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DraftKings Stock Soars in Q3 – Year End Targets Rise
DraftKings is seeing big revenue gains after posting its 2023 third-quarter earnings report on November 2, shortly before it announces its new sports betting product at its upcoming Investor Day on November 14.
The online gaming provider reported it was at the top in combined iGaming and sports betting market share during the quarter, partly due to having higher customer retention than anticipated.
DraftKings Kentucky also launched in the third quarter, where about 5% of adults 21 or older have a DraftKings account.
DraftKings Sportsbook markets now cover about 45% of the US adult population and have online casino platforms available in five states, representing about 11% of all adults in the country.
DraftKings reported $789.9 million in revenue in Q3 2023, beating consensus analyst estimates by 12%, a 57% increase year-over-year. The company had a loss of $0.61 per share, which beat Wall Street estimates of $0.70 per share. The stock market reacted positively to the company’s third-quarter earnings as it reached a new 52-week high of $33.75 a share, a daily increase of 16.5%.
“Our fantastic third quarter results demonstrate the positive impact of our product and technology investments as well as excellent preparation and execution by our entire organization,” said Robins.
It also has decreased marketing costs in states where it launched prior to 2021 by “a double-digit rate,” according to CEO Jason Robins. Unique players each month rose 40% year-over-year to 2.3 million, with the provider adding three more betting markets in Ohio, Massachusetts, and Maryland. The average revenue per monthly unique player (MUP) in the third quarter was $114, an increase of 14% year-over-year.
DraftKings Raises Year-End Targets
DraftKings’ healthy quarterly growth has prompted the company to raise its revenue guidance targets for all of 2023 from $3.46 to $3.54 billion to a new mark ranging from $3.67 billion to $3.72 billion, which suggests a 64% to 66% year-over-year increase.
Earnings before interest, taxes, depreciation and amortization (EBITDA) losses expected have been adjusted to $105 million at the guidance range midpoint, a $100 million increase over the last guidance estimate, and $420 million off the first 2023 guidance midpoint.
DraftKings Forecast for 2024 and Beyond
DraftKings’ adjusted EBITDA revenue guidance for fiscal year 2024 is estimated at $4.5 to $4.8 billion, a 25% year-over-year increase at the midpoint range. The adjusted 2024 EBITDA guidance profit is from $350 million to $450 million, which includes revenue anticipated from upcoming launches in Maine, Vermont, North Carolina and Puerto Rico in the coming months.