DraftKings Reports Third Quarter Revenue Growth of 39% to $1,095 Million; Introduces Fiscal Year 2025 Revenue Guidance of $6.2 Billion to $6.6 Billion and Reiterates Fiscal Year 2025 Adjusted EBITDA Guidance of $900 Million to $1.0 Billion
DraftKings reported strong Q3 2024 results with revenue of $1,095 million, up 39% year-over-year. Monthly Unique Payers increased 55% to 3.6 million, while Average Revenue per MUP decreased 10% to $103. The company introduced FY2025 revenue guidance of $6.2-6.6 billion and reiterated Adjusted EBITDA guidance of $900 million to $1.0 billion. However, DraftKings revised down its FY2024 guidance due to customer-friendly sport outcomes, now expecting revenue of $4.85-4.95 billion and Adjusted EBITDA of $240-280 million.
DraftKings ha riportato risultati solidi nel terzo trimestre del 2024, con ricavi di $1.095 milioni, in aumento del 39% rispetto all'anno precedente. I Payers Unici Mensili sono aumentati del 55% a 3,6 milioni, mentre il Ricavo Medio per MUP è diminuito del 10% a $103. L'azienda ha introdotto una previsione di ricavi per l'anno fiscale 2025 di $6,2-6,6 miliardi e ha ribadito la previsione di EBITDA Adjusted di $900 milioni a $1,0 miliardi. Tuttavia, DraftKings ha rivisto al ribasso la previsione per l'anno fiscale 2024 a causa dei risultati favorevoli agli utenti sportivi, ora ci si aspetta un fatturato di $4,85-4,95 miliardi e un EBITDA Adjusted di $240-280 milioni.
DraftKings reportó resultados sólidos en el tercer trimestre de 2024, con ingresos de $1,095 millones, un aumento del 39% en comparación con el año anterior. Los Pagadores Únicos Mensuales aumentaron un 55% a 3.6 millones, mientras que los Ingresos Promedio por MUP disminuyeron un 10% a $103. La empresa introdujo una guía de ingresos para el año fiscal 2025 de $6.2-6.6 mil millones y reiteró la guía de EBITDA Ajustado de $900 millones a $1.0 mil millones. Sin embargo, DraftKings revisó a la baja su guía para el año fiscal 2024 debido a resultados favorables para los clientes en deportes, ahora se espera ingresos de $4.85-4.95 mil millones y EBITDA Ajustado de $240-280 millones.
DraftKings는 2024년 3분기에 $10억 9500만 달러의 수익을 기록하며 전년 대비 39% 증가한 강력한 실적을 발표했습니다. 월간 고유 사용자 수는 55% 증가하여 360만 명에 이르렀으며, MUP당 평균 수익은 10% 감소하여 $103이 되었습니다. 회사는 2025 회계연도 수익 가이드를 $62억-66억 달러로 제시했으며, 조정된 EBITDA 가이드를 $9억-$10억 달러로 재확인했습니다. 그러나 DraftKings는 고객 친화적인 스포츠 결과로 인해 2024 회계연도 가이드를 하향 조정하여 $48억5천만-49억5천만 달러의 수익 및 조정된 EBITDA $2억4천만-2억8천만 달러를 예상하고 있습니다.
DraftKings a annoncé de solides résultats pour le troisième trimestre 2024, avec des revenus de $1.095 millions, en hausse de 39 % par rapport à l'année précédente. Les Payers Uniques Mensuels ont augmenté de 55 % pour atteindre 3,6 millions, tandis que le Revenu Moyen par MUP a diminué de 10 % pour s'établir à 103 $. L'entreprise a introduit des prévisions de revenus pour l'exercice 2025 de 6,2 à 6,6 milliards de dollars et a réaffirmé ses prévisions d'EBITDA Ajusté de 900 millions à 1 milliard de dollars. Cependant, DraftKings a révisé à la baisse ses prévisions pour l'exercice 2024 en raison de résultats sportifs favorables aux clients, s'attendant maintenant à des revenus de 4,85 à 4,95 milliards de dollars et un EBITDA Ajusté de 240 à 280 millions de dollars.
