Thanks to strong launches in Massachusetts and Ohio, DraftKings outpaced revenue projections for Q1 of 2023. The company noted in its earnings release that increased hold and productive customer acquisition were the key drivers behind the successful performance.
Here is a look at the top-line numbers from DraftKings:
Revenue: $770 million, up 84.5% YoY
Net loss: $397 million, down 15% YoY
Adjusted EBITDA: ($221.6 million), down 23.5% YoY
Monthly unique payers: 2.8 million, up 39% YoY
“DraftKings’ first quarter performance – 84% year-over-year revenue growth and share gains underpinned by a relentless focus on operational efficiency – demonstrates that this is a company positioned for sustained success,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “We delivered highly successful online sportsbook launches in Ohio and our home state of Massachusetts and continued to create meaningful product differentiation driven by in-house innovations. We acquired customers faster and more efficiently and, importantly, saw healthy retention across cohorts. Looking at the remainder of 2023, I am confident DraftKings is well-positioned to achieve profitability on an Adjusted EBITDA basis in the near-term and deliver long-term value for our shareholders.”
Given the strong quarter, DraftKings updated guidance for the year, upping revenue guidance to $3.1-$3.2 billion from $2.9-$3.1 billion. The company also reduced expected adjusted EBITDA losses from $350-$450 million losses to $290-$340 million.
Unlike many competitors who expect profitability in 2023, Robins was clear that the path to profitability is getting shorter, but is still a couple of years away for the organization. However, he did say Q2 should be close to break-even this year and Q4 would potentially be profitable.
The company also noted that year-over-year numbers were dramatic in part because of the large expenditures of Louisiana and New York launches in 2022.
Robins repeatedly noted the tech advances the company made in the quarter, including improved app functionality and in-game same game parlays. DraftKings Sportsbook also acquired 57% more first-time players than Q1 2022.
Robins also announced that the company overtook BetMGM for online casino market share in the first quarter, though the BetMGM earnings call claimed the company was still tops.
While many competitors discussed significantly decreasing marketing spend, DraftKings is still expending quite a bit on sales and marketing. The group posted $389 million in sales and marketing costs, which is an increase from the $321 million spent in 2022.