DraftKings Gears Up for Q4 Earnings: What's in the Offing?

Core Viewpoint - DraftKings Inc. is set to report its fourth-quarter 2024 results on February 13, with expectations of a wider adjusted loss per share and a significant year-over-year revenue increase driven by user growth and market expansion [1][2][3]. Group 1: Earnings Estimates - The Zacks Consensus Estimate for the fourth-quarter adjusted loss per share has widened to 19 cents from 17 cents over the past 30 days, compared to an adjusted loss per share of 10 cents in the same quarter last year [2]. - Revenue expectations are pegged at $1.41 billion, indicating a 14.9% year-over-year increase [2]. Group 2: Factors Influencing Q4 Results - The anticipated revenue growth is likely supported by a surge in new online sportsbook and iGaming users, along with strong customer-acquisition momentum [3]. - The integration of Jackpocket has broadened DraftKings' reach, providing cost-effective customer acquisition and new cross-selling opportunities [3]. - The company has been refining its product lineup with innovative features, which may have attracted more users to its Sportsbook platform [4]. Group 3: Cost and Tax Pressures - Despite user growth, marketing expenses are expected to remain elevated due to ongoing investments in the Jackpocket brand, potentially impacting adjusted EBITDA [4]. - Rising sportsbook tax rates in key states such as Illinois, New York, and Pennsylvania may have added cost pressures, affecting the bottom line [5]. Group 4: Earnings Prediction Model - The Zacks model predicts an earnings beat for DraftKings, supported by a positive Earnings ESP of +21.76% and a Zacks Rank of 3 (Hold) [6][7].