DraftKings(DKNG) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Highlights DraftKings reported a 20% year-over-year revenue increase to $1.41 billion for Q1 2025, driven by customer engagement and the Jackpocket acquisition, with 3.7 million shares repurchased Revenue Performance | Metric | Q1 2025 | Q1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,409 million | $1,175 million | +$234 million | +20% | - Key growth drivers included healthy customer engagement, efficient customer acquisition, higher structural Sportsbook hold, and the acquisition of Jackpocket[3] - The CEO noted that without customer-friendly sports outcomes in March, the company would have raised its fiscal year 2025 guidance[4] - The company repurchased 3.7 million shares in the first quarter under its existing stock repurchase program[4] Fiscal Year 2025 Guidance The company revised its fiscal year 2025 guidance downwards, projecting revenue between $6.2 billion and $6.4 billion and Adjusted EBITDA between $800 million and $900 million, excluding Missouri launch impact Revised Fiscal Year 2025 Guidance | Guidance Metric | Previous FY2025 Guidance | Revised FY2025 Guidance | | :--- | :--- | :--- | | Revenue | $6.3B - $6.6B | $6.2B - $6.4B | | Adjusted EBITDA | $900M - $1.0B | $800M - $900M | - The revised revenue guidance equates to approximately 32% year-over-year growth at the midpoint[8] - The current guidance for fiscal year 2025 does not include the impact of a potential mobile sports betting launch in Missouri[8] Operational Metrics and Market Footprint Monthly Unique Payers (MUPs) grew 28% to 4.3 million (11% organically), while Average Revenue per MUP (ARPMUP) decreased 5% to $108 (7% organically), with the company live in 25 states for mobile sports betting Key Operational Metrics | Metric | Q1 2025 | YoY Change (Reported) | YoY Change (Ex-Jackpocket) | | :--- | :--- | :--- | :--- | | Monthly Unique Payers (MUPs) | 4.3 million | +28% | +11% | | Average Revenue per MUP (ARPMUP) | $108 | -5% | +7% | - DraftKings is live with mobile sports betting in 25 states and Washington, D.C., covering approximately 49% of the U.S. population[7] - The company is live with iGaming in 5 states, representing about 11% of the U.S. population[11] - Following voter approval in Missouri, DraftKings expects to launch its Sportsbook product in the state, pending necessary approvals[11] Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2025, including statements of operations, balance sheets, and cash flows Condensed Consolidated Statements of Operations Q1 2025 revenue grew to $1.41 billion, with loss from operations significantly narrowed to $(46.3) million and net loss per share reduced to $(0.07) Consolidated Statements of Operations | (In thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $1,408,806 | $1,174,996 | | Loss from operations | $(46,331) | $(138,838) | | Net loss attributable to common stockholders | $(33,864) | $(142,568) | | Loss per share (Basic and diluted) | $(0.07) | $(0.30) | Condensed Consolidated Balance Sheets As of March 31, 2025, total assets reached $4.52 billion, with cash and cash equivalents at $1.12 billion, and total liabilities increasing to $3.64 billion due to a new Term B Loan Consolidated Balance Sheets | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,119,740 | $788,287 | | Total assets | $4,515,813 | $4,283,725 | | Total liabilities | $3,642,898 | $3,273,099 | | Total stockholders' equity | $872,915 | $1,010,626 | Condensed Consolidated Statements of Cash Flows In Q1 2025, net cash used in operating activities was $(119.0) million, while financing activities generated $372.8 million primarily from a new Term B Loan Consolidated Statements of Cash Flows | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(119,016) | $(70,395) | | Net cash provided by (used in) investing activities | $(39,019) | $(39,199) | | Net cash provided by (used in) financing activities | $372,823 | $(30,642) | Revenue Disaggregation Sportsbook revenue grew 20.1% to $882.0 million, iGaming revenue increased 14.5% to $423.5 million, and Other Revenue surged 45.7% to $103.4 million Revenue by Segment | (In thousands) | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Sportsbook Revenue | $881,957 | $734,055 | 20.1% | | iGaming Revenue | $423,471 | $369,997 | 14.5% | | Other Revenue | $103,378 | $70,944 | 45.7% | | Total Revenue | $1,408,806 | $1,174,996 | 19.9% | Non-GAAP Financial Measures DraftKings uses Adjusted EBITDA and Adjusted EPS as key non-GAAP metrics to assess core operational performance, providing reconciliations to GAAP equivalents - The company uses Adjusted EBITDA and Adjusted Earnings (Loss) Per Share to evaluate operating performance, similar to its U.S. competitors[23] - Adjusted EBITDA is defined as net income (loss) adjusted for interest, taxes, D&A, stock-based compensation, transaction costs, and other non-recurring items[24] - Adjusted EPS is defined as basic EPS adjusted for amortization of acquired intangibles, stock-based compensation, and other non-recurring items[25] Reconciliation of Net Income (Loss) to Adjusted EBITDA Adjusted EBITDA for Q1 2025 significantly increased to $102.6 million from $22.4 million in Q1 2024, primarily by adjusting for stock-based compensation and D&A Reconciliation of Net Loss to Adjusted EBITDA | (In thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(33,864) | $(142,568) | | Stock-based compensation | $78,846 | $93,535 | | Depreciation and amortization | $70,116 | $53,180 | | Adjusted EBITDA | $102,630 | $22,390 | Reconciliation of EPS to Adjusted EPS Adjusted Earnings Per Share improved to $0.12 in Q1 2025 from $0.03 in Q1 2024, adjusting GAAP basic loss per share for stock-based compensation and amortization Reconciliation of EPS to Adjusted EPS | Per Share Data | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Basic earnings (loss) per share | $(0.07) | $(0.30) | | Stock-based compensation | $0.16 | $0.20 | | Amortization of acquired intangible assets | $0.09 | $0.06 | | Adjusted Earnings (Loss) Per Share | $0.12 | $0.03 |