DraftKings Inc
For the period ended Mar 31, 2025. Filed May 9, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
DKNG$18.70+1.0%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001883685-24-000036
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001883685-25-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 91 previous paragraphs and 98 current paragraphs.
38 unchanged; 37 reworded; 16 added; 10 removed; 6 previous and 7 current paragraphs rearranged.
Tables are not compared: 5 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Sportsbook Handle. We define Sportsbook Handle as the total amount of settled customer wagers on our Sportsbook product offering. Sportsbook Handle provides useful information to investors and management as it is a key indicator of volume and customer engagement on our Sportsbook product offering that is not impacted by variability of sport outcomes and provides important insight into underlying growth trends. We do not utilize handle information to track performance of our iGaming products because iGaming is generally not subject to the same variability in outcomes.
Current report
Sportsbook Net Revenue Margin. We define Sportsbook Net Revenue Margin as Sportsbook revenue as a percentage of Sportsbook Handle. This provides useful information to investors and management as it is a key indicator in measuring the combined impact of our overall margin on our Sportsbook product offering and promotional reinvestment.
Current report
The chart below presents our Sportsbook Handle, Sportsbook Net Revenue Margin, and revenue disaggregation for the three months ended March 31, 2025 and 2024:
Current report
Sportsbook Handle increased by $1,879.0 million, or 16%, to $13,880.4 million in the three months ended March 31, 2025, from $12,001.4 million in the three months ended March 31, 2024. The increase isprimarily due to MUPs increasing in 2025 as compared to 2024. The increase in MUPs was due to strong player retention and acquisition across our Sportsbook product offering.
Current report
Sportsbook Net Revenue Margin increased by 0.3 percentage points, to 6.4% in the three months ended March 31, 2025, from 6.1% in the three months ended March 31, 2024. The increase isprimarily due to structural improvement in our Sportsbook hold percentage and improved promotional reinvestment.
Current report
iGaming revenue increased$53.5 million, or 14.5%, to$423.5 million in the three months ended March 31, 2025, from $370.0 million in the three months ended March 31, 2024. The increase is primarilydue to an increase in MUPs for the product offering.
Current report
Other revenue increased$32.4 million, or 46%, to$103.4 million in the three months ended March 31, 2025, from $70.9 million in the three months ended March 31, 2024. The increase is primarily due to the inclusion of revenue from Jackpocket. We consummated the Jackpocket Transaction on May 22, 2024.
Current report
Adjusted Earnings (Loss) Per Share
Current report
The table below presents the Company’s Adjusted Earnings (Loss) Per Share reconciled to its basic earnings (loss) per share attributable to common stockholders, which is the most directly comparable financial measure calculated in accordance with GAAP, for the periods indicated:
Current report
Weighted average number of shares used to calculate Adjusted Earnings (Loss) Per Share for the three months ended March 31, 2025 and 2024 was 493.3 million and 474.2 million, respectively; totals may not add due to rounding.
Current report
(6)Beginning in the first quarter of the 2025, the Company began applying an estimated non-GAAP effective tax rate of 25%. The non-GAAP effective tax rate reflects the non-GAAP tax provision commensurate with the Company’s level of non-GAAP profitability, which was determined after adjusting for the non-GAAP adjustments presented above and excluding the impact of changes in the valuation allowance.
Current report
Interest Expense. We recorded interest expense of $5.1 million in the three months ended March 31, 2025, compared to $0.6 million in the three months ended March 31, 2024, primarily due to interest incurred on the Term B Facility.
Current report
Other Gain (Loss), net. We recorded a nominal gain in the three months ended March 31, 2025, as compared to a loss of $0.7 million in the three months ended March 31, 2024.
Current report
Income Tax Provision (Benefit). We recorded an income tax benefit of$5.6 million in thethree months ended March 31, 2025, as compared to an income tax benefit of$0.4 million in thethree months ended March 31, 2024. Although we have a cumulative three year loss position, based on our recent financial performance and our future projections, we could record a reversal of all, or a portion of the valuation allowance associated with U.S. deferred tax assets in future periods. However, any such change is subject to actual performance and other considerations that may present positive or negative evidence at the time of the assessment.