DraftKings hat starke Ergebnisse für das dritte Quartal 2024 gemeldet, mit Einnahmen von $1.095 Millionen, was einem Anstieg von 39% im Vergleich zum Vorjahr entspricht. Die monatlichen einzigartigen Zahler stiegen um 55% auf 3,6 Millionen, während der durchschnittliche Umsatz pro MUP um 10% auf $103 sank. Das Unternehmen führte eine Umsatzprognose für das Geschäftsjahr 2025 von $6,2-6,6 Milliarden ein und bekräftigte die Prognose für das bereinigte EBITDA von $900 Millionen bis $1,0 Milliarden. Allerdings hat DraftKings seine Prognose für das Geschäftsjahr 2024 aufgrund von kundenfreundlichen Sportergebnissen nach unten korrigiert und erwartet nun Einnahmen von $4,85-4,95 Milliarden und ein bereinigtes EBITDA von $240-280 Millionen.
- Revenue grew 39% YoY to $1,095 million in Q3 2024
- Monthly Unique Payers increased 55% to 3.6 million
- Strong FY2025 revenue guidance of $6.2-6.6 billion
- FY2025 Adjusted EBITDA guidance of $900M-$1.0B maintained
- Average Revenue per MUP decreased 10% to $103
- FY2024 revenue guidance lowered to $4.85-4.95B from $5.05-5.25B
- FY2024 Adjusted EBITDA guidance reduced to $240-280M from $340-420M
- Q3 2024 net loss of $293.7 million
Insights
DraftKings delivered a strong Q3 with
However, DraftKings lowered its FY2024 guidance due to unfavorable sports outcomes, now expecting revenue of
The expansion into new jurisdictions and Missouri's recent legalization strengthen DraftKings' market position, now covering
BOSTON, Nov. 07, 2024 (GLOBE NEWSWIRE) -- DraftKings Inc. (Nasdaq: DKNG) (“DraftKings” or the “Company”) today announced results for the third quarter of 2024. The Company also posted a third quarter 2024 business update and an earnings presentation on the Investor Relations section of its website at investors.draftkings.com.
Third Quarter 2024 Highlights
For the three months ended September 30, 2024, DraftKings reported revenue of
“DraftKings delivered strong performance in the third quarter with the return of NFL and college football,” said Jason Robins, DraftKings’ Chief Executive Officer 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.”
“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’ Chief Financial Officer. “The midpoint of our inaugural fiscal year 2025 revenue guidance equates to
Continued Healthy Growth in Customer Retention, Acquisition, and Engagement
- Monthly Unique Payers (“MUPs”) increased to 3.6 million average monthly unique paying customers in the third quarter of 2024, representing an increase of
55% compared to the third quarter of 2023. This increase reflects strong unique player acquisition and retention across DraftKings’ Sportsbook and iGaming products, the expansion of its Sportsbook product into new jurisdictions and the impact of the acquisition of Jackpocket. Excluding the impact of the acquisition of Jackpocket, MUPs increased by approximately27% compared to the third quarter of 2023.
- Average Revenue per MUP (“ARPMUP”) was
$103 in the third quarter of 2024, representing a10% decrease compared to the same period in 2023. The decrease was primarily due to lower ARPMUP for Jackpocket customers, when compared to customers of DraftKings’ existing product offerings prior to the acquisition, partially offset by improvement in the Company’s structural Sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming. Excluding the impact of the acquisition of Jackpocket, ARPMUP increased approximately8% compared to the third quarter of 2023.
- Detailed financial data and other information for the third quarter of 2024 is available in the financial statements set forth below under the caption “Financial Results.”
