DraftKings (DKNG) Morgan Stanley Technology, Media & Telecom Conference summary

Business performance and growth targets

• Revenue has grown at over 50% CAGR in the past three years, with EBITDA moving from a $700M loss to a $1B target for this year.

• By 2028, the company projects $2.1B in EBITDA from existing states and is currently ahead of schedule on revenue growth.

• Customer acquisition and efficiency in CAC reached record levels last year, with continued strong performance in both new and existing states.

• Hold rate improvements and favorable bet mix, especially in NFL and NBA, have contributed to exceeding growth projections.

• 2025 targets include $6.45B in revenue and $900M in EBITDA, driven by handle growth, customer acquisition, hold rate, and promotional strategies.

Product innovation and customer engagement

• Live betting now accounts for about 50% of sports volume, with acquisitions like Simplebet enhancing offerings.

• Live betting is seen as incremental to business, with little evidence of cannibalization and a slightly lower hold rate.

• Product focus areas include live betting, parlay innovation, merchandising, CRM, and AI-driven personalization.

• AI is being leveraged across engineering, customer service, and personalization, with significant productivity gains.

• iGaming product leads the market, with over 20% growth and half of volume on proprietary content, emphasizing stability and personalization.

Market trends, regulatory environment, and expansion

• Handle growth is accelerating in Q1, attributed to increased sports interest and NBA ratings.

• Retention rates are strong, with over 100% year-over-year handle and revenue retention on existing cohorts.

• Tax increases have been limited to a few states, with most maintaining stable rates; iGaming legislative momentum is building.

• International expansion is considered opportunistically, with a focus on U.S. and Canada for near-term growth.

• Prediction markets are viewed as an opportunity, pending regulatory decisions expected in mid-April.