DraftKings has managed to surprise many skeptics. The US-based gaming operator has posted record figures for the fourth quarter and margins were up across the board.
This increase in efficiency has raised the revenue to almost $2 billion, which is 43 percent higher than last year. The company seems to have left behind its loss-making period and is currently making a profit. Wall Street was calling for profitability and DraftKings delivered.
The results suggest a more streamlined and efficient operation with annual revenue soaring to $6.05 billion. The number of players stayed the same at 4.8 million, but the average value per user went through the roof. Average revenue per user jumped to $139, indicating the platform is getting more value out of each login. The age of cosmetic growth is behind us. Even if the Jackpocket lottery agreement is excluded, the number of unique players rose by five percent, which is positive organic growth. Both sportsbook and iGaming are at the same time not only growing but are becoming mature, thus changing their focus to high-value engagement rather than merely sign-ups.
The final sentence pretty much unveils what went down: Adjusted EBITDA jumped to $343.2 million, compared to $89.5 million in the previous year.
Operating activities finally showed a net earnings figure of $151.8 million at the bottom line instead of posting a heavy loss as in the previous year. The company has stopped hemorrhaging financially. The full-year results show a complete change of the situation. Besides, the company has cut its operating loss drastically from a heavy loss of $609 million in 2024 to an almost breakeven point of $15.8 million, which is an incredible PB. Basically, the management has operated the business within the limits of the run rate while also allowing the top line to grow.
Entering a new battleground for growth
The Chief Executive Officer Jason Robins is aiming for a new prize. The primary focus is on a product called Predictions, which is not related to sports betting at all, and is thus a radical departure from it. It basically offers a fast market for event outcomes.
Not only is the goal very clear but quite ambitious too: to attract millions of new users. DraftKings is going to invest heavily in the development of this because they consider it a major growth vector. In this way, the company is moving beyond the traditional sports fan base.
By predicting markets, they are not only able to attract a different breed of traders, but they also have the plan to accelerate this feature of the business expansion.
The outlook for the market expansion is very positive. DraftKings envisions its 2026 revenues to be between $6.5 billion and $6.9 billion with its net income around $900 million.
Chief Financial Officer Alan Ellingson has stated that the model is really effective, however, these numbers are based on the assumption that tax rates will stay the same and any increase would change the calculations.
Even though the company has beaten its records, the market reaction was somewhat mixed. The investors seemed to have wanted even larger guidance as they sold the stock lower in after-hours trading. That shows the hardness of Wall Street: a record quarter is certainly great, but the question always is, What’s next?
