FanDuel Breaks 1 Million Paid Actives In Q4, Claims 80% Market Share

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FanDuel Financial Info

Leading one-day fantasy sports site FanDuel has released their financial information for the fourth quarter of 2014.

FanDuel’s topline numbers for Q4

FanDuel releases four key metrics on their investor page:

A few other important metrics emerge from those four:

Here’s a spreadsheet we made with a few additional metrics and growth numbers.

Putting some context to the numbers

The big question: is one-day fantasy sports displaying growth rates commensurate with a market expected to grow into the billions by decade’s end?


User growth impresses

A clear bright spot for FanDuel in 2014: growth in paid active players per quarter.

FanDuel Paid Actives

Critically, FanDuel put up big percentage gains here even when the absolute numbers involved got larger:

Revenue trajectory looks on track

The chart for revenue growth looks relatively similar:

FanDuel Revenue Chart

(The predictable (and increasingly severe) dips are due to the fact that DFS activity is heavily concentrated around the NFL season.)

FanDuel’s total revenues for 2014 came in at ~$57mm – actually a bit below the $60mm FanDuel projected.

Note that the company offered the $60mm projection for 2014 in the fall of 2014.

The miss could be read as suggesting that, for all of the staggering stats, the fourth quarter was actually something of a disappointment for FanDuel.

But in any case, the growth is there and it’s obvious.

Revenue per user cuts both ways

One chart that doesn’t fit in with the theme of unrestrained growth: average revenue per user.

There, FanDuel saw a rare decline, shaving off about 5% year over year, or roughly $2 per active paying user.

That continues a trend from 3Q14, where FanDuel suffered a nearly 15% drop year-over-year.

And that drop took place in the context of an increasing effective rake (or “hold”):

So even as FanDuel’s rake has effectively increased, the amount they’re making per paying user has decreased.

But the decline in revenue per user can also be read as a positive – at least for now:

That’s true – but only to a point. Eilers’ forecasts for the industry require some upward movement (quite a bit for the bull case) in player values to achieve.

Here’s a spreadsheet where you can dig a bit deeper into the numbers.

The caveat in the room

The important thing to note for both active user and revenue growth is that we’re not talking about a purely organic – or necessarily a sustainable – phenomenon here.


FanDuel’s market share estimate increased to 80%

The FanDuel investor page now estimates FanDuel’s DFS market share to be 80%.

The company does not articulate their methodology for determining market share.

Previous iterations of the page (retrieved on July 3rd, 2014) estimated the company’s market share at 65%. In a presentation given by the company, FanDuel’s market share in December 2013 was pegged at 75%.

DraftKings numbers complicate the claim

Unlike FanDuel, DraftKings does not publicly release much in the way of financial information.

But a site spokesperson told Ben Fischer at NY Business Journal that DraftKings cleared “about $30mm” in revenue during 2014 and had “350,000 monthly active paid users in the fourth quarter.”

FanDuel booked a hair over $57mm total in 2014 revenue. Based on that metric, the market share split starts to look more like 65/35.

Based on paid active users as reported by both companies for Q4, the split looks closer to 75/25.