins.
“We launched highly successful online sportsbooks in Ohio and Massachusetts, and we continued to differentiate our products through in-house innovation. We were able to acquire customers more quickly and efficiently, and importantly, we saw a healthy retention rate across cohorts.
“I am confident that DraftKings will be able to deliver long-term shareholder value and profitability in 2023 on an adjusted EBITDA-basis.”
DraftKings has launched its mobile sports betting service in 21 US States following its March launch in Massachusetts. Its igaming platform is also available in five US states. The firm’s sportsbook as well as its igaming service are also available in Ontario, Canada.
In the future, the company plans to expand its mobile betting product in Kentucky and Puerto Rico pending licensing and regulatory approvals.
DraftKings increased its midpoint revenue and adjusted EBITDA forecast for 2023 following a strong quarter.
The company has raised its revenue guidance for 2023 to $3.135bn to $2.85bn, up from the previous range of $2.85bn – $3.05bn. This corresponds to a growth rate of 40 to 44 percent YoY.
The adjusted EBITDA guidance was improved from a loss of $350m to $450m to a loss between $290m and $340m.
Our results reflect the strong execution of our strategy across the organization, said CFO Jason Park.
“Revenues grew at an accelerated rate, largely due to the core drivers of customer acquisition, retention, and monetisation. This includes a lower promotional intensity, and a higher structural hold. Our efficiency efforts also produced tangible results, as evidenced by the significant increases in gross profit margins and adjusted EBITDA year-over-year.
The midpoint for our fiscal 2023 guidance on revenue has been increased to $3.185bn, up from $2.95bn. We have also improved the midpoint for our fiscal 2023 guidance on adjusted EBITDA to ($315)m, down from ($400m).