Fiscal Year 2024 and 2025 Guidance
- DraftKings is introducing a fiscal year 2025 revenue guidance range of
$6.2 billion to$6.6 billion , which equates to approximately31% year-over-year growth based on the midpoints of the Company’s updated fiscal year 2024 revenue guidance range and the Company’s fiscal year 2025 revenue guidance range.
- DraftKings continues to expect fiscal year 2025 Adjusted EBITDA to be in the range of
$900 million to$1.0 billion , which the Company previously announced on August 1, 2024.
- DraftKings is revising its fiscal year 2024 revenue guidance due to the impact of customer-friendly sport outcomes early in the fourth quarter of 2024 to a range of
$4.85 billion to$4.95 billion from the range of$5.05 billion to$5.25 billion , which the Company previously announced on August 1, 2024. The Company’s updated 2024 revenue guidance range equates to year-over-year growth of32% to35% .
- DraftKings is revising its fiscal year 2024 Adjusted EBITDA guidance due to the impact of customer-friendly sport outcomes early in the fourth quarter of 2024, partially offset by promotional optimization and expense efficiency. The Company now expects fiscal year 2024 Adjusted EBITDA of between
$240 million and$280 million compared to its prior fiscal year 2024 Adjusted EBITDA guidance of between$340 million and$420 million , which the Company previously announced on August 1, 2024.
- The Company’s guidance for fiscal years 2024 and 2025 includes all of its existing mobile sports betting and iGaming jurisdictions as well as Jackpocket.
- DraftKings’ revenue and Adjusted EBITDA guidance for fiscal years 2024 and 2025 does not include the impact of mobile sports betting launching in Missouri. DraftKings expects to launch its Sportsbook product in Missouri pending market access, licensure, regulatory approvals, and contractual approvals where applicable.
Mobile Sports Betting and iGaming Footprint
- DraftKings is live with mobile sports betting in 25 states and Washington, D.C. which collectively represent approximately
49% of the U.S. population.
- DraftKings is also live with iGaming in 5 states, representing approximately
11% of the U.S. population.
- DraftKings is live with its Sportsbook and iGaming products in Ontario, Canada, which represents approximately
40% of Canada’s population.
- On November 5, 2024, Missouri voters passed a ballot initiative that legalized sports betting in the state. DraftKings expects to launch its Sportsbook product in Missouri pending market access, licensure, regulatory approvals, and contractual approvals where applicable.
- DraftKings expects to launch its Sportsbook product in Puerto Rico pending market access, licensure, regulatory approvals, and contractual approvals where applicable.
Webcast and Conference Call Details
As previously announced, DraftKings will host a conference call and audio webcast tomorrow, Friday, November 8, 2024, at 8:30 a.m. ET, during which management will discuss the Company’s results for the quarter and provide commentary on business performance. A question-and-answer session will follow the prepared remarks.
To listen to the audio webcast and live question and answer session, please visit DraftKings’ investor relations website at investors.draftkings.com. A live audio webcast of the earnings conference call will be available on the Company’s website at investors.draftkings.com, along with a copy of this press release, the Company’s Quarterly Report on Form 10-Q, a slide presentation and a third quarter 2024 business update. The audio webcast will be available on the Company’s investor relations website until 11:59 p.m. ET on December 31, 2024.