Current report
Term Loan. In March 2025, we and certain of our subsidiaries entered into a first amendment to the Credit Agreement, which provides for a new class of incremental term loans under the Credit Agreement in an aggregate principal amount of $600.0 million (the “Term B Facility” and, such term loans, the “Term B Loan”). The Term B Facility requires principal payments in the amount of 1.00% per annum of the original aggregate principal amount of the Term B Loan payable in quarterly installments. Term B Loan bear interest at the Company’s election at either (i) in the case of Term SOFR Loans, Term SOFR plus an applicable margin of 1.75% per annum, or (ii) in the case of ABR Term Loans, ABR plus an applicable margin of 0.75% per annum (with each of the capitalized terms used in clauses (i) and (ii) as defined in the Credit Agreement). As of March 31, 2025, there were $600.0 million aggregate principal amount of Term B Loan outstanding.
Current report
Financing Activities. Net cash provided by (used in) financing activities during the three months ended March 31, 2025 increased by $403.5 million to $372.8 million, compared to $30.6 million used in the three months ended March 31, 2024, primarily driven by$588.1 million of cash received from entering into the Term B Facility, partially offset by $142.3 million in treasury stock purchases under the Stock Repurchase Program, and an increase of$40.8 million of RSU withhol ding activity relating to tax obligations upon vesting of restricted stock units.
Removed paragraphs (10)
Previous report
(2)The Company recorded a discrete income tax benefit of $75.8 million during the second quarter of 2024 which was attributable to non-recurring partial releases of the Company’s U.S. valuation allowance as a result of the purchase accounting for the Jackpocket Transaction.
Previous report
Other (Loss) Gain, net. We recorded a loss of $4.6 million in the three months ended September 30, 2024, as compared to a loss of $1.2 million in the three months ended September 30, 2023, primarily due to the $5.8 million loss on the sale of VSIN.
Previous report
Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023
Previous report
Revenue. Revenue increased by $940.4 million, or 38.6%, to $3,374.9 million in the nine months ended September 30, 2024, from $2,434.5 million in the nine months ended September 30, 2023. The increase was primarily attributable to our online gaming revenues, which increased $970.4 million, or 41.2%, to $3,323.7 million in thenine months ended September 30, 2024, from $2,353.3 million in thenine months ended September 30, 2023, due to MUPs increasing by 41.0% and partially offset by a 1.0%decrease in ARPMUP as compared to thenine months ended September 30, 2023. The increase in MUPs was due tostrong player retention and acquisition across our Sportsbook and iGaming product offerings, the expansion of our Sportsbook product offering into new jurisdictions and the Jackpocket Transaction. The decrease in ARPMUP was due to lower ARPMUP for Jackpocket customers, compared to customers for DraftKings’ existing product offerings prior to the Jackpocket Transaction, partially offset by structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming.
Previous report
Sales and Marketing. Sales and marketing expense decreased $13.6 million, or 1.5%, to $896.3 million in the nine months ended September 30, 2024, from $909.9 million in the nine months ended September 30, 2023. The decrease was partially attributable to reduced stock-based compensation expense of$3.9 million.
Previous report
General and Administrative. General and administrative expense increased $120.0 million, or 28.1%, to $547.5 million in the nine months ended September 30, 2024, from $427.5 million in the nine months ended September 30, 2023. This increase was primarily driven by an increase in transaction-related costs of$23.2 million, an increase in non-core litigation cost of$30.0 million,$27.8 million in expense related to the discontinuance of Reignmakers product offering, $7.5 million in termination expenses related to a market access agreement, and an increase in advocacy expense of $6.3 million.
Previous report
Interest Income (Expense), net. We recorded net income interest of $36.3 million in the nine months ended September 30, 2024, compared to $37.6 million in the nine months ended September 30, 2023, due to fluctuations in cash balances and interest rates.
Previous report
Other (Loss) Gain, net. We recorded a loss of $5.8 million in the nine months ended September 30, 2024, as compared to a gain of $1.2 million in the nine months ended September 30, 2023, primarily due to the $5.8 million loss on the sale of VSIN.
Previous report
Leases. We have lease arrangements for certain corporate office facilities, data centers, and motor vehicles. As of September 30, 2024, the Company had lease obli gations of$87.0 million, with$11.3 million payable within 12 months.
