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DraftKings, a leader in the US sports betting market, on Friday reported a 44% increase in revenue for the fourth quarter of 2023, reaching $1.23 billion up from $855 million in the same quarter of the previous year. This performance prompted the company to update its revenue and EBITDA projections for 2024 upwards, after a year in which its revenue grew by 63% to $3.7 billion. The operational loss for the company decreased significantly in the fourth quarter to $43.8 million from $232.2 million in the fourth quarter of 2022, and adjusted EBITDA turned positive, reaching $151.0 million from a previous negative $49.9 million.
This growth was attributed to “continued healthy customer engagement, efficient acquisition of new customers, expanding the Sportsbook product offering into new jurisdictions, and product innovation leading to an increased parlay mix and thus higher structural sportsbook hold percentage,” according to the company.
Jason Robins, DraftKings’ CEO and Co-founder, remarked, “DraftKings ended 2023 with excellent performance across customer acquisition, retention, and engagement as well as structural sportsbook hold percentage despite the worst stretch of sport outcomes we have seen as a public company in the fourth quarter.”
He further added, “Looking ahead to 2024 and beyond, our focus remains on disciplined execution against our core value drivers, an unwavering commitment to customer centricity, and fulfilling our product roadmap to consistently differentiate ourselves competitively.”
The company saw its monthly unique payers increase to 3.5 million, a 37% rise from the fourth quarter of 2022, with average revenue per user up by 6% to $116. Despite a negative impact on revenue and adjusted EBITDA due to customer-friendly sports outcomes, DraftKings raised its 2024 revenue guidance to a range of $4.65 billion to $4.90 billion from an earlier range of $4.50 billion to $4.80 billion, reflecting a growth of 27% to 34%. The adjusted EBITDA guidance for 2024 was also revised to between $410 million and $510 million.
Jason Park, DraftKings’ CFO, stated, “In 2023 we delivered on our commitments to generate outstanding revenue growth and drive significant operating efficiencies.”
He also noted, “Based on continued strong underlying fundamentals through the first six weeks of 2024 on top of excellent customer acquisition in the fourth quarter, we are raising the midpoint of our fiscal year 2024 revenue guidance range to $4.775 billion from $4.65 billion and the midpoint of our fiscal year 2024 Adjusted EBITDA guidance range to $460 million from $400 million.”
For the full year of 2023, DraftKings reported a 63% increase in revenue, a considerable reduction in operational losses, and a significantly smaller negative adjusted EBITDA compared to the previous year, highlighting the company’s strategic approach to cost management and market expansion.