DraftKings Raises 2025 Guidance as Q4 Earnings Top Estimates

• A positive EBITA outlook saw DraftKings shares surge in after-hours trading on Thursday
• The increase came after the company increased its topline growth forecast for 2025
• DraftKings offers mobile sports wagering in 25 states and Washington, DC

Shares of DraftKings (NASDAQ: DKNG) surged in Thursday’s after-hours session after the sportsbook operator boosted its 2025 and revenue guidance while reaffirming an earnings before interest, taxes, depreciation, and amortization (EBITDA) estimate of $900 million to $1 billion.

The EBITDA outlook is the same as what the operator unveiled last November, but the topline forecast of $6.3 billion to $6.6 billion is slightly above the $6.2 billion to $6.6 billion the company announced last November. Boston-based DraftKings said those estimates don’t “include the benefit of year-to-date sport outcomes” nor do the numbers account for the addition of Missouri to the sports betting fray at some point this year.

Looking ahead to 2025 and beyond, I am excited to further enhance our customer economics through new initiatives such as extending our lead in live betting and advancing cross sell efforts to and from new verticals,” said CEO and co-founder Jason Robins in a statement. “Our focus remains on driving sustainable growth in revenue and profitability.”

DraftKings currently offers mobile sports wagering in 25 states and Washington, DC, reaching nearly half the US adult population. Missouri and Puerto Rico are expected to join that list in the future. Its internet casino penetration consists of five states equating to 11% of Americans of legal wagering age.

DraftKings Q4 Results Solid Despite NFL Challenges

The 2024 NFL season, which ended with Sunday’s Super Bowl, was a challenge for sportsbook operators, including DraftKings, with several companies noting customer-friendly outcomes weighing on third-quarter results — a theme that lingered into the October through December period.

“We continued to efficiently acquire and engage customers, expand structural sportsbook hold percentage and optimize promotional reinvestment in fiscal year 2024, while we simultaneously experienced customer-friendly sport outcomes,” added Robins in the statement.

Jackpocket, which DraftKings bought last May, is seen as the reason why DraftKings’ fourth-quarter average revenue per monthly unique paying (ARPMUP) customer slid 16% to $97 in December, missing analysts’ estimate of $197.84. The reason is simple: lottery customers spend less than DraftKings’ iGaming and sports betting clients.

DraftKings Balance Sheet Solid

Last year marked the first time DraftKings notched positive adjusted EBITDA on an annual basis, and CFO Alan Ellingson noted the operator sees “strong underlying health across our core value drivers.”

The company concluded the year with cash and cash equivalents of $788.28 million, down from $1.27 billion a year earlier, and restricted cash of $16.49 million, up from $11.70 million.