The return of the NFL season drove a strong third quarter of growth for DraftKings, which reported a 39% year-over-year revenue increase.
The sports betting and iGaming company announced on Thursday that it hauled in $1.1 billion in Q3 2024, a year after producing $790 million in the same quarter.
However, due to “customer-friendly sports outcomes” to start Q4, DraftKings lowered its yearly guidance numbers. Investors then lowered the company’s shares by 6% during extended trading and following the adjustment annoucements.
DraftKings reported a net income loss of $293.7 million in Q3 as the revenue costs reached $742.4 million, up 36.7% year-over-year.
Still, DraftKings attributed the yearly revenue increase to healthy customer engagement, efficient acquisition of new customers, the expansion of the sports betting operation in new jurisdictions, higher structural sportsbook hold percentage, improved promotional reinvestment, and the impact of the acquisition of Jackpocket Inc.
“DraftKings delivered strong performance in the third quarter with the return of NFL and college football,” said Jason Robins, DraftKings’ CEO and co-founder. “With major sports converging on the calendar, we are well-positioned to build on this momentum as we further enhance our top-ranked sportsbook app with additional live betting features and exciting new NBA markets. Our focus remains on driving sustainable revenue growth and profitability in 2025 and beyond.”
Changes in guidance
Sportsbooks across the U.S. are feeling the sting of a lack of upsets in the NFL that have balanced huge September profits.
Because of this, DraftKings announced a reduced fiscal-year revenue projection from the range of $5.05 to $5.25 billion reported on Aug. 1 to the range of $4.85 billion to $4.95 billion during Thursday’s release.
The company also expects 2024 Adjusted EBITDA to fall into the range of $240 million to $280 million, down from the earlier projection of $340 million to $420 million.
However, the gaming operator is confident enough in its current direction to introduce 2025 guidance. DraftKings is projecting a 31% year-over-year growth based on 2024 midpoints and a revenue range of $6.2 billion to $6.6 billion for the next fiscal year.
Adjusted EBITDA for 2025 is expected to be between $900 million and $1 billion.
Moving into Missouri
While DraftKings can’t factor in new jurisdictions to its future projections, the operator said in its quarterly release that it expects to be able to operate in Missouri, which legalized online and retail sports betting at the ballot on Tuesday’s Election Day.
DraftKings, along with rival FanDuel, pumped millions of dollars into the Winning for Missouri Education political action committee designed to successfully get the initiative in front of voters.
The Show Me State isn’t expected to launch sports betting until well into 2025. DraftKings, which is currently reaching 49% of the U.S. population, is likely a lock to be licensed there, and it would give the sports betting operator its 27th U.S. jurisdiction, including Washington, D.C.
DraftKings, which is also operating in Ontario, said it plans to launch in Puerto Rico, pending access, licensure, regulatory approvals, and contractual approvals.
Other Q3 figures
The gaming operator’s monthly unique customer average increased to 3.6 million in Q3, a 55% year-over-year leap. DraftKings said this showcases strong acquisition and retention across the sportsbook and iGaming platforms.
Excluding the boost from Jackpocket, an acquisition DraftKings finalized in May, monthly unique payers rose 27% compared to Q3 2023.
Average revenue per monthly unique payers, however, decreased 10% year-over-year to $103. DraftKings attributed that to lower Jackpocket customers compared to existing product offerings but partially offset by structural sports betting hold improvements and better promotional reinvestments.
“We achieved healthy results across our core value drivers in the third quarter with efficient customer acquisition and promotional reinvestment as well as improvement in our structural sportsbook hold percentage,” said Alan Ellingson, DraftKings’ CFO.
