DraftKings(DKNG) - 2025 Q4 - Annual Results

Financial Performance - DraftKings reported fourth quarter revenue of $1,989 million, a 43% increase from $1,393 million in the same period of 2024[3]. - The company achieved positive net income of $136 million in Q4 2025, compared to a net loss of $135 million in Q4 2024[15]. - Adjusted EBITDA for Q4 2025 was $343 million, significantly up from $89 million in Q4 2024[17]. - Net income attributable to common stockholders for the year ended December 31, 2025, was $3.71 million, a significant improvement from a loss of $507.29 million in 2024[19]. - Adjusted EBITDA for the year ended December 31, 2025, was $619.99 million, compared to $181.31 million in 2024, reflecting a year-over-year increase of 242%[25]. - Cash flows provided by operating activities for 2025 were $662.86 million, up from $417.77 million in 2024, indicating a 58.6% increase[19]. - Adjusted diluted earnings per share for the year ended December 31, 2025, was $0.66, compared to $0.24 in 2024, marking a 175% increase[28]. User Engagement and Growth - Monthly Unique Payers (MUPs) remained stable at 4.8 million, with a 5% increase excluding Jackpocket compared to Q4 2024[8]. - Average Revenue per MUP (ARPMUP) rose to $139 in Q4 2025, reflecting a 43% increase year-over-year[8]. - DraftKings anticipates fiscal year 2026 revenue between $6.5 billion and $6.9 billion, with Adjusted EBITDA guidance of $700 million to $900 million[8]. - DraftKings plans to invest in DraftKings Predictions to enhance customer experience and acquire millions of new customers[4]. Cash Management and Investments - The company reported a cash and cash equivalents balance of $1.13 billion at the end of 2025, compared to $788.29 million at the end of 2024, representing a 43.7% increase[19]. - Cash paid for acquisitions in 2025 was $16.38 million, a significant decrease from $441.49 million in 2024, indicating a strategic reduction in acquisition spending[19]. - The company reported a net cash outflow from investing activities of $166.00 million in 2025, compared to a much larger outflow of $566.60 million in 2024, reflecting improved cash management[19]. - The company’s total liabilities to users decreased by $44.45 million in 2025, contrasting with an increase of $110.68 million in 2024, indicating better user liability management[19]. - The company’s cash reserved for users at the end of 2025 was $469.45 million, down from $525.41 million at the end of 2024, reflecting changes in user engagement and cash management strategies[19]. Tax and Compliance - A discrete income tax benefit of $14.6 million was recorded in 2025, compared to $87.3 million in 2024, both due to non-recurring partial releases of the U.S. valuation allowance[1]. - The estimated non-GAAP effective tax rate is 23% as of December 31, 2025, reflecting adjustments for non-GAAP profitability[1]. Market Presence and Operations - The company is live with mobile sports betting in 26 states and Washington, D.C., covering approximately 52% of the U.S. population[7]. - DraftKings is also operational in iGaming across 5 states, representing about 11% of the U.S. population[11]. - The Company operates in 29 states, Washington, D.C., Puerto Rico, and Ontario, Canada, with its sports betting operations and iGaming in five states and Ontario[2]. - DraftKings' daily fantasy sports product is available in 44 states and certain Canadian provinces[2]. - The Company owns Jackpocket, the leading digital lottery courier app in the U.S.[2]. - DraftKings is an official partner of major sports leagues including the NFL, NHL, and NBA, enhancing its market presence[2]. - The Company emphasizes responsible gaming and has developed educational tools for players[2]. Strategic Changes - The Company recorded amortization of acquired intangible assets of $36.3 million for Q4 2025 and $38.6 million for Q4 2024, totaling $149.3 million for the year ended 2025 and $159.8 million for 2024[1]. - The Company reported a $38.0 million gain related to contingent consideration in 2025, alongside various non-recurring expenses totaling $27.8 million for the discontinuance of the Reignmakers product offering in 2024[1]. - Forward-looking statements indicate potential risks including changes in laws, economic conditions, and litigation that could impact future performance[3].