Q2 2024 Draftkings Inc Earnings Call Transcript
Key Points
- DraftKings Inc (DKNG) achieved strong and efficient customer acquisition, with new OSB and iGaming customers increasing nearly 80% year-over-year.
- The company plans to implement a gaming tax surcharge in high tax states, potentially increasing adjusted EBITDA in 2025 and beyond.
- The Jackpocket integration is progressing well, with expectations for positive adjusted EBITDA in fiscal year 2025.
- DraftKings Inc (DKNG) reiterated its expectation for $900 million to $1 billion of adjusted EBITDA in fiscal year 2025.
- The Board authorized a share repurchase of up to $1 billion of Class A common stock, reflecting confidence in the business trajectory and future free cash flow generation.
- Fiscal year 2024 adjusted EBITDA guidance was revised down to $340 million to $420 million from the previous range of $460 million to $540 million.
- The increase in customer acquisition costs and promotional expenses is expected to impact EBITDA in the short term.
- Illinois raising its Sportsbook tax rate is a significant factor in the revised EBITDA guidance.
- The company faces potential challenges in implementing the gaming tax surcharge and its impact on customer behavior is uncertain.
- DraftKings Inc (DKNG) continues to face competition from illegal markets, which do not pay taxes and can invest more in product and customer experience.
Good day, and thank you for standing by. Welcome to DraftKings first quarter (sic - "second quarter") 2024 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions) Please be advised, today's conference is being recorded.
I would like to turn the call over to your speaker today, Alan Ellingson, DraftKings Chief Financial Officer. Please proceed.
Good morning, everyone, and thank you for joining us today. Certain statements we make during this call may constitute forward-looking statements that are subject to risks, uncertainties and other factors as discussed further in our SEC filings, that could cause our actual results to differ materially from our historical results or from our forecasts. We assume no responsibility to update forward-looking statements other than as required by law.
During this call, management
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