US sports betting giant DraftKings has clocked revenue of $1.23 billion for the fourth quarter of 2023, an increase of $376 million or 44% compared to $855 million during the same period in 2022, leading it to raise its full-year guidance for 2024. In the full year 2023, DraftKings saw a revenue rise of 63% to $3.7 billion.
In the fourth quarter, the company’s loss from operations was reduced to $43.8 million, compared to $232.2 million in Q4 2022. Adjusted EBITDA increased from a negative $49.9 million to a positive $151.0 million.
The company attributed the growth to continued healthy customer engagement, efficient acquisition of new customers, expanding the Sportsbook product offering into new jurisdictions, and product innovation leading to an increased parlay mix and thus higher structural sportsbook hold percentage.
Jason Robins, DraftKings’ Chief Executive Officer and Co-founder, said: “DraftKings ended 2023 with excellent performance across customer acquisition, retention, and engagement as well as structural sportsbook hold percentage despite the worst stretch of sport outcomes we have seen as a public company in the fourth quarter.
“Looking ahead to 2024 and beyond, our focus remains on disciplined execution against our core value drivers, an unwavering commitment to customer centricity, and fulfilling our product roadmap to consistently differentiate ourselves competitively,” he added.
Jason Robins
During the quarter, the number of monthly unique payers (MUP) increased to 3.5 million, representing an increase of 37% compared to Q4 of 2022. Average revenue per MUP was $116, up 6% compared to the same period in 2022.
Customer-friendly sports outcomes negatively impacted DraftKings’ revenue and adjusted EBITDA by approximately $175 million and approximately $126 million, respectively. Meanwhile, Q4’s cost of revenue grew by 47% to $716.7 million. However, expenditure on sales and marketing fell by 16% to $290.8 million.
Driven by the encouraging results, the company has now raised its fiscal year 2024 revenue guidance to a range of $4.65 billion to $4.90 billion from the range of $4.50 billion to $4.80 billion, which it previously announced on November 2, 2023. Its updated 2024 revenue guidance range equates to year-over-year growth of 27% to 34%. Furthermore, Adjusted EBITDA guidance for 2024 has been revised between $410 million and $510 million.
Jason Park
Jason Park, DraftKings’ Chief Financial Officer, commented: “In 2023 we delivered on our commitments to generate outstanding revenue growth and drive significant operating efficiencies.”
“Based on continued strong underlying fundamentals through the first six weeks of 2024 on top of excellent customer acquisition in the fourth quarter, we are raising the midpoint of our fiscal year 2024 revenue guidance range to $4.775 billion from $4.65 billion and the midpoint of our fiscal year 2024 Adjusted EBITDA guidance range to $460 million from $400 million,” the CFO noted. The company also expects 2024 to mark its first full year of positive Adjusted EBITDA.
Along with its Q4 results, DraftKings announced it is set to acquire lottery app Jackpocket for $750 million in a deal expected to generate up to $340 million in additional revenue annually.
Full-year overview
In the year to 31 December 2023, DraftKings saw revenue rise 63% to $3.7 billion. Loss from operations was $789.2 million, compared to $1.5 billion in 2022, while negative adjusted EBITDA was $151.0 million. This was significantly less than last year’s $721.8 million.
During the year, DraftKings saw its cost of revenue grow by 57% to $2.3 billion. However, sales and marketing were flat, and general and administrative expenditures decreased by 20%.
