DraftKings revises FY 2025 guidance on sports results despite Q1 revenue growth 

DraftKings has reported revenue of $1.4bn (£1.1bn) for the opening quarter of 2025, as management cited healthy customer engagement and increased hold as two key factors behind the 20% year-on-year (YoY) rise. 

The operator’s topline figure represented a significant $234m increase when compared to its performance in Q1 2024, when DraftKings generated $1.1bn. 

As well as the factors mentioned, DraftKings bosses also hailed its “efficient” approach to acquiring new customers, as well as the impact of its purchase of lottery courier firm Jackpocket for $750m in February 2024. 

At the time of that acquisition, management championed Jackpocket’s ability to significantly lower customer acquisition costs.

The Boston-based company produced a notable climb in adjusted EBITDA, rising to $103m this quarter, marking a YoY surge of more than 300% when pitted against Q1 2024’s total of $22m. 

DraftKings’ monthly unique players (MUPs) rose 28% YoY to 4.3 million in the opening three months of the year, with the increase a testament to the company’s “strong unique payer retention and acquisition” across both its sportsbook and igaming verticals, according to bosses. 

The acquisition of Jackpocket also played its part in the MUP increase, as excluding the lottery courier firm, the rise only sat at 11%. 

However, there was a marginal slump in average revenue per monthly unique player (ARPMUP), falling 5% YoY to $108 in Q1 2025, a decline caused by mostly lower ARPMUP from Jackpocket customers. 

Excluding the recently acquired business, ARPMUP actually ticked upwards by 7% YoY. 

Breaking the operator’s revenue down by vertical, its sportsbook division contributed the lion’s share, generating $882m within the reporting period, a climb of 20% YoY, alongside a corresponding net revenue margin of 6.4%. 

This was despite a series of customer-friendly sports outcomes, including March Madness, which was cited by rival operator Flutter earlier this week as a blow.

Sportsbook handle totalled $13.9bn for the quarter, a figure deemed “strong and consistent with expectations”, as per DraftKings’ shareholder note, while actual hold percentage sat at 9.5%. 

The operator’s igaming segment continued to report growth on a YoY basis, with the vertical producing $423.5m in revenue in Q1, a rise of 14.5% compared to the opening quarter of 2024. 

Despite the growth in both sports betting and igaming revenue, DraftKings confirmed it is revising its fiscal year guidance for 2025, with the operator now expecting to generate group-wide revenue between $6.2bn and $6.4bn. 

Those recent estimates are slightly lower than previously issued guidance of $6.3bn to $6.6bn, released in February.

The revised forecast stems from Maryland’s sports betting tax increase, as well as regulatory scrutiny on the lottery courier sector prompting Jackpocket to shutter its operations in Texas and New Mexico, costing the company $30m in revenue. 

DraftKings’ adjusted EBITDA total for the fiscal year was also revised, with management now expecting the metric to land between $800m and $900m, down from previous guidance of $900m to $1bn. 

Currently, DraftKings’ online sports betting offering is accessible in 25 US states plus Washington DC, giving the operator the potential to engage with around 49% of the nation’s population. 

The company expects to establish online sportsbook operations in Missouri “pending market access, licensure, regulatory approvals and contractual approvals”.

The igaming arm has a presence in five US states, translating to 11% of the population. 

The post DraftKings revises FY 2025 guidance on sports results despite Q1 revenue growth  first appeared on EGR Intel.

 Operator giant reduces its earnings expectations for the year after customer-friendly sporting outcomes hinder gains made elsewhere
The post DraftKings revises FY 2025 guidance on sports results despite Q1 revenue growth  first appeared on EGR Intel.