In Q1, DraftKings reveals a positive earnings per share, further raising its 2024 estimates.
In the first quarter of 2024, DraftKings (NASDAQ: DKNG) announced unexpected earnings per share (EPS) profits, while also raising their 2024 revenue projections for the second time this year. According to non-generally accepted accounting principles (non-GAAP), DraftKings earned three cents a share on sales of $1.18 billion, surpassing analysts' forecast of a loss of 11 cents a share on $1.174 billion in revenue.
The company's 2024 revenue guidance was adjusted to $4.9 billion, up from the previous guidance of $4.775 billion, surpassing the consensus estimate of $4.82 billion. DraftKings cited a strong start in 2024 and expectations of increased customer acquisition and engagement throughout the year. The updated earnings before interest, taxes, depreciation, and amortization (EBITDA) midpoint forecast was also raised to $500 million, up from $460 million.
DraftKings' chief financial officer, Alan Ellingson, anticipates the EBITDA flow-through margin could surpass 50% in 2024 due to improving gross margins and cost-cutting measures. The company finished the quarter with $1.19 billion in cash and cash equivalents, down from $1.27 billion at the end of 2023. Total liabilities were also reduced to $2.96 billion from $3.10 billion.
Increase in Players and Spending
DraftKings experienced significant growth in both iGaming and sports wagering. In the first quarter, monthly unique players (MUPs) reached 3.4 million, representing a 23% increase compared to the same period in 2023. The firm's statement underscored that MUPs are also wagering more, with an average revenue per MUP (ARPMUP) of $114, representing a 25% jump from 2023. This increase in ARPMUP was attributed to an increase in the company's sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming.
Market Share Gains and Brand Value
With these results, DraftKings' stock has soared 22% year-to-date and 95.32% over the past year, making it one of the top-performing gaming equities in these timeframes. The company is gaining market share in large states like Michigan and Pennsylvania. Its brand value is also high, and its mobile application is widely loved among bettors due to its technological investments.
Future Prospects
Although it appears unlikely that any noteworthy states will introduce iGaming or online sports betting in the remaining four months of 2024, DraftKings highlighted that 11 states have introduced sports betting bills and another five considered internet casino legislation. As for new regional launches, the company expects to debut in Puerto Rico in 2024.
DraftKings is now live with mobile sports betting in 25 states, representing approximately 49% of the US population. In addition to these states, the company offers iGaming services in five states and sports wagering in Ontario, Canada.
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Source: www.casino.org
