DraftKings(DKNG) - 2025 Q2 - Quarterly Results

Financial Highlights and Business Outlook Q2 2025 Performance Summary DraftKings achieved record financial results in the second quarter of 2025, with revenue growing 37% year-over-year to $1.513 billion, and new records for Net Income at $158 million and Adjusted EBITDA at $301 million Q2 2025 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $1,513 million | $1,104 million | +37% | | Net Income | $158 million | $64 million | +147% | | Adjusted EBITDA | $301 million | $128 million | +135% | - Revenue growth was attributed to healthy customer engagement, efficient customer acquisition, a higher structural Sportsbook hold percentage, and sportsbook-friendly outcomes[2] - The company repurchased 6.5 million shares through its stock repurchase program in the first half of 2025[3] Key Operating Metrics The company demonstrated continued growth in its user base and monetization, with Monthly Unique Payers (MUPs) increasing by 6% to 3.3 million and Average Revenue per MUP (ARPMUP) rising 29% to $151 Q2 2025 Operating Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Monthly Unique Payers (MUPs) | 3.3 million | N/A | +6% | | Average Revenue per MUP (ARPMUP) | $151 | N/A | +29% | - The acquisition of Jackpocket contributed to user growth; excluding its impact, MUPs increased by 5% and ARPMUP increased by 30% compared to Q2 2024[6] Fiscal Year 2025 Guidance DraftKings maintained its full-year 2025 guidance for both revenue and Adjusted EBITDA, anticipating revenue closer to the high end and Adjusted EBITDA near the midpoint, incorporating Missouri launch and higher tax rates FY 2025 Guidance | Guidance Metric | FY 2025 Range | | :--- | :--- | | Revenue | $6.2 billion to $6.4 billion | | Adjusted EBITDA | $800 million to $900 million | - The company is on track to deliver revenue closer to the high end of the guidance range, equating to approximately 32% year-over-year growth at the midpoint[5] - Guidance now incorporates the anticipated launch of mobile sports betting in Missouri and the impact of higher tax rates in New Jersey, Louisiana, and Illinois[10] Market Footprint DraftKings continues to expand its operational presence, with mobile sports betting live in 25 states and Washington D.C. (49% U.S. population) and iGaming in 5 states (11% U.S. population), with Missouri launch pending - Mobile sports betting is live in 25 states and Washington, D.C., representing approximately 49% of the U.S. population[10] - iGaming is live in 5 states, representing approximately 11% of the U.S. population[10] - The company expects to launch its Sportsbook product in Missouri, pending necessary approvals[10] Financial Statements Condensed Consolidated Balance Sheets As of June 30, 2025, DraftKings reported total assets of $4.47 billion, a slight increase from $4.28 billion, with total liabilities rising to $3.46 billion due to a new Term B Loan, and cash increasing to $1.26 billion Condensed Consolidated Balance Sheets (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,261,969 | $788,287 | | Total current assets | $1,786,699 | $1,533,761 | | Total assets | $4,474,302 | $4,283,725 | | Total current liabilities | $1,334,553 | $1,654,991 | | Total liabilities | $3,464,674 | $3,273,099 | | Total stockholders' equity | $1,009,628 | $1,010,626 | Condensed Consolidated Statements of Operations The company reported a significant turnaround in profitability for Q2 2025, posting a net income of $157.9 million, driven by a 37% revenue increase to $1.51 billion, leading to an income from operations of $150.6 million Condensed Consolidated Statements of Operations (in thousands) | Income Statement | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $1,512,507 | $1,104,441 | | Income (loss) from operations | $150,644 | $(32,388) | | Net income attributable to common stockholders | $157,936 | $63,822 | | Diluted Earnings Per Share | $0.30 | $0.10 | Revenue Disaggregation In Q2 2025, Sportsbook revenue grew by 45.3% to $997.9 million, driven by a 6.3% increase in handle and improved net revenue margin, while iGaming revenue increased by 22.6% to $429.7 million Revenue by Source (in thousands) | Revenue Source | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Sportsbook Revenue | $997,872 | $686,889 | +45.3% | | iGaming Revenue | $429,660 | $350,552 | +22.6% | | Other Revenue | $84,975 | $67,000 | +26.8% | | Total Revenue | $1,512,507 | $1,104,441 | +36.9% | - The Sportsbook Net Revenue Margin increased to 8.7% in Q2 2025 from 6.4% in Q2 2024[18] Condensed Consolidated Statements of Cash Flows For the first six months of 2025, DraftKings generated $54.9 million in cash from operating activities, a significant improvement, with financing activities providing a net inflow of $253.1 million, ending with $1.56 billion in combined cash Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $54,905 | $(41,006) | | Net cash used in investing activities | $(74,278) | $(456,534) | | Net cash from financing activities | $253,134 | $(52,469) | - Financing activities included $588.1 million in proceeds from a Term B Loan and $242.7 million used for stock repurchases under the company's program[20] Supplemental Information Non-GAAP Financial Measures The company provides non-GAAP measures, Adjusted EBITDA and Adjusted Earnings Per Share, to supplement GAAP results by excluding items like stock-based compensation and amortization of acquired intangibles for clearer core performance - DraftKings uses Adjusted EBITDA and Adjusted Earnings (Loss) Per Share to evaluate its core operating performance and trends, as these measures exclude certain non-recurring, non-cash, or non-operating items[21][24] Reconciliation of Net Income (Loss) to Adjusted EBITDA For Q2 2025, Adjusted EBITDA was $300.6 million, reconciled from a net income of $157.9 million, primarily by adding back stock-based compensation and depreciation & amortization Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Reconciliation | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $157,936 | $63,822 | | Adjustments | $142,708 | $64,145 | | Adjusted EBITDA | $300,644 | $127,967 | Reconciliation of Diluted EPS to Adjusted EPS Adjusted Earnings Per Share for Q2 2025 was $0.38, reconciled from a GAAP diluted EPS of $0.30, with primary adjustments for stock-based compensation and amortization of acquired intangible assets Reconciliation of Diluted EPS to Adjusted EPS (per share) | Reconciliation | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Diluted earnings (loss) per share | $0.30 | $0.10 | | Adjustments | $0.08 | $0.12 | | Adjusted Earnings Per Share | $0.38 | $0.22 | About DraftKings & Forward-Looking Statements DraftKings is a U.S.-based digital sports entertainment and gaming company offering daily fantasy, sports betting, and iGaming, with the report containing forward-looking statements subject to risks and uncertainties - DraftKings is a U.S.-based vertically integrated sports betting operator with products in daily fantasy, regulated gaming, and digital media[31] - The report includes forward-looking statements regarding guidance, future results, and strategic plans, which are not guarantees of future performance and are subject to risks[33][34]