Previous report
Financing Activities. Net cash used in financing activities during the nine months ended September 30, 2024 increased by $20.9 million to $71.4 million, compared to $50.5 million in the nine months ended September 30, 2023, primarily reflecting increased cost of purchasing treasury stock related to the satisfaction of withholding taxes due upon the vesting of restricted stock units.
Reworded paragraphs (37)
Previous wording
•market and global conditions and economic factors beyond our control, as well as the potential impact of general economic conditions, including inflation and rising interest rates, on our liquidity, operations and personnel;
Current wording
•market and global conditions and economic factors beyond our control, as well as the potential impact of general economic conditions and the potential impact of new and existing laws, regulations, or policies, including those relating to tariffs, import/export, or trade restrictions, inflation and rising interest rates, on our liquidity, operations and personnel;
Previous wording
We are a digital sports entertainment and gaming company that provides users with online sports betting (“Sportsbook”), online casino (“iGaming”) and daily fantasy sports (“DFS”) product offerings, as well as retail sportsbook, media, digital lottery and other consumer product offerings. We are also involved in the design and development of sports betting and casino gaming software for online and retail sportsbooks and iGaming operators.
Current wording
We are a digital sports entertainment and gaming company. We provide users with online and retail sports betting (together, “Sportsbook”), online casino (“iGaming”) and daily fantasy sports (“DFS”) product offerings, as well as digital lottery courier, media, and other product offerings.
Previous wording
Our mission is to make life more exciting by responsibly creating the world’s favorite real-money games and betting experiences. We accomplish this by creating an environment where our users can find enjoyment and fulfillment through Sportsbook, iGaming and DFS, as well as media, digital lottery and other online consumer product offerings. We are also highly focused on our responsibility as a steward of this new era in real-money gaming. Our ethics guide our decision making, with respect to both the tradition and integrity of sports and our investments in regulatory compliance and consumer protection.
Current wording
Our mission is to make life more exciting by responsibly creating the world’s favorite real-money games and betting experiences. We accomplish this by creating an environment where our users can find enjoyment and fulfillment through Sportsbook, iGaming and DFS, as well as digital lottery courier, media, and other product offerings. We are also highly focused on our responsibility as a steward of this new era in real-money gaming. Our ethics guide our decision making, with respect to both the tradition and integrity of sports and our investments in regulatory compliance and consumer protection.
Previous wording
Our priorities are to (a) continue to invest in our product offerings, (b) launch our product offerings in new jurisdictions, (c) create replicable and predictable jurisdiction-level unit economics in sports betting and iGaming and (d) expand our other online consumer product offerings. When we launch our Sportsbook and iGaming product offerings in a new jurisdiction, we invest heavily in user acquisition, retention and cross-selling until the new jurisdiction provides a critical mass of users engaged across our product offerings.
Current wording
Our priorities are to (a) continue to invest in our product offerings, (b) launch our product offerings in new jurisdictions, (c) create replicable and predictable jurisdiction-level unit economics in sports betting and iGaming and (d) expand our product offerings. When we launch our Sportsbook and iGaming product offerings in a new jurisdiction, we invest heavily in user acquisition, retention and cross-selling until the new jurisdiction provides a critical mass of users engaged across our product offerings.
Previous wording
We are continuing to increase our profits by utilizing the efficient customer acquisition that is enabled by the transition from local to regional to national advertising, maintaining strong customer retention, improving monetization from increased frequency of customer play and higher hold percentage, as well as scale benefits from investments in our product offerings and technology and general and administrative functions. In any given period, we expect to achieve profitability on a consolidated Adjusted EBITDA basis when total contribution profit exceeds the fixed costs of our business, which depends, in part, on the percentage of the U.S. adult population that has access to our product offerings and the other factors summarized in the section entitled “Cautionary Statement Regarding Forward-Looking Statements”.
Current wording
Our path to profitability is based on the acceleration of positive contribution profit growth driven by increased revenue and gross profit generation from ongoing efficient customer acquisition enabled by the transition from local to regional to national advertising, strong customer retention, improved monetization from frequency and higher hold percentage, as well as scale benefits from investments in our product offerings and technology and general and administrative functions. In any given period, we expect to achieve profitability on a consolidated Adjusted EBITDA basis when total contribution profit exceeds the fixed costs of our business, which depends, in part, on the percentage of the U.S. adult population that has access to our product offerings and the other factors summarized in the section entitled “Cautionary Statement Regarding Forward-Looking Statements”.
