DraftKings Announces Impressive Year-Over-Year Revenue Increase

DraftKings shared a mixed bag of news on its Friday morning Q1 earnings call, but most notable was a 20% revenue increase from the first quarter of 2024 to the first quarter of 2025.

March Sadness

The house may always win, but it doesn’t always win a lot. Such was the case during this year’s March Madness tournament, in which four No. 1 seeds all advanced to the Final Four. Understanding the public’s penchant for betting on favorites, it’s unsurprising that mobile sportsbooks throughout the industry were adversely impacted by “customer-friendly” outcomes in one of the year’s most highly wagered sporting events.

However, high seeds winning at a record 82% rate throughout the men’s national college basketball tournament is an aberration and an anomaly unlikely to be replicated next year. But this year, the books took it on the chin, and DraftKings was no exception to the rule.

Strong Revenue Growth

Nevertheless, DraftKings’ revenue soared to $1.41 billion in the first quarter, which was a 20% year-over-year increase from the $1.18 billion in Q1 2024. The call also highlighted Q1’s 4.3 million average monthly unique paying customers, representing a 28% increase compared to the first quarter of 2024.

“Recent product enhancements are driving outperformance in our core value drivers, and our customer metrics continue to be strong through an evolving macroeconomic environment,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “If not for customer-friendly sport outcomes in March, we would be raising our fiscal year 2025 revenue and Adjusted EBITDA guidance.”

“We have a healthy balance sheet and repurchased 3.7 million shares in the first quarter under our existing stock repurchase program,” said Alan Ellingson, DraftKings’ Chief Financial Officer.

Due to the strong financial headwinds suffered in March, DraftKings felt it was prudent to decrease its guidance from between $6.3 billion and $6.6 billion to $6.2 billion and $6.4 billion. EBITDA guidance was also lowered from $900 million to $1 billion to between $800 million and $900 million.

Looking Ahead

Some of the positive takeaways from the earnings call included the following:

• DraftKings is live with mobile sports betting in 25 US states and Washington, D.C., which collectively represent approximately 49% of the U.S. population.
• DraftKings is also live with iGaming in 5 states, representing approximately 11% of the U.S. population.
• DraftKings is live with its Sportsbook and iGaming products in Ontario, Canada, which represents approximately 40% of Canada’s population.
• In February, DraftKings set the U.S. record for the largest online jackpot prize when its jackpot hit for $9.3 million on a 20-cent wager.

A new mobile sports betting market is opening this year in the Show Me State, and DraftKings expects to have a seat at the table as one of up to 14 operators on day one of the launch. Missouri’s mobile sportsbooks are expected to go live in September or October of this year.

The earnings call also emphasized DraftKings’ increasing reliance on AI to produce greater speed, efficiency, and a wider scale across all platforms.

The company has also stressed the importance of the responsible gaming tools it has integrated into its system. My Stat Sheet is one such tool used by half of their customers that allows tailored insights into a bettor’s gambling activity and habits.