DraftKings Achieves 44% Revenue Growth in Q4 2023; Raises 2024 Revenue and Adjusted EBITDA Guidance
High-ranking DraftKings (NASDAQ: DKNG) executives, including CEO Jason Robins, are continuing their sales of the gaming company’s stock, dumping more than $78 million worth of shares since the start of 2024.
According to five Form 144 filings with the Securities and Exchange Commission (SEC), Robins, fellow cofounder Paul Liberman, and General Counsel Stanton Dodge have sold $78.76 million worth of DraftKings equity since Jan. 22. Two Form 144’s filed on Feb. 8 — eight days before the operator is slated to deliver fourth-quarter results — indicate Robins and Dodge liquidated a combined $9.61 million in DraftKings stock.
After more than tripling last year, DraftKings stock is up 23.06% year-to-date, residing around 52-week highs, and climbed 4.30%, potentially signaling the sales by Robins and Dodge didn’t hinder performance.
Conversely, critics could credibly assert that a spate of insider selling days before an earnings report is a concerning sign, should be forbidden by regulators, or both.
Liberman, Robins, and fellow cofounder Matthew Kalish each have a $1 annual salary. But they are heavily compensated in equity and are frequent sellers of shares of the company they founded.
The same is true of Dodge and CFO Jason Park, though neither Kalish nor Park were among the sellers mentioned in the recent batch of Form 144’s. A substantial amount of the sales by DraftKings insiders are via automated trading plans, and it’s common for many emerging growth companies — of which the sportsbook operator is one — to use equity as a form of compensation.
Likewise, insider selling at any company isn’t necessarily negative. It can simply be the result of executives wanting to access cash or diversify their personal portfolios. Form 144’s don’t include reasons for the selling.
On the other hand, and specific to DraftKings, the company will turn four years old in April as a standalone publicly traded entity, and rare are the occasions over that period that high-level insiders have been buyers of the stock.
It would have been nice to be on the holiday gift lists of Dodge, Kalish, Liberman, and Robins, because prior to the aforementioned January and February sales of their firm’s stock, the quartet sold a fair amount of shares in December.
Seven Form 144’s filed in the final month of 2023 indicate the quartet sold approximately $54.6 million of DraftKings stock in December. More than $52 million of that sum was attributable to Kalish, Liberman, and Robins.
It’s not clear if those sales were part of the problem, but after settling at $39 on Dec. 1, the stock closed at $35.25 on the final trading day of 2023. Still, in the span of less about 70 days, Dodge, Kalish, Liberman, and Robins have dumped $133.36 million worth of DraftKings stock.
https://www.casino.org/news/draftkings-insiders-selling-large-amounts-of-stock/
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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.
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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, 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.
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%.
https://www.yogonet.com/international/news/2024/02/16/70857-draftkings-achieves-44-revenue-growth-in-q4-2023-raises-2024-revenue-and-adjusted-ebitda-guidance