key point:
Revenue growth:DraftKings Inc. (NASDAQ: DKNG ) announced second-quarter 2024 revenue up 26% to $1.104 billion.
Profitability:The company finally achieved a profitable quarter, announcing a net profit of $63.8 million.
Operating loss:Despite being profitable, DraftKings reported an operating loss of $32.4 million for the quarter.
Stock price falls:Market reaction to the report sent DraftKings shares down about 4%, with shares trading at $35.49 as of this writing.
DraftKings reported revenue growth of 26% to $1.104 billion in the second quarter of 2024, up 26% from the same period last year, and net income of $63.8 million.
The company attributes this growth to increased customer engagement, the expansion of sports betting products into new jurisdictions and the completion of the Jackpocket acquisition in May 2024.
Adjusted EBITDA nearly doubled from $73 million in the second quarter of 2023 to $128 million in the second quarter of 2024, compared to the same period last year.
Despite these gains, the company had an operating loss of $32.4 million for the quarter, reflecting its continued investments in growth and market expansion. However, this loss was a significant decrease of 53% compared to the same period last year, when it suffered a loss of $69 million.
Monthly unique paying users (MUPs) increased to 3.1 million, a 50% increase compared to the same period last year, driven by the strong user acquisition and retention capabilities of the DraftKings platform. Average revenue per unique paying user (ARPMUP) fell 15% to $117, driven primarily by promotional investment in new customers and results that favored punters during the period.
DraftKings also announced a $1 billion stock repurchase program authorized by its board of directors. The program allows the Company to repurchase its Class A common stock through open market purchases and other transactions subject to market conditions.
DraftKings updated its fiscal 2024 revenue guidance, projecting revenue in the range of $5.05 billion to $5.25 billion, reflecting expected year-over-year growth of 38% to 43%. However, the company lowered its adjusted EBITDA guidance to a range of $340 million to $420 million, down from its previous forecast of $460 million to $540 million. The company said the adjustment was due to ongoing investments and changing market dynamics.
The company remains aggressive in expanding its market reach, with its sports betting products now available in 25 states and Washington, D.C., covering 49% of the U.S. population.
Additionally, DraftKings provides iGaming services in five states, representing 11% of the U.S. population, and operates in Ontario, Canada.
DraftKings' future plans include launching its sports betting product in Puerto Rico, subject to regulatory approval. The company is also closely monitoring legislative developments in several U.S. jurisdictions that could legalize mobile sports betting and iGaming, potentially expanding its market reach.
In the first quarter of 2024, DraftKings' revenue grew 53% year-over-year despite an operating loss of $138.8 million. The company also announced a $750 million acquisition of Jackpocket and a partnership with former Penn Entertainment subsidiary Barstool.
