DraftKings Stock Soars on Strong Earnings, Outlook

DraftKings Inc. (DKNG) stock soared in after-hours trading on Thursday, February 13, following the release of its fourth quarter and fiscal year 2024 earnings report. The online sports entertainment and gaming company reported revenue of $1,393 million for the three months ended December 31, 2024, up 13% from the same period in 2023. This strong performance was driven by continued healthy customer engagement, efficient acquisition of new customers, expansion into new jurisdictions, higher structural sportsbook hold percentage, and the impact of the acquisition of Jackpocket Inc. (Jackpocket).



The company also reported a 36% increase in monthly unique paying customers (MUPs) to 4.8 million in the fourth quarter of 2024, reflecting strong unique player acquisition and retention across its Sportsbook and iGaming products. However, average revenue per MUP (ARPMUP) decreased by 16% to $97, primarily due to lower ARPMUP for Jackpocket customers and lower actual Sportsbook hold rates due to customer-friendly sport outcomes.



DraftKings' CEO, Jason Robins, expressed confidence in the company's growth prospects, stating, "We continued to efficiently acquire and engage customers, expand structural sportsbook hold percentage and optimize promotional reinvestment in fiscal year 2024, while we simultaneously experienced customer-friendly sport outcomes. Looking ahead to 2025 and beyond, I am excited to further enhance our customer economics through new initiatives such as extending our lead in live betting and advancing cross sell efforts to and from new verticals. Our focus remains on driving sustainable growth in revenue and profitability."



The company raised the midpoint of its fiscal year 2025 revenue guidance to $6.45 billion from $6.4 billion, signaling confidence in its growth trajectory. DraftKings also reaffirmed its fiscal year 2025 Adjusted EBITDA guidance of $900 million to $1.0 billion. The company's strong earnings and outlook have analysts optimistic about its future prospects, with many maintaining a "Strong Buy" rating on the stock.



In conclusion, DraftKings' strong earnings report and positive outlook have driven its stock price higher in after-hours trading. The company's continued customer acquisition growth, retention strategies, and expansion into new verticals and jurisdictions position it well for future growth. Investors should closely monitor DraftKings' stock performance and consider adding it to their portfolios, given its strong financial performance and growth prospects.