DraftKings has posted an 88% revenue hike to $875 million in the second quarter of the year, which the US sports betting giant says has been driven by the efficient acquisition of new customers, product innovation leading to a higher hold percentage, and decreased promotional intensity in more mature states.
Following the positive results, the business has now raised its 2023 revenue guidance to a range of $3.46 billion to $3.54 billion, up from a previously announced range of $3.14 billion to $3.24 billion. The updated range equates to year-over-year growth of 54% to 58%.
Jason Robins, DraftKings’ Chief Executive Officer and Co-founder, said: "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.
"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 the fiscal year 2024 and beyond," he added.
Jason Robins, DraftKings’ CEO and Co-founder
During the quarter, Monthly Unique Payers (MUPs) increased to 2.1 million representing a jump of 44% compared to the same period in 2022. This increase reflects strong unique payer retention and acquisition across DraftKings’ Sportsbook and iGaming products, as well as the expansion of said products into new jurisdictions, noted the company.
Average Revenue per MUP (ARPMUP) came in at $137 in the second quarter of 2023, representing a 33% jump compared to Q2 2022. This increase was primarily attributed to improvement in the company’s structural sportsbook hold rate and reduced promotional intensity.
Jason Park, DraftKings’ Chief Financial, said: "We are acquiring new customers efficiently while simultaneously retaining and monetizing our existing players through rapid product innovation, fewer promotions, and higher hold from better bet mix. Our unit economics are outstanding with older states generating more than enough cash to fund investment in new states. "
Jason Park, DraftKings’ Chief Financial
In addition to its revenue forecast, the firm is also improving its fiscal year 2023 Adjusted EBITDA guidance. The company now expects the Adjusted EBITDA of between a $190 million loss and a $220 million loss compared to its prior guidance of between a $290 million loss and a $340 million loss, previously announced in May.
DraftKings is now live with mobile sports betting in 21 states, which collectively represents approximately 44% of the U.S. population. The brand is also live with iGaming in 5 states, approximately 11% of the U.S. population; and has sports betting and iGaming products in Ontario, Canada.
Looking forward, the firm said it expects to launch its sportsbook product in Kentucky on September 28, as well as in North Carolina, Vermont, and Puerto Rico, which have recently authorized mobile sports betting, pending licensure and regulatory approvals.
"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," Robins commented.
As for other Q2 highlights, during the period the company entered the running to acquire the US operations of PointsBet. DraftKings then tabled an unsolicited non-binding indicative proposal worth $195 million in June, just weeks after Fanatics announced plans to acquire PointsBet’s US business. However, after Fanatics returned with an improved proposal worth $225 million later in the month, DraftKings withdrew from the race.
Turning to the first half of the year, revenue for the six months to June 30 amounted to $1.64 billion, up 97.3% from H1 2022. The revenue hike meant operating loss was reduced from $824.5 million to $458.8 million, and a further $13.1 million in net finance costs meant pre-tax loss amounted to $472 million, lower than the previous year.