Total Revenue

+13% (from 1,230,857k USD in Q4 2023 to 1,392,772k USD in Q4 2024)

Total Revenue increased by 13% YoY as DKNG built on its previous period’s momentum by leveraging enhanced product offerings and market expansion efforts. This growth indicates improved customer activity and possibly stronger performance from channels other than online gaming, building on previous gains. " "

Online Gaming Revenue

Declined from 1,203.89m USD in Q4 2023 to 420.8m USD in Q4 2024 (a dramatic reversal, over 100% decline)

Online Gaming revenue experienced a dramatic reversal from the prior period, suggesting a significant reclassification or a shift in channel focus. The sharp decline contrasts with the high figure in the previous period, pointing to potential restructuring of revenue streams or changes in reporting practices that affected this segment. " " "

Cost of Revenue

+16.5% (from 716,658k USD in Q4 2023 to 834,644k USD in Q4 2024)

Cost of Revenue increased by 16.5% YoY due to higher variable expenses tied to greater activity levels and an expanded cost structure from new product lines and market entries. This build‐on the historical trend where revenue mix shifts toward higher cost offerings, thereby putting increased pressure on margins. " "

Operating Loss

Increased from 43,809k USD in Q4 2023 to 139,179k USD in Q4 2024 (widened significantly)

Operating Loss widened significantly as rising operating expenses eroded profitability despite revenue gains. The previous period’s lower operating loss escalated due to both the elevated cost of revenue and higher investments in sales, marketing, and product & technology expense, reflecting deteriorated operational performance in Q4 2024. " "

Sales & Marketing Expense

+27% increase (from 290,775k USD in Q4 2023 to 368,602k USD in Q4 2024)

Sales & Marketing expenses increased by around 27% YoY, driven by higher advertising investments and elevated spend to secure market share. The current period’s increase builds on a trend of heightened customer acquisition efforts and brand campaigns relative to the previous period. " "

Product & Technology Expense

+27% increase (from 88,157k USD in Q4 2023 to 112,063k USD in Q4 2024)

Product & Technology expense increased by about 27% YoY as DKNG expanded headcount and further invested in product innovation and engineering capabilities. This continued focus on technological enhancement, seen in both previous and current periods, underscores the commitment to improve the platform infrastructure and drive future growth. " "

Revenue

FY 2025

$6.2B to $6.6B "

$6.3B to $6.6B "

raised

Adjusted EBITDA

FY 2025

$900 million to $1 billion " "

$900 million to $1 billion "

no change

Adjusted Gross Margin

FY 2025

45% to 47% "

46% to 47% "

raised

Structural Sportsbook Hold Percentage

FY 2025

11% " "

11% "

no change

Stock-Based Compensation Expense

FY 2025

6% of revenue "

6% of revenue "

no change

Free Cash Flow

FY 2025

$850 million with a $100 million bridge "

$850 million "

no change

Bridge between Adjusted EBITDA and Free Cash Flow

FY 2025

$100 million "

$100 million "

no change

Sportsbook Net Revenue Margin

FY 2025

no prior guidance

7% to 7.5% "

no prior guidance

Customer Acquisition & Engagement

In Q1–Q3, DraftKings consistently discussed strong acquisition, low CAC, robust retention and engagement through innovative promotions and cross‐sell strategies ( " " " " " " ).

In Q4, the company exceeded customer acquisition expectations with record low CAC and improved engagement metrics—such as a higher Sportsbook hold and record handle on Super Bowl Sunday ( " " ).

Consistent emphasis with increasingly positive sentiment. The messaging evolved from cautious growth in Q3 to record-breaking performance in Q4, reinforcing its critical impact on the company’s future ( " " " ).

Promotional Spending & Operational Cost Management

Across Q1–Q3, discussions highlighted efficiencies in promotional reinvestment, optimization of marketing spend, and disciplined operational cost management even amid high acquisition spends ( " " " " " ).

Q4 emphasized a meaningful decline in promotional intensity (notably in Illinois), outperforming promotional reinvestment expectations, and sustained efforts to bolster EBITDA margins through cost management ( " " ).

Steady focus with heightened cost discipline. The emphasis remained consistent, though Q4 added nuance by explicitly reducing promo intensity in high-tax regions, underscoring ongoing cost efficiency as a key driver ( " " " ).

Regulatory & Tax Challenges

In Q1–Q3, DraftKings addressed the risks of rising state taxes and the need for mitigation strategies—from discussing potential tax hikes to introducing a gaming tax surcharge and mitigating the Illinois tax impact ( " " " " ).

In Q4, the conversation focused on mitigating higher Illinois taxes through reduced promotions and mentioned state budget and legalization processes, with continued cautious assumptions on tax rates ( " " " ).

Recurring challenge with strategic adaptations. While the regulatory landscape remained a concern, the approach has evolved—focusing more on tactical mitigation in Q4 while continuing to operate under cautious tax assumptions ( " " " ).