Financial Results
DraftKings’ third quarter 2024 financial results, as well as the financial results for the respective comparative periods, are presented below:
DRAFTKINGS INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Amounts in thousands, except par value) | ||||||||
| September 30, 2024 | December 31, | ||||||
| (Unaudited) | 2023 | ||||||
Assets | | |||||||
Current assets: | | |||||||
Cash and cash equivalents | $ | 877,822 | $ | 1,270,503 | ||||
Restricted cash | 13,807 | 11,700 | ||||||
Cash reserved for users | 264,886 | 341,290 | ||||||
Receivables reserved for users | 341,817 | 301,770 | ||||||
Accounts receivable | 64,358 | 47,539 | ||||||
Prepaid expenses and other current assets | 81,207 | 98,565 | ||||||
Total current assets | 1,643,897 | 2,071,367 | ||||||
Property and equipment, net | 52,924 | 60,695 | ||||||
Intangible assets, net | 891,910 | 690,620 | ||||||
Goodwill | 1,456,009 | 886,373 | ||||||
Operating lease right-of-use assets | 83,292 | 93,985 | ||||||
Equity method investments | 12,598 | 10,280 | ||||||
Deposits and other non-current assets | 132,346 | 131,546 | ||||||
Total assets | $ | 4,272,976 | $ | 3,944,866 | ||||
| | |||||||
Liabilities and Stockholders’ equity | | |||||||
Current liabilities: | | |||||||
Accounts payable and accrued expenses | $ | 700,720 | $ | 639,599 | ||||
Liabilities to users | 930,614 | 851,898 | ||||||
Operating lease liabilities, current portion | 11,277 | 11,499 | ||||||
Other current liabilities | 4,124 | 46,624 | ||||||
Total current liabilities | 1,646,735 | 1,549,620 | ||||||
Convertible notes, net of issuance costs | 1,255,757 | 1,253,760 | ||||||
Non-current operating lease liabilities | 75,762 | 80,827 | ||||||
Warrant liabilities | 25,439 | 63,568 | ||||||
Long-term income tax liabilities | 73,835 | 72,810 | ||||||
Other long-term liabilities | 119,332 | 83,975 | ||||||
Total liabilities | $ | 3,196,860 | $ | 3,104,560 | ||||
Commitments and contingent liabilities | | |||||||
| | |||||||
Stockholders’ equity: | | |||||||
Class A common stock, | $ | 47 | $ | 46 | ||||
Class B common stock, | 39 | 39 | ||||||
Treasury stock, at cost; 13,912 and 11,901 shares as of September 30, 2024 and December 31, 2023, respectively | (490,352 | ) | (412,182 | ) | ||||
Additional paid-in capital | 7,836,271 | 7,149,858 | ||||||
Accumulated deficit | (6,306,377 | ) | (5,933,943 | ) | ||||
Accumulated other comprehensive income | 36,488 | 36,488 | ||||||
Total stockholders’ equity | $ | 1,076,116 | $ | 840,306 | ||||
Total liabilities and stockholders’ equity | $ | 4,272,976 | $ | 3,944,866 |
DRAFTKINGS INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Amounts in thousands, except per share data) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenue | $ | 1,095,490 | $ | 789,957 | $ | 3,374,927 | $ | 2,434,536 | ||||||||
Cost of revenue | 742,434 | 543,454 | 2,115,917 | 1,575,517 | ||||||||||||
Sales and marketing | 339,943 | 313,323 | 896,318 | 909,943 | ||||||||||||
Product and technology | 103,581 | 89,005 | 285,051 | 266,999 | ||||||||||||
General and administrative | 208,126 | 130,761 | 547,461 | 427,493 | ||||||||||||
Loss from operations | (298,594 | ) | (286,586 | ) | (469,820 | ) | (745,416 | ) | ||||||||
Other income (expense): | | |||||||||||||||
Interest income | 9,200 | 14,420 | 38,479 | 39,626 | ||||||||||||
Interest expense | (872 | ) | (670 | ) | (2,199 | ) | (1,991 | ) | ||||||||
Gain (loss) on remeasurement of warrant liabilities | 21 | (7,751 | ) | (8,282 | ) | (44,827 | ) | |||||||||
Other (loss) gain, net | (4,620 | ) | (1,217 | ) | (5,801 | ) | (1,153 | ) | ||||||||
Loss before income tax (benefit) provision and loss from equity method investment | (294,865 | ) | (281,804 | ) | (447,623 | ) | (753,761 | ) | ||||||||
Income tax (benefit) provision | (1,287 | ) | 1,291 | (75,208 | ) | 3,310 | ||||||||||
Loss from equity method investment | 110 | 8 | 19 | 450 | ||||||||||||
Net loss attributable to common stockholders | $ | (293,688 | ) | $ | (283,103 | ) | $ | (372,434 | ) | $ | (757,521 | ) | ||||
Loss per share attributable to common stockholders: | ||||||||||||||||
Basic and diluted | $ | (0.60 | ) | $ | (0.61 | ) | $ | (0.78 | ) | $ | (1.64 | ) |
DRAFTKINGS INC. | ||||||||||||||||
NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Amounts in thousands, except per share data) | ||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
Adjusted EBITDA | $ | (58,504 | ) | $ | (153,414 | ) | $ | 91,853 | $ | (302,053 | ) | |||||
Adjusted Earnings (Loss) Per Share | $ | (0.17 | ) | $ | (0.35 | ) | $ | 0.09 | $ | (0.71 | ) |
DRAFTKINGS INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
(Amounts in thousands) | ||||||||
| Nine months ended September 30, | |||||||
| 2024 | 2023 | ||||||
Cash Flows from Operating Activities: | | |||||||
Net loss attributable to common shareholders | $ | (372,434 | ) | $ | (757,521 | ) | ||
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||||||||
Depreciation and amortization | 204,755 | 146,722 | ||||||
Non-cash interest (income) expense, net | 27 | (554 | ) | |||||
Stock-based compensation | 271,307 | 284,946 | ||||||
Loss on remeasurement of warrant liabilities | 8,282 | 44,827 | ||||||
(Gain) loss from equity method investment | 19 | 450 | ||||||
Loss on marketable equity securities and other financial assets, net | — | 75 | ||||||
Loss on sale of Vegas Sports Information Network, LLC | 5,817 | — | ||||||
Deferred income taxes | (80,604 | ) | 4,527 | |||||
Other income (expenses), net | 4,632 | (1,944 | ) | |||||
Change in operating assets and liabilities, net of effect of acquisitions: | ||||||||
Receivables reserved for users | (30,955 | ) | (49,402 | ) | ||||
Accounts receivable | (13,792 | ) | 24,174 | |||||
Prepaid expenses and other current assets | (20,704 | ) | (20,757 | ) | ||||
Deposits and other non-current assets | 446 | (3,983 | ) | |||||
Operating leases, net | 145 | 1,907 | ||||||
Accounts payable and accrued expenses | 44,635 | 79,047 | ||||||
Liabilities to users | 61,839 | 170,161 | ||||||
Long-term income tax liability | 1,025 | (1,605 | ) | |||||
Other long-term liabilities | 8,138 | 5,112 | ||||||
Net cash flows provided by (used in) operating activities | $ | 92,578 | $ | (73,818 | ) | |||
Cash Flows from Investing Activities: | | |||||||
Purchases of property and equipment | (8,148 | ) | (19,885 | ) | ||||
Cash paid for internally developed software costs | (71,059 | ) | (60,006 | ) | ||||
Acquisition of gaming licenses | (14,820 | ) | (10,971 | ) | ||||
Proceeds from marketable equity securities and other financial assets | — | 24,425 | ||||||
Cash paid for acquisition, net of cash acquired | (392,501 | ) | — | |||||
Other investing activities, net | (1,656 | ) | (481 | ) | ||||
Net cash flows used in investing activities | $ | (488,184 | ) | $ | (66,918 | ) | ||
Cash Flow from Financing Activities: | | |||||||
Proceeds from exercise of warrants | — | — | ||||||
Purchase of treasury stock | (78,170 | ) | (59,351 | ) | ||||
Proceeds from exercise of stock options | 6,798 | 8,842 | ||||||
Net cash flows used in financing activities | $ | (71,372 | ) | $ | (50,509 | ) | ||
Net decrease in cash and cash equivalents, restricted cash, and cash reserved for users | (466,978 | ) | (191,245 | ) | ||||
Cash and cash equivalents, restricted cash, and cash reserved for users at the beginning of period | 1,623,493 | 1,778,825 | ||||||
Cash and cash equivalents, restricted cash, and cash reserved for users at the end of period | $ | 1,156,515 | $ | 1,587,580 | ||||
Disclosure of cash and cash equivalents, restricted cash, and cash reserved for users | ||||||||
Cash and cash equivalents | 877,822 | 1,111,596 | ||||||
Restricted cash | 13,807 | — | ||||||
Cash reserved for users | 264,886 | 475,984 | ||||||
Cash and cash equivalents, restricted cash, and cash reserved for users at the end of period | $ | 1,156,515 | $ | 1,587,580 | ||||
Supplemental Disclosure of Noncash Investing and Financing Activities: | ||||||||
Investing activities included in accounts payable and accrued expenses | $ | 1,788 | $ | (408 | ) | |||
Equity consideration issued in connection with acquisitions | $ | 331,557 | $ | — | ||||
Decrease of warrant liabilities from cashless exercise of warrants | $ | 46,416 | $ | 1,812 | ||||
Supplemental Disclosure of Cash Activities: | ||||||||
(Decrease) increase in cash reserved for users | $ | (76,404 | ) | $ | 6,331 |
Non-GAAP Financial Measures
