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DraftKings has upgraded its earnings guidance for the full-year 2024 alongside the release of its Q4 2023 results, despite having missed its previously issued EBITDA target for the quarter.

Q4 results

The business generated revenue of $1.23bn in Q4 2023, an increase of 43.9% year-on-year.

The operator said the revenue rise was driven by “​​continued healthy customer engagement, efficient acquisition of new customers, the expansion of the company’s sportsbook product offering into new jurisdictions, and product innovation leading to increased parlay mix and thus higher structural sportsbook hold percentage.”

Alongside the revenue rise, however, DraftKings also experienced higher costs than in the prior year, as the cost of revenue ($716.7m), product and technology ($88.2m) and general and administrative expenses ($179.1m) all came in higher than in Q4 2022.

Sales and marketing expenses dropped from $345.3m to $290.8m as DraftKings continued to reduce its costs in this area.

Still, costs continued to outweigh revenue for the business, leaving it with a loss from operations of $43.8m. That still represented a significant improvement over Q4 2022, when it registered a loss from operations of $232.2m.

After accounting for other income and expenses, the business declared a net loss of $44.6m for the quarter, down from a $242.7m net loss in the prior year.

DraftKings did, however, declare a positive EBITDA figure of $151m, compared to an EBITDA loss of $49.9m the year before.

That figure came in below previously issued guidance, which pointed to EBITDA for the quarter between $187m and $207m.

The miss followed on from a series of adverse sporting results affecting operators across the market in Q4.

Full-year 2023

Those figures brought total revenue for the full-year 2023 to $3.67bn, up 63.6% on the $2.24bn revenue the business declared in 2022.

Loss from operations for the full year came down from $1.51bn in 2022 to $789.2m in 2023, while the firm’s reported EBITDA loss fell from $721.8m to $151m.

Net loss for the year came in at $802.1m, down from $1.38bn in 2022.

As at the end of 2023, the business held cash and cash equivalents of around $1.62bn.

2024 outlook

Following the release of its results, DraftKings upgraded previously issued guidance on its earnings for 2024.

Previously, the business pointed to full-year revenue within a range of $4.5bn-$4.8bn. Now, it expects revenue to fall between $4.65bn and $4.9bn.

The firm also adjusted its 2024 EBITDA guidance, from a range of $350m-$450m to a new range of $410m-$510m.

The earnings guidance accounts for the company’s upcoming launch in North Carolina, but excludes the impact of its proposed acquisition of Jackpocket, announced today.

“DraftKings ended 2023 with excellent performance across customer acquisition, retention and engagement, as well as structural sportsbook hold percentage despite the worst stretch of sport outcomes we have seen as a public company in the fourth quarter,” said DraftKings CEO Jason Robins.

“Looking ahead to 2024 and beyond, our focus remains on disciplined execution against our core value drivers, an unwavering commitment to customer centricity, and fulfilling our product roadmap to consistently differentiate ourselves competitively.”

Elsewhere, DraftKings today announced the $750m acquisition of lottery and jackpot business Jackpocket.

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