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The No. 23 DraftKings Toyota is seen during the DraftKings First Bet in North Carolina, as we look at the DraftKings Q1 earnings report for 2024.
The No. 23 DraftKings Toyota is seen during the DraftKings First Bet in North Carolina at NASCAR Hall of Fame on March 11, 2024 in Charlotte, North Carolina. Photo by Jared C. Tilton/Getty Images via AFP.

DraftKings is out with its first quarter earnings report, and it's mostly good news for one of the best sports betting sites in the U.S. market across a three-month period that included the Super Bowl and March Madness.

The Boston-based sports betting provider joined the rest of our best sports betting apps with a tough draw against the legal sports betting public during the two biggest sporting events on American soil. Yet DraftKings' revenues remained high according to its Q1 earnings report released Thursday.

The company touted its "healthy customer engagement, efficient acquisition of new customers, the expansion of the Company’s Sportsbook product offering into new jurisdictions, higher structural sportsbook hold percentage, and improved promotional reinvestment for Sportsbook and iGaming" for the positive financial data from the Q1 report.

The launch of North Carolina sports betting in March made DraftKings' sports betting product available in 25 states, covering nearly half of the U.S. population. It's no surprise to see one of the market leaders emerge as one of the top-performing North Carolina sports betting apps in its first month of operation.

Its iGaming product is available in five states, while the DraftKings Sportsbook and online casino are also available in the Ontario market, which contains about 40% of Canada's population.

Takeaways from DraftKings Q1 report

The bottom line from DraftKings’ Quarter 1 report is that the company is on track to become profitable this year. It will be the first year since the launch of DraftKings Sportsbook that the company will post a profit.

According to the report, DraftKings reported $1.18 billion in revenue over the first three months of 2024, up by $405 million from the same period in 2023 for a 53% year-over-year improvement.

The company's adjusted EBITDA, which is largely considered a better measuring stick for overall performance, went from a year-over-year quarterly loss of $220 million to a $22 million profit in the first quarter.

“DraftKings’ performance in the first quarter of 2024 was outstanding, reflecting healthy revenue growth and a scaled fixed cost structure that positions us to drive rapidly improving Adjusted EBITDA,” DraftKings CEO Jason Robins said. “Looking ahead, we remain committed to maximizing shareholder value through continued innovation, operational excellence, and disciplined capital allocation.”

According to JMP Securities analyst Jordan Bende, DraftKings’ shares have outperformed the gaming sector by approximately 22% so far in 2024.

More numbers from Q1 report

DraftKings saw a year-over-year spike in Monthly Unique Players (MUP) during the first three months of 2024. The company reported 3.4 million average monthly unique paying customers from January to March, 23% more than through the first quarter of last year.

Average revenue for its players climbed to $114 in that stretch, a 25% increase from the same period last year. A higher overall hold rate and the growth of the parlay industry - which has proven to help elevate win rates for our best sportsbooks - also contributed to a promising three-month period for DraftKings.

The result of better profits, a lower promotional spend, higher hold rate, and the emergence of the parlay market helped DraftKings raise its full year guidance to a range of $4.8 billion to $5 billion - up from the previous range of $4.65 billion to $4.90 billion. That represented yearly growth between 31% and 36%, per the report.

Fiscal year 2024 Adjusted EBITDA guidance was also upped with the release of DraftKings' first quarter earnings. It went from between $410 million and $510 million to between $460 million and $540 million thanks to the positive report.

The only real negative number in the DraftKings Q1 report was a loss of $110 million in cash from its balance sheet. This came despite generating just over $1.1 billion in total revenue during the quarter.