This press release includes Adjusted EBITDA and Adjusted Earnings (Loss) Per Share, which are non-GAAP financial measures that DraftKings uses to supplement its results presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company believes Adjusted EBITDA and Adjusted Earnings (Loss) Per Share are useful in evaluating its operating performance, similar to measures reported by its publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share are not intended to be substitutes for any GAAP financial measures, and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
DraftKings defines and calculates Adjusted EBITDA as net income (loss) before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; and other non-recurring and non-operating costs or income, as described in the reconciliation below.
DraftKings defines and calculates Adjusted Earnings (Loss) Per Share as basic or diluted earnings (loss) per share attributable to common stockholders before the impact of amortization of acquired intangible assets; stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; and other non-recurring and non-operating costs or income, as described in the reconciliation below.
DraftKings includes these non-GAAP financial measures because they are used by management to evaluate the Company’s core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share exclude certain expenses that are required in accordance with GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of amortization of acquired intangible assets, depreciation and amortization, remeasurement of warrant liabilities and stock-based compensation), or non-operating items which are not related to the Company’s underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs).
The unaudited table below presents the Company’s Adjusted EBITDA reconciled to its net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, for the periods indicated:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(amounts in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Net income (loss) | $ | (293,688 | ) | $ | (283,103 | ) | $ | (372,434 | ) | $ | (757,521 | ) | ||||
Adjusted for: | ||||||||||||||||
Depreciation and amortization (1) | 89,952 | 50,245 | 204,755 | 146,722 | ||||||||||||
Interest (income) expense, net | (8,328 | ) | (13,750 | ) | (36,280 | ) | (37,635 | ) | ||||||||
Income tax (benefit) provision (2) | (1,287 | ) | 1,291 | (75,208 | ) | 3,310 | ||||||||||
Stock-based compensation (3) | 87,552 | 78,353 | 271,307 | 284,946 | ||||||||||||
Transaction-related costs (4) | 840 | 681 | 24,333 | 1,106 | ||||||||||||
Litigation, settlement, and related costs (5) | 20,448 | 3,891 | 40,572 | 10,590 | ||||||||||||
Advocacy and other related legal expenses (6) | 6,018 | — | 6,303 | — | ||||||||||||
(Gain) loss on remeasurement of warrant liabilities | (21 | ) | 7,751 | 8,282 | 44,827 | |||||||||||
Other non-recurring costs and non-operating (income) costs (7) | 40,010 | 1,227 | 20,223 | 1,602 | ||||||||||||
Adjusted EBITDA | $ | (58,504 | ) | $ | (153,414 | ) | $ | 91,853 | $ | (302,053 | ) | |||||
_______________________________________ | ||||||||||||||||
(1) The amounts include the amortization of acquired intangible assets of | ||||||||||||||||
(2) The Company recorded a discrete income tax benefit of | ||||||||||||||||
(3) Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans. | ||||||||||||||||
(4) Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with transactions under consideration and pending or completed transactions and offerings, including costs relating to our completed acquisitions of Jackpocket and Sports IQ Analytics Inc. | ||||||||||||||||
(5) Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations. | ||||||||||||||||
(6) Reflects non-recurring and non-ordinary course costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings. This adjustment excludes (i) costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate that are incurred in the ordinary course of business and (ii) costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate. | ||||||||||||||||
(7) Primarily includes the change in fair value of certain financial assets, as well as our equity method share of investee’s losses and other costs relating to non-recurring and non-operating items. For the three and nine months ended September 30, 2024, this amount also includes |
