DraftKings has posted an 84% revenue hike to $770 million in the first quarter of the year, which the US sports betting giant says has been driven by efficient acquisition of new customers, product innovation leading to a higher hold percentage and decreased promotional intensity in more mature states.
Following the positive results, the business has now raised its 2023 revenue guidance to a range of $3.13 billion to $3.23 billion and a midpoint of $3.18 billion, up from a previously announced range of $2.85 billion to $3.05 billion. The updated 2023 revenue guidance range equates to year-over-year growth of 40% to 44%.
“DraftKings’ first quarter performance – 84% year-over-year revenue growth and share gains underpinned by a relentless focus on operational efficiency – demonstrates that this is a company positioned for sustained success,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder.
Jason Robins
“We delivered highly successful online sportsbook launches in Ohio and our home state of Massachusetts and continued to create meaningful product differentiation driven by in-house innovations,” the CEO added. “We acquired customers faster and more efficiently and, importantly, saw healthy retention across cohorts.”
Looking at the remainder of 2023, Robins said he is “confident” DraftKings is well-positioned to achieve profitability on an Adjusted EBITDA basis “in the near-term” and deliver long-term value for its shareholders. The business now expects to be approximately breakeven on an Adjusted EBITDA basis in the second quarter of the year.
“Strong execution across the organization is showing up in our results,” added Jason Park, DraftKings’ Chief Financial Officer. “Revenue grew at a healthy rate due to core drivers around customer acquisition, retention and monetization, including decreased promotional intensity and higher structural hold.”
During the quarter, Monthly Unique Payers (MUPs) increased to 2.8 million representing an increase of 39% compared to the first quarter of 2022. This increase reflects strong unique payer retention and acquisition across DraftKings’ Sportsbook and iGaming products as well as the expansion of said products into new jurisdictions, noted the company.
Average Revenue per MUP (ARPMUP) came in at $92 in the first quarter of 2023, representing a 35% jump compared to the same period in 2022. This increase was primarily attributed to improvement in the company’s structural sportsbook hold rate and reduced promotional intensity.
Additionally, the firm is now also improving its fiscal year 2023 Adjusted EBITDA guidance. The company now expects fiscal year 2023 Adjusted EBITDA of between a $290 million loss and a $340 million loss compared to its prior fiscal year 2023 Adjusted EBITDA guidance of between a $350 million loss and a $450 million loss, previously announced in February.
DraftKings is now live with mobile sports betting in 21 states, which collectively represents approximately 44% of the U.S. population following the launch of its online product in Massachusetts in March. DraftKings is also live with iGaming in 5 states, approximately 11% of the U.S. population; and has sports betting and iGaming products in Ontario, Canada.
Looking forward, the firm said it expects to launch its sportsbook product in Kentucky and Puerto Rico, which have recently authorized mobile sports betting, pending licensure and regulatory approvals.
See DraftKings’ full Q1 report here.
Original article: https://www.yogonet.com/international/news/2023/05/05/67044-draftkings-raises-fy23-guidance-following-84-revenue-jump-in-q1
