DraftKings Q1 revenue up 20% to $1.41B on strong user growth, but lowers forecast for full year

DraftKings reported a 20% jump in first-quarter revenue on Friday, boosted by growth in monthly users and sports betting activity, but lowered its full-year forecast after what it called an unusually customer-friendly March Madness season hurt margins.

The Boston-based sports betting firm posted revenue of $1.41 billion for the quarter ended March 31, up from $1.175 billion a year earlier. Adjusted EBITDA rose to $102.6 million from $22.3 million in the year-ago period, while net loss narrowed to $33.8 million from $142.5 million.

CEO Jason Robins said: “Recent product enhancements are driving outperformance in our core value drivers, and our customer metrics continue to be strong through an evolving macroeconomic environment.”

Monthly unique payers (MUPs) rose 28% year-over-year to 4.3 million, while sportsbook handle increased 16% to $13.9 billion. However, the company’s average revenue per MUP (ARPMUP) dipped 5% to $108, though DraftKings noted this metric would have risen about 7% excluding its recent acquisition of Jackpocket.

Despite the strong top-line performance, DraftKings trimmed its full-year revenue guidance to $6.2 billion–$6.4 billion from a previous range of $6.3 billion–$6.6 billion. Adjusted EBITDA guidance was also lowered to $800 million–$900 million, down from $900 million–$1 billion.

“If not for customer-friendly sport outcomes in March, we would be raising our fiscal year 2025 revenue and Adjusted EBITDA guidance,” Robins said. “This past quarter was looking great until March Madness.”

Favorites dominated this year’s NCAA basketball tournament, with higher seeds winning 82% of games — the highest rate ever recorded — driving the company’s actual hold percentage to 9.5%, below the structural hold of 10.4%. “Favourites waltzed through the brackets,” the company noted, resulting in a $170 million revenue impact and a $111 million hit to EBITDA.

Robins said the company continues to analyze betting data to understand the gap between structural and actual hold. “Our analyses provide us strong confidence that the recent volatility we’ve experienced is random in nature,” he added.

CFO Alan Ellingson emphasized the company’s financial strength, noting that DraftKings repurchased 3.7 million shares in the first quarter. “We have a healthy balance sheet,” he said.

Other headwinds included tax hikes in Maryland and exits from Texas and New Mexico, which together impacted revenue by $30 million and EBITDA by $26 million.

DraftKings continues to expand its footprint, with mobile sports betting now live in 25 U.S. states and Washington D.C., covering 49% of the population. iGaming operations are live in five states and in Ontario, Canada. Voters in Missouri recently approved sports betting via ballot initiative, with a launch pending.

The company is also leaning into micro-betting and AI-driven strategies. Baseball in-game and micro-bets now account for 36% of volume, while Robins highlighted an “AI-first” approach to pricing and risk mitigation.

Robins expressed optimism despite the near-term volatility: “If that occurs, the model will pick it up” and the structural and actual hold will “converge.”