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DraftKings reports Q1 revenue of $770 million

4 May 2023

(PRESS RELEASE) -- DraftKings Inc. today announced its first quarter 2023 financial results. The company also posted a first quarter 2023 business update and an earnings presentation on the Investor Relations section of its website at investors.draftkings.com.

First Quarter 2023 Highlights:
For the three months ended 31 March 2023, DraftKings reported revenue of $770 million, an increase of 84% compared to $417 million during the same period in 2022 driven primarily by efficient acquisition of new customers, product innovation driving higher hold percentage, decreased promotional intensity in more mature states, and continued healthy customer retention.

"DraftKings’ first quarter performance – 84% year-over-year revenue growth and share gains underpinned by a relentless focus on operational efficiency – demonstrates that this is a company positioned for sustained success,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “We delivered highly successful online sportsbook launches in Ohio and our home state of Massachusetts and continued to create meaningful product differentiation driven by in-house innovations. We acquired customers faster and more efficiently and, importantly, saw healthy retention across cohorts. Looking at the remainder of 2023, I am confident DraftKings is well-positioned to achieve profitability on an Adjusted EBITDA basis in the near-term and deliver long-term value for our shareholders.”

“Strong execution across the organization is showing up in our results,” added Jason Park, DraftKings’ Chief Financial Officer. “Revenue grew at a healthy rate due to core drivers around customer acquisition, retention and monetization, including decreased promotional intensity and higher structural hold. In addition, our efficiency efforts produced clear results as demonstrated by significant year-over-year increases in gross margin and Adjusted EBITDA. Therefore, we are increasing the midpoint of our fiscal year 2023 revenue guidance to $3.185 billion from $2.95 billion and improving the midpoint of our fiscal year 2023 Adjusted EBITDA guidance to ($315) million from ($400) million.”

Continued Healthy Growth in Customer Retention, Acquisition, and Engagement:

  • Monthly Unique Payers (“MUPs”) increased to 2.8 million average monthly unique paying customers in the first quarter of 2023, representing an increase of 39% compared to the first quarter of 2022. This increase reflects strong unique payer retention and acquisition across DraftKings’ Sportsbook and iGaming products as well as the expansion of its Sportsbook and iGaming products into new jurisdictions.

  • Average Revenue per MUP (“ARPMUP”) was $92 in the first quarter of 2023, representing a 35% increase compared to the same period in 2022. This increase was primarily due to improvement in the Company’s structural sportsbook hold rate and reduced promotional intensity.

  • Detailed financial data and other information for the first quarter of 2023 is available in the financial statements set forth below under the caption “Financial Results.”

Raising 2023 Revenue Guidance and Improving 2023 Adjusted EBITDA Guidance:

  • DraftKings is raising its fiscal year 2023 revenue guidance to a range of $3.135 billion to $3.235 billion from the range of $2.85 billion to $3.05 billion, which the Company previously announced on February 16, 2023. The Company’s updated 2023 revenue guidance range equates to year-over-year growth of 40% to 44%.

  • DraftKings is also improving its fiscal year 2023 Adjusted EBITDA guidance. The Company now expects fiscal year 2023 Adjusted EBITDA of between ($290) million and ($340) million compared to its prior fiscal year 2023 Adjusted EBITDA guidance of between ($350) million and ($450) million, which the Company previously announced on February 16, 2023.

  • The Company’s revenue and Adjusted EBITDA guidance for fiscal year 2023 includes all the existing jurisdictions in which it is live plus Puerto Rico, in which it expects to launch during the guided period.

Expanded Mobile Sports Betting Footprint:

  • DraftKings is live with mobile sports betting in 21 states that collectively represent approximately 44% of the U.S. population following the launch of its online Sportsbook product in Massachusetts on March 10, 2023.

  • DraftKings is also live with iGaming in 5 states, representing approximately 11% of the U.S. population.

  • DraftKings is live with its Sportsbook and iGaming products in Ontario, Canada, which represents approximately 40% of Canada’s population.

  • Kentucky and Puerto Rico have authorized mobile sports betting and collectively represent approximately 2% of the U.S. population. DraftKings expects to launch its Sportsbook product in these jurisdictions pending licensure and regulatory approvals.

In 2023, 12 states that collectively represent approximately 24% of the U.S. population have either introduced legislation to legalize mobile sports betting or introduced bills that may result in sports wagering referendums during an upcoming election. In addition, 5 states that collectively represent approximately 14% of the U.S. population have either introduced legislation to legalize iGaming or introduced a bill that may result in an iGaming referendum during an upcoming election.
 
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