DraftKings Reports Q2 2023 Financial Results and Updates Guidance
DraftKings Inc. (Nasdaq: DKNG) has disclosed its financial results for the second quarter of 2023, showing a significant increase in revenue compared to the same period last year. The company reported $875 million in revenue for the three months ending June 30, 2023, an 88% growth compared to the previous year. The surge can be attributed to factors such as customer retention and engagement, efficient customer acquisition, product innovation, and improved promotional strategies.
During the second quarter of 2023, DraftKings experienced healthy growth in its Monthly Unique Payers (MUPs), reaching an average of 2.1 million unique paying customers, marking a 44% increase compared to the same period in 2022. The rise in MUPs is a result of strong payer retention, effective acquisition efforts, and expansion into new jurisdictions with both Sportsbook and iGaming offerings. Additionally, the company saw an increase in Average Revenue per MUP (ARPMUP), which reached $137 during the second quarter of 2023, showing a 33% growth compared to the previous year.
Based on its performance and growth prospects, DraftKings has raised its revenue guidance for the fiscal year 2023. The new guidance now stands at a range of $3.46 billion to $3.54 billion, representing a year-over-year growth of 54% to 58%. Moreover, the company has also improved its fiscal year 2023 Adjusted EBITDA guidance, now expecting it to be between ($190) million and ($220) million, compared to the previous range of ($290) million to ($340) million.
DraftKings’ mobile sports betting and iGaming operations continue to expand, with operations currently live in 21 states for mobile sports betting (accounting for 44% of the U.S. population) and 5 states for iGaming (representing 11% of the U.S. population). The company has also launched its Sportsbook and iGaming products in Ontario, Canada, covering approximately 40% of the country’s population.
Looking ahead, DraftKings plans to enter additional markets, including Kentucky, North Carolina, Vermont, and Puerto Rico, pending licensure and regulatory approvals. In 2023, 12 states have introduced legislation to legalize mobile sports betting, while 5 states have introduced bills related to legalizing iGaming, indicating potential opportunities for further expansion.
“DraftKings produced outstanding results for the second quarter of 2023. We grew revenue at an impressive year-over-year rate, captured additional GGR share in a cost-effective manner, and maintained our focus on operational efficiency,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “The positive Adjusted EBITDA that we generated in the second quarter exceeded our guidance, and we are well on our way to achieving positive Adjusted EBITDA again in the fourth quarter of 2023 and for fiscal year 2024 and beyond. We are excited by the additional product features and functionality that we are introducing leading into football season and also look forward to another successful online sportsbook launch in Kentucky this fall pending licensure and regulatory approvals.”
“We are acquiring new customers efficiently while simultaneously retaining and monetizing our existing players through rapid product innovation, less promotions, and higher hold from better bet mix,” said Jason Park, DraftKings’ Chief Financial Officer. “Our unit economics are outstanding with older states generating more than enough cash to fund investment in new states. This performance, combined with fixed costs that grew at only a mid-single digit year-over-year percentage rate in the second quarter, resulted in an inflection to positive Adjusted EBITDA that we expect will occur again in the fourth quarter and for full year 2024. As a result, we are increasing the midpoint of our fiscal year 2023 revenue guidance to $3.5 billion from $3.185 billion and improving the midpoint of our fiscal year 2023 Adjusted EBITDA guidance to ($205) million from ($315) million.”
For more detailed financial information and updates, interested parties can visit the Investor Relations section of DraftKings’ website at investors.draftkings.com.