The unaudited table below presents the Company’s Adjusted Earnings (Loss) Per Share reconciled to its basic earnings (loss) per share attributable to common stockholders, which is the most directly comparable financial measure calculated in accordance with GAAP, for the periods indicated:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Basic earnings (loss) per share attributable to common stockholders: | $ | (0.60 | ) | $ | (0.61 | ) | $ | (0.78 | ) | $ | (1.64 | ) | ||||
Adjusted for: | ||||||||||||||||
Amortization of acquired intangible assets | 0.11 | 0.06 | 0.25 | 0.19 | ||||||||||||
Discrete tax benefit attributed to the Jackpocket acquisition (1) | — | — | (0.16 | ) | — | |||||||||||
Stock-based compensation (2) | 0.18 | 0.17 | 0.57 | 0.62 | ||||||||||||
Transaction-related costs (3) | — | — | 0.05 | — | ||||||||||||
Litigation, settlement, and related costs (4) | 0.04 | 0.01 | 0.08 | 0.02 | ||||||||||||
Advocacy and other related legal expenses (5) | 0.01 | — | 0.01 | — | ||||||||||||
(Gain) loss on remeasurement of warrant liabilities | — | 0.02 | 0.02 | 0.10 | ||||||||||||
Other non-recurring costs and non-operating (income) costs (6) | 0.08 | — | 0.04 | — | ||||||||||||
Adjusted Earnings (Loss) Per Share* | $ | (0.17 | ) | $ | (0.35 | ) | $ | 0.09 | $ | (0.71 | ) | |||||
_______________________________________ | ||||||||||||||||
* Weighted average number of shares used to calculate Adjusted Earnings (Loss) Per Share for the third quarter and year to date period ended September 30, 2024 was 486.2 million and 480.0 million, respectively. Totals may not sum due to rounding. | ||||||||||||||||
(1) The Company recorded a discrete income tax benefit of | ||||||||||||||||
(2) Reflects stock-based compensation expenses per share resulting from the issuance of awards under incentive plans. | ||||||||||||||||
(3) Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with transactions under consideration and pending or completed transactions and offerings, including costs relating to our completed acquisitions of Jackpocket and Sports IQ Analytics Inc. | ||||||||||||||||
(4) Primarily reflects external legal costs related to litigation and litigation settlement costs, in each case per share, deemed unrelated to DraftKings’ core business. | ||||||||||||||||
(5) Reflects non-recurring and non-ordinary course costs per share relating to advocacy efforts and other legal expenses in jurisdictions where DraftKings does not operate certain product offerings and is actively seeking licensure, or similar approval, for those product offerings. This adjustment excludes (i) costs relating to advocacy efforts and other legal expenses in jurisdictions where DraftKings does not operate that are incurred in the ordinary course of business and (ii) costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and DraftKings currently operates. | ||||||||||||||||
(6) Primarily includes the change in fair value of certain financial assets, as well as the Company’s equity method share of the investee’s losses and other costs relating to non-recurring and non-operating items, in each case per share. For the three and nine months ended September 30, 2024, this amount also includes |
Information reconciling forward-looking fiscal year 2024 and fiscal year 2025 Adjusted EBITDA guidance to its most directly comparable GAAP financial measure is unavailable to DraftKings without unreasonable effort due to, among other things, certain items required for such reconciliations being outside of DraftKings’ control and/or not being able to be reasonably predicted. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. DraftKings provides a range for its Adjusted EBITDA forecast that it believes will be achieved; however, the Company cannot provide any assurance that it can predict all of the components of the Adjusted EBITDA calculation. DraftKings provides a forecast for Adjusted EBITDA because it believes that Adjusted EBITDA, when viewed with DraftKings’ results calculated in accordance with GAAP, provide useful information for the reasons noted above. However, Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income (loss) or cash flow from operating activities or as indicators of operating performance or liquidity.
