Sportsbetting NEWS

Trending

Digital sports and entertainment company DraftKings has delivered a robust performance in Q1 2024, surpassing expectations despite facing headwinds related to sporting outcomes throughout the quarter. The company reported a revenue of $1.18 billion, marking a 53 percent increase from Q1 2023. This growth was fuelled by strong consumer engagement, efficient customer acquisition, and new market launches.

“As you can see, DraftKings is off to a fantastic start for 2024, and we’re really excited about the rest of this year and beyond. DraftKings’ performance in the first quarter of 2024 was outstanding, reflecting healthy revenue growth and a scaled fixed cost structure that positions us to drive rapidly improving Adjusted EBITDA."

Jason Robins, CEO

adjusted EBITDA also saw a significant rise to $22.4 million, a stark contrast to the $221.6 million loss reported in the same period last year. In addition the net loss narrowed to $142.6 million, compared to $397.1 million in the prior-year period.

Despite the impact of unfavourable sporting outcomes, the company managed to thrive, thanks to a higher structural hold percentage and increased promotional spending across Online Sports Betting (OSB) and iGaming. Analysts at JMP Securities noted that the scale of the company and its diverse product offering helped smooth out gaming margins during the Super Bowl.

raised the mid-point of its full-year 2024 revenue guidance to $4.9 billion, up from $4.78 billion. The EBITDA guidance was also revised upwards to $500 million, compared to the previous projection of $460 million.

In terms of non-financial metrics, the company reported a 23 percent year-on-year increase in monthly unique payers (MUP) to 3.4 million. This was attributed to strong player acquisition and retention across its products, as well as expansion into new jurisdictions. The average revenue per MUP stood at $114, representing a 25 percent increase compared to Q1 2024.

Looking ahead, CEO Jason Robins outlined the company’s strategic plans for 2024 during the Q1 earnings call. The company aims to foster an entrepreneurial culture, develop the next generation of leaders, and explore ways to optimize its capital structure.

Acquisition of Jackpot

DraftKings also announced the $750 million acquisition of lottery ticket app Jackpocket in February to improve cross-sell opportunities. However, Robins emphasized that the company intends to be “super disciplined” on the M&A front.

The payment structure for the acquisition is as follows: approximately 55 percent of the total consideration, or around $412.5 million, will be paid in cash from DraftKings’ balance sheet, and the remaining 45 percent, or approximately $337.5 million, will be paid in DraftKings’ Class A common stock. The transaction is subject to approval by Jackpocket stockholders, along with receipt of required regulatory approvals and other customary closing conditions, and is expected to close before the end of 2024.

This acquisition is expected to bring significant value to DraftKings. It will not only allow DraftKings to access and grow into the massive U.S. lottery industry but also strengthen its position in Sportsbook and iGaming through higher customer lifetime value and an enhanced customer acquisition engine.

Jackpocket is recognized for its proprietary and highly-scalable technology, a strong brand, and an outstanding founder-led management team. The acquisition is expected to drive $260 million to $340 million of incremental revenue and $60 million to $100 million of incremental Adjusted EBITDA in fiscal year 2026.

DraftKings’ Q1 2024 performance demonstrates its resilience and ability to deliver strong results despite challenging market conditions. The company’s strategic initiatives and disciplined approach to growth signal a promising outlook for the rest of the year.

Lea Hogg
6 hours ago
Lea Hogg
1 day ago
Shirley Pulis Xerxen
4 days ago
Jenny Ortiz
4 days ago
Lea Hogg
1 week ago
Katy Micallef
1 week ago
Lea Hogg
1 week ago
Rachel Rigby
1 week ago
Jenny Ortiz
1 week ago
Lea Hogg
1 week ago
Lea Hogg
1 week ago

News By Topic

1459 Articles
2839 Articles
2625 Articles
2339 Articles

Articles

Lea Hogg
6 hours ago