December 5, 2023

DraftKings Posts Strong Q3 2023 Financial Results, Revenue Up 57% YoY

DraftKings, the popular online sports betting and iGaming company, has released its Q3 2023 financial results, showing a significant increase in revenue. The company reported a revenue of $790 million, representing a 57% year-on-year growth.

DraftKings CEO Jason Robbins highlighted the factors contributing to this positive outcome during an investors call. He mentioned strong customer engagement, successful acquisition of new customers, and the expansion of sports betting into new jurisdictions as key drivers behind the impressive results.

Some key highlights from the Q3 2023 report include a revenue of $789.9 million, a 57% increase compared to the same period last year. The loss from operations decreased by 37% to -$286.5 million, and adjusted EBITDA decreased by 41.9% to -$153.4 million, both in comparison to Q3 2022. Furthermore, year-to-date revenue reached $2.4 billion, marking a substantial 76% increase. The net loss for the year-to-date period decreased by 33.2% to -$757.5 million. The number of Monthly Unique Payers (“MUPs”) also saw growth, reaching 2.3 million, a 40% increase. Additionally, the average revenue per customer rose by 14% to $114.

A particularly positive highlight of the report was the better-than-predicted EBITDA losses. The projected losses for the fiscal year 2023 now stand at $95 million to $105 million, significantly lower than the initial prediction of $400 million at the beginning of the year and the revised estimate of $190 million to $220 million reported in August. Jason Park, DraftKings’ CFO, expressed satisfaction with the company’s achievements, emphasizing their efficient customer acquisition, sustained customer engagement, improved sportsbook structural hold, and disciplined fixed cost approach.

Following the launch of Kentucky sports betting, DraftKings sportsbook is now available in 22 states, while its iGaming product is offered in 5 states. The company’s continued expansion into new markets is expected to drive further growth and positive financial outcomes.

In light of the outstanding performance in Q3, DraftKings has revised its fiscal year 2023 revenue guidance to $3.695 billion, up from $3.5 billion. The Adjusted EBITDA guidance has also improved to ($105) million, compared to the previous estimate of ($205) million. Looking ahead to fiscal year 2024, DraftKings expects a revenue of $4.65 billion and a positive Adjusted EBITDA of $400 million, indicating substantial revenue growth and increased profitability.

Based on these promising results, DraftKings is well-positioned for future success and anticipates further margin improvement as revenue continues to grow, supported by efficient cost structures.

Source: Jenny Tang, experienced iGaming commentator and analyst based in New York City.