About DraftKings
DraftKings Inc. is a digital sports entertainment and gaming company created to be the Ultimate Host and fuel the competitive spirit of sports fans with products that range across daily fantasy, regulated gaming, and digital media. Headquartered in Boston and launched in 2012 by Jason Robins, Matt Kalish and Paul Liberman, DraftKings is the only U.S.-based vertically integrated sports betting operator. DraftKings’ mission is to make life more exciting by responsibly creating the world’s favorite real-money games and betting experiences. DraftKings Sportsbook is live with mobile and/or retail sports betting operations pursuant to regulations in 28 states, Washington, D.C., and in Ontario, Canada. The Company operates iGaming pursuant to regulations in five states and in Ontario, Canada under its DraftKings brand and pursuant to regulations in three states under its Golden Nugget Online Gaming brand. DraftKings owns Jackpocket, the leading digital lottery app in the United States. DraftKings’ daily fantasy sports product is available in 44 states and certain Canadian provinces. DraftKings is both an official daily fantasy and sports betting partner of the NFL, NHL, PGA TOUR, WNBA and UFC, as well as an official daily fantasy partner of NASCAR, an official sports betting partner of the NBA and an authorized gaming operator of MLB. In addition, DraftKings owns and operates DraftKings Network a multi-platform content ecosystem with original programming. DraftKings is committed to being a responsible steward of this new era in real-money gaming with a Company-wide focus on responsible gaming and corporate social responsibility.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements about the Company and its industry that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release, including statements regarding guidance, DraftKings’ future results of operations or financial condition, strategic plans and focus, user growth and engagement, product initiatives, and the objectives and expectations of management for future operations (including launches in new jurisdictions and the expected timing thereof), are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “confident,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “going to,” “intend,” “may,” “plan,” “poised,” “potential,” “predict,” “project,” “propose,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. DraftKings cautions you that the foregoing may not include all of the forward-looking statements made in this press release.
You should not rely on forward-looking statements as predictions of future events. DraftKings has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends, including the current macroeconomic environment, that it believes may affect its business, financial condition, results of operations, and prospects. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside DraftKings’ control and that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include, but are not limited to, DraftKings’ ability to manage growth; DraftKings’ ability to execute its business plan and meet its projections; potential litigation involving DraftKings; changes in applicable laws or regulations, particularly with respect to gaming; general economic and market conditions impacting demand for DraftKings’ products and services; economic and market conditions in the media, entertainment, gaming, and software industries in the markets in which DraftKings operates; market and global conditions and economic factors, as well as the potential impact of general economic conditions, including inflation, rising interest rates and instability in the banking system, on DraftKings’ liquidity, operations and personnel, as well as the risks, uncertainties, and other factors described in “Risk Factors” in DraftKings’ filings with the Securities and Exchange Commission (the “SEC”), which are available on the SEC’s website at www.sec.gov. Additional information will be made available in other filings that DraftKings makes from time to time with the SEC. The forward-looking statements contained herein are based on management’s current expectations and beliefs and speak only as of the date hereof, and DraftKings makes no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations, except as required by law.
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