DraftKings Soars on Record Revenue, Net Income, Maintains 2025 Guidance
After the sportsbook behemoth revealed record second-quarter net income and revenue, reversing a four-quarter trend of diminishing monthly unique players (MUPs), shares of DraftKings (NASDAQ: DKNG) surged during Wednesday's after-hours session.
The Boston-based DraftKings reported $1.51 billion in sales for the three months ended June 30, a 37% increase from the previous year, on net income of $158 million and adjusted profits before interest, taxes, depreciation, and amortization (EBITDA) of $301 million, both of which were quarterly records.
"We are pleased to be maintaining our fiscal year 2025 guidance, with revenue expected to be closer to the high end of our range, highlighting the strength of our platform as we prepare for an exciting new state launch (Missouri),” said co-founder and CEO Jason Robins in a statement.
Given that DraftKings has a history of improving its financial forecast when it releases quarterly earnings, the stock's late Wednesday performance is all the more remarkable given that the operator only maintained its 2025 guidance. The company previously stated that it anticipates $6.2 billion to $6.4 billion in revenue and $800 million to $900 million in EBITDA in 2025.
The December introduction of online sports betting in Missouri and the recent tax increases in Illinois, Louisiana, and New Jersey are now included in DraftKings' 2025 forecast.
Additional Highlights of DraftKings Earnings
After a long run of customer-friendly results, DraftKings' fortunes changed in the second quarter, allowing the operator to achieve strong second-quarter earnings alongside competitors BetMGM, Caesars Digital, and Rush Street Interactive (NYSE: RSI).
Other noteworthy findings include the corporation actively repurchasing its own stock and a 16% quarterly increase in live betting volume. The online casino operator repurchased 2.8 million shares during the June quarter, bringing the total number of shares purchased this year to 6.5 million, as part of a $1 billion repurchase plan that was announced a year ago.
With $1.8 billion in debt and $1.3 billion in cash on hand at the end of the quarter, the corporation shows that it has the financial resources to continue improving its products before the crucial football season begins.
“DKNG continues to actively improve its product offering, targeting improvements in live betting, authenticity and community features ahead of the start of NFL & NBA this fall,” said Truist Securities analyst Barry Jonas in a note to clients.
DraftKings Tracks the State of Prediction Markets
DraftKings hasn't given up on the event contracts market despite submitting a related application with the National Futures Association (NFA), according to rumors that circulated last month that the company may be in talks with privately held prediction markets operator Railbird.
Although an agreement with Railbird has not yet been disclosed, DraftKings is closely monitoring the prediction markets sector.
“DKNG continues to monitor news flow around federally regulated prediction market platforms and are actively exploring ways to enhance shareholder value,” adds Jonas. “Management needs to balance relationships with industry stakeholders and policymakers here and will look to work collaboratively in evaluating next steps.”
