DraftKings recorded nearly $4.8bn in 2024 revenue; achieves first positive adjusted EBITDA

DraftKings has reported its Q4 and FY 2024 results, with nearly $4.8bn of total revenue generated across the year, a 30.1% year-on-year (YoY) increase.

The revenue increase is accompanied by a 36.8% reduction in net losses, taking the figure from $802.3m in 2023 to $507.3m in 2024. 

This has resulted in the company’s first positive adjusted EBITDA, which reached $181.3m for the year compared to a $151m adjusted EBITDA loss in 2023. However, the company still recorded significant losses from operations, with $609m attributed to this, down by $180m from 2023. 

Cost of revenue increased by over $650m. In the company’s reporting, this was attributed to higher spending on sales and marketing, product and technology, and general and administrative. These rising expenses were offset by the revenue increase.

DraftKing’s Q4 results are somewhat in contrast to the year overall. Net losses for the quarter rose over 200% to $139.2m, while revenue was only up by 13.2% to $1.4bn for the quarter. This was chalked up to increased operational expenses and a decline in interest income. Cost of revenue for Q4 spiked by around $118m, while sales and marketing expenses rose by over $77m. This resulted in adjusted EBITDA for Q4 dropping by 40.8% to $89.5m.

Until the drop-off in Q4, DraftKings had posted three consecutive quarters of over $1bn of revenue. In Q3, revenue grew by 39% to $1.1bn, which was sustained into Q4. However, the increased losses had a big impact on the overall Q4 performance. Q3 also saw an increase in net losses by $12m to $298.6m and the cost of revenue also went up by nearly $200m. General and administrative costs surged 59.2% to $208.1m and product and technology costs increased 16.4% to $103.6m.  

Although profitability was affected by these rising expenses, monthly unique players (MUPs) went up by 55%, which is partly attributable to the company’s acquisition of the digital lottery app Jackpocket.

DraftKings stated its FY2025 revenue guidance is between $6.3bn and $6.6bn, which would be around a 35% increase from 2024. The company also predicts adjusted EBITDA for next year to range between $900m and $1bn.

The operator will continue to consider market expansion with plans to enter Missouri following the legalization of sports betting in the state. They are also preparing to launch its sportsbook product in Puerto Rico, pending regulatory approval.