DraftKings Boosts Revenue Guidance Midpoint, Reaffirms Adjusted EBITDA

In January, leading US online sports betting and gaming operator DraftKings announced fourth-quarter losses caused by unpredicted sports results. 

Fast-forward to Thursday, the NASDAQ-listed company experienced a sudden rise in its stock in after-hours trading amid an upward revision of its 2025 revenue forecast while announcing its fourth quarter and fiscal year 2024 financial results.

DraftKings Reaffirms $900M-$1B EBITDA Projections

The company’s fourth-quarter 2024 revenue growth of 13% or $162 million to $1,393 million from $1,231 million during the same quarter in 2023 was fueled by several factors. 

The list includes strong customer engagement, efficient new customer acquisition, the expansion of its Sportsbook product into new jurisdictions, a higher structural sportsbook hold percentage, and the acquisition of Jackpocket Inc. in May 2024. 

“2024 was a milestone year for DraftKings as we achieved our first year of positive adjusted EBITDA,” explained chief financial officer Alan Ellingson. 

Ellingson went on to say that they also started executing on their inaugural share repurchase authorization. 

The company reaffirmed its previous earnings before interest, taxes, depreciation, and amortization (EBITDA) projection, which remains between $900 million and $1 billion.

Raising FY2025 Revenue Guidance Midpoint 

Although the EBITDA target has remained unaltered since November 2024, the revenue forecast has suffered some minor adjustments. 

“With strong underlying health across our core value drivers, we are raising the midpoint of our fiscal year 2025 revenue guidance to $6.45 billion from $6.4 billion,” the CFO added. 

The Boston-based company, whose mobile app hit 21 million downloads between 2020 and 2024, also anticipates revenue between $6.3 billion and $6.6 billion, compared to its prior range of $6.2 billion to $6.6 billion, officially announced last November.

The operator clarified that these figures did not account for year-to-date sports betting outcomes or the potential launch of Missouri’s sports wagering market in the upcoming month. 

CFO Ellingson also emphasized the company’s strong financial health, adding that DraftKings initiated share repurchases under its $1 billion buyback program announced in August 2024. 

However, the company did not disclose the number of shares repurchased in the fourth quarter.

DraftKings ended 2024 with $788.28 million in cash and cash equivalents, a decline from the previous $1.27 billion. 

Meanwhile, restricted cash went up to $16.49 million from $11.70 million, with the company maintaining its steady position in terms of growth while strengthening its foothold in betting and gambling markets. 

CEO Robins, Optimistic About Current Trajectory 

Chief executive officer and co-founder Jason Robins expressed enthusiasm about the company’s trajectory.

“Looking ahead to 2025 and beyond, I am excited to further enhance our customer economics through new initiatives,” said Robins, referring to their plans to extend their live betting lead and advance cross sell efforts “to and from new verticals.”

The CEO further explained their main focus will continue to be driving “sustainable growth in revenue and profitability.”

DraftKings currently operates mobile sports betting in 25 states and Washington, DC, covering nearly half of the U.S. adult population. 

The company also has an online casino presence in five states, representing 11% of the eligible American market. 

In Canada, the operator lives with its Sportsbook and iGaming products in Ontario, representing roughly 40% of the country’s population.

Missouri and Puerto Rico are expected to be added to DraftKings’ list of jurisdictions in the future after “pending market access, licensure, regulatory approvals, and contractual approvals,” as explained by the company.