Boston-headquartered operator shares rise as management revises 2023 targets on the back of $288m revenue leap
DraftKings has revealed a 57% year-on-year (YoY) increase in revenue for Q3 2023 to $790m, rocketing by $288m compared to the same period for 2022.
Releasing its financial data for the period, the Boston-headquartered operator confirmed a 37% YoY decrease in its Q3 net losses to $283.1m, while the firm’s adjusted EBITDA losses shrank from a $264.2m in Q3 2022 to $153.4m for the same period this year.
DraftKings cost of revenue rocketed 46% YoY during Q3 2023 to $543.4m from a prior year high of $372.7m. Operational losses dropped 37% YoY to a negative figure of just $286.6m in the same period.
The operator attributed its rise in revenue to “continued healthy customer engagement”, efficient customer acquisition, expansion into new jurisdictions, product innovation, and improved promotional reinvestment across sportsbook and igaming.
DraftKings expanded into Kentucky during the quarter and is set to follow that with launches in Maine, which goes live with sports betting today, and North Carolina, which will go live with sports betting in 2024.
Monthly unique players (MUPs) increased to 2.3 million during Q3, a YoY increase of 40% compared to 2022.
Average revenue per MUP (ARPMUP) amounted to $114 during Q3, representing a 14% increase compared to the same period in 2022, driven by increases in sportsbook hold and improved promotional reinvestment.
“Our fantastic third quarter results demonstrate the positive impact of our product and technology investments as well as excellent preparation and execution by our entire organization,” DraftKings CEO and co-founder Jason Robins said.
“Our new and differentiated features and functionality have created an exceptional user experience that sustains engagement for our mobile sports betting and igaming customers,” he added.
Expanding on the financials, DraftKings CFO Jason Park added: “DraftKings continues to acquire customers in an efficient manner, sustain customer engagement, improve its sportsbook structural hold and promotional reinvestment for sportsbook and igaming, and demonstrate fixed cost discipline,”.
Park confirmed that due to DraftKings strong Q3, the firm would raise its fiscal 2023 guidance figure from $3.5bn to $3.69bn, as well as confirming an estimate for improved adjusted EBITDA losses from $205m to $105m.
“We are poised for a rapid increase in adjusted EBITDA as we anticipate strong revenue growth coupled with a scaled fixed cost structure will continue. These trends provide for a long runway of margin improvement,” Park explained.
“Our fiscal year 2024 guidance at the midpoints of $4.65bn in revenue and positive $400m of adjusted EBITDA implies incremental year-over-year revenue growth of almost $1bn and an increase in adjusted EBITDA of more than $500m,” he added.
DraftKings shares reacted positively to the revision of the firm’s financial targets jumping 4% in trading on the Nasdaq to a close of $28.98 per share (November 2).
Last month, gaming analysts Eilers & Krejcik Gaming reported DraftKings had overtaken its long-standing rival FanDuel as US market leader by gross gambling revenue market share.