DraftKings Earnings Preview: Customer Growth Expected to Continue

Written By

Updated on


DraftKings quarterly earnings results could be the catalyst it needs to return its stock to the positive momentum it has seen for much of this calendar year.

DKNG is up 21% since January, closing at $41.87 per share Wednesday afternoon. 2024 has been largely a success story for the stock. However, DKNG is coming off by far its worst month yet, dropping by 7.5% in April.

Fortunately for DraftKings, it reports quarterly earnings on Thursday and in the day following those reports, its stock has closed higher in six of the last eight quarters. Meanwhile, Wall Street is expecting $1.12 billion in revenue, a 45.5% increase year-over-year, along with quarterly earnings per share of -$0.11, up 78.4% year-over-year.

Will DraftKings make good on lofty goals?

The last time DraftKings reported earnings, it raised EBITDA guidance for 2024 to $460 million, up from $400 million, sending a strong message about the trading already underway during Q1.

At the time, it attributed the increase to “ahead-of-schedule” improvements in customer metrics like acquisition and retention and better overall structural hold.

How many customers did DraftKings add?

Consensus estimates have faith in DraftKings continuing the customer growth it showcased in Q4 when it increased monthly unique players by 37% year-over-year to 3.5 million.

With the launch of North Carolina sports betting, Vermont sports betting, the Super Bowl and March Madness, investors should be keen to follow just how far that number rose in Q1.

Who bears brunt of busy calendar, bad results?

Investors will also be keen on how much those events dragged down the company’s bottom line. Promos associated with marquee sporting events are typically high, as they are with new state launches, but the outcomes of those events were notably bad for sportsbooks this year.

Heavy traffic on prop bets and same-game parlays anchored DraftKings to a profitable Super Bowl despite the majority of bets and handle coming in on the favorites and eventual champions, the Kansas City Chiefs. Q1 results could further showcase how those types of bets can help better reduce DraftKings’ risk profile.

So far, other companies, like Caesars, have reported strong sports betting holds and EBITDA despite the notably bad quarter of sports results.

More details on Jackpocket strategy?

CEO Jason Robins should also touch on the company’s acquisition of Jackpocket when speaking to customer growth metrics going forward.

Specific details regarding DraftKings plans for the online lottery retailer have been scant since it announced the $750 million acquisition in February.

However, the move has emerged as a focal point for analysts, envisioning avenues for the company to cross-sell more products into its core customer base and reach non-DraftKings users in states without sports betting, especially with management touting customer acquisition costs over 80% more efficient than its core company’s own.