DraftKings has raised its revenue guidance for the full-year after the group reflected on a third quarter that saw revenue increase and losses improve year-on-year.
Following the “very strong” three month period, Jason Robins, DraftKings’ co-founder, Chief Executive Officer and Chair, has reiterated confidence in achieving positive AEBITDA by Q4 2023 “based on the visibility we have into expected state launches”.
For the quarter ending September 30, 2022, revenue for the quarter surpassed internal expectations in rising 136 per cent to $502m (2021: $213m) year-on-year.
The B2C segment demonstrated a similar performance in closing Q3 at $493m, up 161 per cent, which DraftKings aligned to an array of primary factors.
This includes robust customer acquisition and retention, successful sportsbook and igaming launches in additional jurisdictions, high hold rates from NFL wagering and reduced promotional intensity.
The quarter also saw net and AEBITDA losses narrow to $450.49m (2021: $545m) and $264.21m (2021: $313.6m), respectively. For the year-to-date, these stand at $1.13bn (2021: $1.19bn) and $671.85m (2021: $548.16m).
Furthermore, the quarter also saw monthly unique payers increase 22 per cent to 1.6 millions, while average revenue per MUP closed at $100m, up 114 per cent.
“Our team continued to drive top-line growth through highly effective customer engagement and compelling product and technology enhancements while remaining focused on our path to profitability,” Robins continued.
“For the NFL season, we made investments in our mobile sportsbook product, creating a differentiated and fun customer experience, and also realised unique marketing optimisation benefits as an operator with truly national scale.
“Throughout 2022, we’ve struck the right balance between delivering differentiated top-line growth and driving operating efficiencies.”
Alongside this performance, DraftKings has also raised its revenue guidance for the current year to a range of $2.16bn-$2.19bn, an increase from previous expectations of $2.08bn-$2.18bn. This would represent a 67 per cent to 69 per cent YoY uptick.
A similar update has also been issued regarding AEBITDA, which is now expected to close the year at a loss of between $780m and $800m, which is down from the previously anticipated $765m and $835m.
“Our results in the third quarter significantly exceeded the expectations that we provided on our second quarter earnings conference call,” explained Jason Park, DraftKings’ Chief Financial Officer.
“We are increasing the midpoint of our fiscal year 2022 revenue guidance by $45m and improving the midpoint of our fiscal year 2022 adjusted EBITDA guidance by $10m, which is a meaningful improvement given our prior fiscal year 2022 adjusted EBITDA guidance did not include our launch in Kansas on September 1, 2022, or fourth quarter investments ahead of our expected launches in Maryland and Ohio, pending licensure and regulatory approvals.
“We are also introducing 2023 guidance for revenue and adjusted EBITDA which reflects our continued balance between driving attractive revenue growth and meaningfully improving our adjusted EBITDA.”
DraftKings has also introduced 2021 revenue guidance of $2.8bn-$3bn, a 33 per cent increase, as well as expected AEBITDA loss of between $475m and $575m.