DraftKings Thursday reported revenue of $1.104 billion in 2Q24, an increase of $230 million, or 26%, compared to $875 million year over year.
The company also announced plans to repurchase an aggregate of up to $1.0 billion of its Class A common stock. DraftKings stated they had acquired more customers than expected in the quarter, allowing the stock repurchase.
“We will continue to capitalize on the healthy customer acquisition environment for the rest of 2024, which positions us to achieve $900 million to $1.0 billion of adjusted EBITDA in 2025,” CEO and Co-Founder Jason Robins said in a statement. “Additionally, we plan to implement a gaming-tax surcharge in high tax states that have multiple mobile sports betting operators on January 1, 2025, which could drive adjusted EBITDA upside on an annual basis.”
The increase in the DraftKings’s second quarter 2024 revenue was due to healthy customer engagement, efficient acquisition of new customers, the expansion of the company’s sportsbook product into new jurisdictions, higher structural sportsbook hold percentage, and the impact of the acquisition of Jackpocket that closed on May 22, 2024.
“In light of that DraftKings’s free cash flow trajectory,” said DraftKings Chief Financial Officer Alan Ellingson, “we are pleased to announce a $1.0 billion inaugural share-repurchase authorization, which reflects our confidence in the company’s attractive long-term outlook and healthy balance sheet.”
Monthly unique payers (MUP) increased to 3.1 million in the second quarter of 2024, representing an increase of 50% compared to the second quarter of 2023. Excluding the impact of the acquisition of Jackpocket, MUPs would have increased by approximately 34% compared to the second quarter of 2023.
The average revenue per MUP was $117 in the second quarter of 2024, representing a 15% decrease compared to the same period in 2023.
DraftKings raised its fiscal-year-2024 revenue guidance to a range of $5.05 billion-$5.25 billion from the range of $4.80 billion-$5.00 billion. The company’s updated 2024 revenue guidance range equates to year-over-year growth of 38% to 43%.
DraftKings is revising its fiscal-year-2024 adjusted EBITDA guidance to $340 million-$420 million compared to its prior fiscal year 2024 and adjusted EBITDA guidance of between $460 million-$540 million. The company also continues to expect fiscal year 2025 adjusted EBITDA to be in the range of $900 million-$1.0 billion.
The company’s guidance for fiscal years 2024 and 2025 includes all of its existing jurisdictions and mobile sports betting in Washington, D.C.
DraftKings closed at $35.49 on the Nasdaq, down $1.46, or 3.9%.
Rege Behe is lead contributor to CDC Gaming. He can be reached at rbehe@cdcgaming.com. Please follow @RegeBehe_exPTR on Twitter.
