DraftKings (DKNG) Q4 2024 earnings summary

Executive summary

• FY 2024 revenue grew 30% year-over-year to $4.8 billion, with adjusted EBITDA improving by $332 million to $181 million and positive free cash flow for the first time.

• Customer base expanded 42% year-over-year to 10.1 million, with 3.5 million new customers acquired at record-low acquisition costs.

• Strong operating leverage achieved as adjusted operating expenses rose only 5% year-over-year, normalized for acquisitions.

• Positioned for continued growth in 2025, leveraging technology, brand, and customer loyalty, with a focus on live betting and digital lottery.

• Fiscal 2024 marked the first year of positive adjusted EBITDA and initiation of share repurchases.

Financial highlights

• FY 2024 revenue was $4.77 billion, up from $3.67 billion in FY 2023; Q4 2024 revenue was $1.39 billion, up 13% year-over-year.

• FY 2024 adjusted EBITDA was $181 million, a $332 million improvement year-over-year.

• Sportsbook and iGaming handle increased 21% year-over-year; structural sportsbook hold rose to 10.5% for FY 2024 and 11.2% in Q4.

• Free cash flow turned positive in 2024 and is expected to reach $850 million in 2025.

• Q4 2024 adjusted EPS was $0.23, compared to GAAP EPS of ($0.28).

Outlook and guidance

• FY 2025 revenue guidance raised to $6.3–$6.6 billion (midpoint $6.45 billion), representing 32%–38% year-over-year growth.

• Adjusted EBITDA guidance for 2025 reaffirmed at $900 million to $1 billion.

• Adjusted gross margin expected at 46%–47% for 2025, with sportsbook net revenue margin at 7%–7.5%.

• Guidance excludes potential benefits from favorable sports outcomes and new state launches like Missouri.

• Free cash flow expected at approximately $850 million in 2025.