DraftKings’ financial performance for Q2 2024

Lea Hogg August 2, 2024

DraftKings Inc. (Nasdaq: DKNG) has reported a significant 26 percent year-on-year increase in its Q2 2024 revenue, reaching $1.104 billion. This growth is attributed to increased customer engagement, the expansion of its sportsbook product into new jurisdictions, and the acquisition of Jackpocket, completed in May 2024.

The company declared a net income of $63.8 million, marking its first quarterly profitability. However, it also reported an operating loss of $32.4 million, reflecting ongoing investments in growth and market expansion. Despite this, the loss is significantly smaller than the $69 million loss reported in Q2 2023, indicating a decrease of 53 percent year-on-year.

DraftKings’ shares experienced a roughly 4 percent drop as the market reacted to the report, with the share price sitting at $35.49 at the time of writing. Despite this, the company announced a $1.0 billion share repurchase program authorised by its Board of Directors, allowing the repurchase of its Class A common stock through open market purchases and other transactions, depending on market conditions.

The company’s Monthly Unique Payers (MUPs) increased to 3.1 million, a 50 percent rise from the previous year, driven by strong player acquisition and retention across DraftKings’ platforms. However, the Average Revenue per MUP (ARPMUP) fell by 15 percent to $117, mainly due to promotional investments in new customers and outcomes that favoured bettors during the period.

DraftKings updated its fiscal year 2024 revenue guidance to a range of $5.05 billion to $5.25 billion, reflecting an anticipated year-on-year growth of 38 percent to 43 percent. However, it revised its adjusted EBITDA guidance to between $340 million and $420 million, down from the previous forecast of $460 million to $540 million. The company cited ongoing investments and changing market dynamics as reasons for this adjustment.

Expanding market presence

The company remains active in expanding its market presence, with its Sportsbook product now available in 25 states and Washington, DC, collectively covering 49 percent of the US population. DraftKings also operates iGaming services in five states, representing 11 percent of the US population, and is live in Ontario, Canada.

Future plans include launching its Sportsbook product in Puerto Rico, subject to regulatory approvals. The company is also monitoring legislative developments in several US jurisdictions that could legalise mobile sports betting and iGaming, potentially increasing its market reach.

In Q1 2024, DraftKings reported a revenue increase of 53 percent year-on-year, despite an operating loss of $138.8 million. The company also announced the acquisition of Jackpocket for $750 million and entered into a partnership with former Penn Entertainment subsidiary Barstool. These strategic moves indicate DraftKings’ commitment to growth and expansion in the digital sports entertainment and gaming industry.