DraftKings has cut its fiscal-year revenue guidance by $250 million and its adjusted EBITDA outlook by one-third.
That comes as numerous sportsbooks across the U.S. report taking a big hit from customers in recent weeks, particularly around NFL betting results which have seen a comparative lack of upsets so far this football season.
CEO Jason Robins said on the Q3 earnings call on that, while structural sportsbook hold percentage continued to increase, “the most customer-friendly stretch of NFL sport outcomes we’ve ever seen” early in Q4 prompted a reassessment of the full-year outlook.
“We got stung by sport outcomes,” Robins told investors and analysts.
As a result, the company has reduced its FY revenue projection from the midpoint of $5.15 billion reported on Aug. 1 to $4.9 billion. It also slashed its 2024 adjusted EBITDA expectations by around one-third, from a midpoint of $380 million to $260 million.
The company reported a net income loss of $293.7 million in Q3 2024.
DraftKings revenue continues healthy growth
Still, the sports betting and iGaming giant made $1.1 billion in revenue in Q3 2024, a 39% year-over-year revenue increase. Its online sportsbook GGR increased by 39% and iGaming GGR great 26% year-over-year. DraftKings attributed the jump to strong customer engagement and acquisition, as well as its expanded sports betting operations and other factors, including the effects of its acquisition of Jackpocket.
Robins noted that while customer retention is higher on the sports betting side, between the flagship brand and Golden Nugget, “we think our iGaming app is clear head and shoulders the best product.”
DraftKings will start to break down its net revenue by sports betting and iGaming in early 2025, something Robins said will offer more clarity into performance trends both internally and externally.
DraftKings maintains confidence for 2025
Despite the hit, DraftKings executives insisted they remain confident about 2025.
The company is projecting a 31% year-over-year growth in FY 2025 based on 2024 midpoints and anticipates a revenue range of $6.2 billion to $6.6 billion for the next fiscal year. Adjusted EBITDA for 2025 is expected to be between $900 million and $1 billion.
This does not take into account any boost from Missouri, which legalized sports betting this week and is expected to launch a market in the second half of 2025. DraftKings, along with FanDuel, pumped millions of dollars into the Winning for Missouri Education campaign to urge voters to say yes at the ballot.
Structural sportsbook hold is projected to sit at 11% in FY 2025. Robins suggested on the call that internally, the company is confident it can record a higher number, driven by increased parlay mix and product enhancements. However, DraftKings did not want to commit to that in public projections.
Robins cautiously optimistic on Florida
Meanwhile, Robins was also asked about Hard Rock Chairman Jim Allen’s comments that suggested the Seminole Tribe, which has operational exclusivity in Florida, could look to partner with leading sports betting brands like DraftKings and FanDuel in the Sunshine State.
“Very encouraged to hear those comments,” Robins said. “We’ll see how that all plays out. Obviously, Florida is a big state and something that we’d be very excited if there were a path to be able to offer our product to customers there. But it’s really not up to us.
“If there’s anything material, we’ll talk about it. But at this point, I wouldn’t say it’s very far along… I think it’s a pretty early stage.”
