DraftKings(DKNG) - 2025 Q3 - Quarterly Results

Financial Performance - DraftKings reported Q3 2025 revenue of $1,144 million, a 4% increase from $1,095 million in Q3 2024[3] - DraftKings revised its fiscal year 2025 revenue guidance to $5.9 billion to $6.1 billion, indicating a year-over-year growth of 24% to 28%[8] - The company expects fiscal year 2025 Adjusted EBITDA to be between $450 million and $550 million[8] - Net income attributable to common stockholders for the nine months ended September 30, 2025, was a loss of $132.716 million, an improvement from a loss of $372.434 million in the same period of 2024[22] - Adjusted EBITDA for the nine months ended September 30, 2025, was $276.785 million, compared to $91.853 million for the same period in 2024, indicating a significant increase in operational performance[28] - Basic earnings per share attributable to common stockholders for the nine months ended September 30, 2025, was a loss of $0.27, an improvement from a loss of $0.78 in the same period of 2024[33] User Engagement - Monthly Unique Payers (MUPs) rose by approximately 2% to 3.6 million in Q3 2025 compared to the same period in 2024, with a 6% increase excluding Jackpocket[8] - Average Revenue per MUP (ARPMUP) increased to $106, representing a 3% growth year-over-year[8] Cash Flow and Liquidity - Cash flows provided by operating activities for the nine months ended September 30, 2025, were $342.382 million, up from $92.578 million in 2024, reflecting improved cash generation[22] - The company reported a net cash increase of $377.994 million in cash and cash equivalents, restricted cash, and cash reserved for users at the end of the period, compared to a decrease of $466.978 million in the prior year[22] - Cash and cash equivalents at the end of the period were $1.228 billion, up from $877.822 million at the end of the same period in 2024, showing a strong liquidity position[22] Investment and Expenses - Stock-based compensation for the nine months ended September 30, 2025, was $236.020 million, down from $271.307 million in 2024, indicating a reduction in equity-based expenses[22] - The company incurred $93.432 million in cash paid for internally developed software costs during the nine months ended September 30, 2025, compared to $71.059 million in 2024, reflecting ongoing investment in technology[22] - The company reported a net cash flow used in investing activities of $116.109 million for the nine months ended September 30, 2025, compared to $488.184 million in 2024, indicating a decrease in cash outflows for investments[22] - Proceeds from the Term B Loan amounted to $588.116 million, contributing to the financing activities during the period[22] Market Presence and Operations - The company is live with mobile sports betting in 25 states, covering approximately 49% of the U.S. population[7] - DraftKings operates mobile and/or retail sports betting in 28 states, Washington, D.C., and Ontario, Canada, and iGaming in five states and Ontario[37] - DraftKings' daily fantasy sports product is available in 44 states and certain Canadian provinces[37] Future Plans and Guidance - DraftKings announced an increase in its share repurchase program from $1.0 billion to $2.0 billion[4] - DraftKings plans to launch DraftKings Predictions in the coming months, pending licensure[8] - The company forecasts an Adjusted EBITDA range for fiscal year 2025, but cannot assure the predictability of all components due to external factors[35] Regulatory and Compliance - The company is actively seeking licensure for product offerings in jurisdictions where it does not currently operate[36] - DraftKings has a non-GAAP effective tax rate of 23% as of Q3 2025, reflecting its level of non-GAAP profitability[36] Partnerships and Community Engagement - DraftKings emphasizes responsible gaming and has developed educational tools for players[37] - The company has partnerships with major sports leagues including the NFL, NHL, and NBA[37] Risks and Uncertainties - DraftKings' forward-looking statements involve substantial risks and uncertainties, including macroeconomic factors[39] - The company cautions that actual results may differ materially from forward-looking statements due to various risks and uncertainties[39]