Financial Guidance & EBITDA Margin Expansion

Q1–Q3 discussions detailed iterative upward revisions in revenue guidance, margin expansion achievements, and structural improvements (including cost discipline and improved promotional strategies) that boosted EBITDA expectations ( " " " " " " ).

In Q4, DraftKings raised both revenue (to $6.3–6.6B) and adjusted EBITDA guidance (maintaining $900M–$1B), with clear strategic investments (e.g. in live betting) to support long‐term EBITDA margin expansion (targeting close to 30% in the long term) ( " " " ).

Consistent upward guidance with increasing clarity on margin expansion. The narrative remains positive, with Q4 reinforcing guidance improvements and strategic priorities driving margin growth ( " " " ).

Product Innovation & Enhancements

In Q1–Q3, product evolution was a key theme—from launching new gaming titles and proprietary tech enhancements (e.g. cash out for same-game parlay, SGP innovations) to improvements in the user experience and technology stack ( " " " " " " ).

Q4 showcased further innovation with significant live betting enhancements, upgraded NBA offerings, improved in-play betting reliability, and effective integration of Jackpocket into the cross-sell strategy ( " " " ).

Continuous investment with a new emphasis on live betting and integrated product enhancements. The evolution reflects a deepening commitment to innovation as a future growth lever ( " " " ).

Geographic Expansion & State Market Launches

Q1–Q3 discussions covered multiple state launches—successful introductions in Vermont, North Carolina, and ongoing optimism for states like Texas, Georgia, and Florida—as well as improved marketing efficiency due to an expanded state footprint ( " " " " " " ).

In Q4, the focus shifted slightly to an opportunistic view on international expansion while being cautious with new state launches (as seen with uncertainty around Missouri’s launch timing) and maintaining a concentrated U.S. strategy ( " " " ).

Steady expansion with a more measured approach to new market entries. While geographic growth remains a priority, Q4 reflects a more cautious stance on additional launches while leveraging existing footprint efficiently ( " " ).

M&A Integration & Acquisition Challenges

Q1 and Q2 highlighted M&A themes with a focus on high standards for acquisitions, integration efforts, and the strategic incorporation of Jackpocket, though Q3 did not address this topic explicitly ( " " " ).

In Q4, the discussion returned to M&A with the integration of acquisitions like Simple Bet, Sports IQ Analytics, Muster Golf, and continued emphasis on leveraging Jackpocket for cross-selling—while normalizing cost increases from M&A activity ( " " " ).

Sustained focus with effective cost normalization during integrations. Even though Q3 omitted the topic, Q4 reaffirmed its importance with enhanced integration strategies driving long-term benefits ( " " " ).

Live Betting Expansion & ROI Timeline

Prior periods mentioned live betting expansion as part of broader innovation, with Q3 focusing on new product features (e.g., micro-betting) and incremental volume improvements but without a firm ROI timeline; Q2 recognized live betting as a focus without specifics; Q1 mentioned uptime issues affecting live betting ( " " " ).

Q4 provided greater clarity by setting expectations: investments in live betting to be EBITDA neutral in 2025 and EBITDA positive from 2026 onward, alongside an emphasis on capturing increased customer activity (highlighted by strong Super Bowl performance) ( " " " ).

Increased clarity and emphasis on live betting ROI. The topic evolved from general innovation to having defined ROI expectations in Q4, underscoring its growing strategic importance ( " " ).

Revenue Volatility from External Factors

Q1–Q3 discussions touched on external factors such as varying sports outcomes (including customer-friendly results), NBA playoff effects, and regulatory/tax issues that lead to revenue headwinds and volatility, with normalization expected over longer periods ( " " " " " " ).

In Q4, while not addressed explicitly under a dedicated banner, references to structural hold improvements and adjustments for promotional intensity (e.g. in response to Illinois tax changes) indirectly indicate an effort to mitigate revenue volatility caused by external events ( " " " ).

Ongoing concern with a focus on long-term normalization. The company continues to acknowledge external volatility, with messages emphasizing that short-term sports outcomes and tax changes are being managed to smooth revenue trends ( " " ).

Cross-Selling & Multi-Product Strategy

In Q1 and Q2, DraftKings detailed robust cross-selling models—emphasizing the cost efficiency of moving sports betting customers to iGaming and promising enhanced integration via Jackpocket, which was viewed as a major growth lever; Q3 did not mention it specifically ( " " " " " ).

In Q4, the multi-product strategy re-emerged with a focus on Jackpocket’s performance during a major jackpot event and its effective role in cross-selling across sports betting and iGaming products ( " ).

Consistent and effective focus on cross-selling. Though briefly omitted in Q3, Q4 reiterates the importance of integrating products to boost customer lifetime value, underlining its significant future impact ( " " ).