Previous wording
Revenue increased by $305.5 million and $940.4 million in the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023, respectively, primarily due to continued 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, improved promotional reinvestment for Sportsbook and iGaming, and the impact of our acquisition of Jackpocket Inc. (“Jackpocket”), which was completed on May 22, 2024.
Current wording
Revenue increased by $233.8 million in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 as a result of continued 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, improved promotional reinvestment for Sportsbook, and the impact of our acquisition of Jackpocket Inc. (“Jackpocket”), which was completed on May 22, 2024 (the “Jackpocket Transaction”).
Previous wording
Monthly Unique Payers (“MUPs”). We define MUPs as the number of unique paid users per month who had one or more real-money, paid engagements across one or more of our Sportsbook, iGaming, DFS, digital lottery or Marketplace product offerings via our technology. For reported periods longer than one month, we average the MUPs for the months in the reported period. Although the number of unique paid users includes those users that have participated in a real-money, paid engagement using only promotional incentives (which has not been a material number of users to date), which are fungible with other funds deposited into their wallets on our technology, it does not include users who have made a deposit but have not yet had a real-money, paid engagement.
Current wording
Monthly Unique Payers (“MUPs”). We define MUPs as the number of unique paid users per month who had one or more real-money, paid engagements across one or more of our Sportsbook, iGaming, DFS, digital lottery courier or other offerings via our technology. For reported periods longer than one month, we average the MUPs for the months in the reported period. Although the number of unique paid users includes those users that have participated in a real-money, paid engagement using only promotional incentives (which has not been a material number of users to date), which are fungible with other funds deposited into their wallets on our technology, it does not include users who have made a deposit but have not yet had a real-money, paid engagement.
Previous wording
The charts below present our average MUPs for the three and nine months ended September 30, 2023 and 2024:
Current wording
The charts below present our average MUPs for the three months ended March 31, 2024 and 2025:
Previous wording
Average Revenue per MUP (“ARPMUP”). We define and calculate ARPMUP as the average monthly revenue, excluding revenue from gaming software services, for a reporting period, divided by the average number of MUPs for the same period. ARPMUP is a key indicator of our ability to drive usage and monetization of our product offerings. The charts below present our ARPMUP for the three and nine months ended September 30, 2023 and 2024:
Current wording
Average Revenue per MUP (“ARPMUP”). We define and calculate ARPMUP as the average monthly revenue, excluding revenue from gaming software services, for a reporting period, divided by the average number of MUPs for the same period. ARPMUP is a key indicator of our ability to drive usage and monetization of our product offerings. The charts below present our ARPMUP for the three months ended March 31, 2024 and 2025:
Previous wording
The increase in MUPs for the three and nine months ended September 30, 2024, compared to the same periods in 2023, primarily reflects strong unique payer retention and acquisition across our Sportsbook and iGaming product offerings, as well as the expansion of our Sportsbook product offering into new jurisdictions and the impact of our acquisition of Jackpocket (the “Jackpocket Transaction”). Excluding the impact of the Jackpocket Transaction, MUPs increased 0.6 million or 26.9% to 2.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased 0.6 million, or 27.3% to 3.0 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Current wording
The increase in MUPs for the three months ended March 31, 2025, compared to the same periods in 2024, primarily reflects strong unique payer retention and acquisition across our Sportsbook and iGaming product offerings and the impact of the Jackpocket Transaction. Excluding the impact of the Jackpocket Transaction, MUPs increased 0.4 million or 10.8% to 3.8 million for thethree months ended March 31, 2025 compared to thethree months ended March 31, 2024.
Previous wording
ARPMUP decreased in the three and nine months ended September 30, 2024, compared to the same periods in 2023, primarily due to lower ARPMUP for Jackpocket customers, compared to DraftKings’ existing product offerings prior to the Jackpocket Transaction, which was partially offset by structural improvement in our Sportsbook hold and improved promotional reinvestment for Sportsbook and iGaming. Excluding the impact of the Jackpocket Transaction, ARPMUP increased $8, or 7.5% to $122 for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $10, or 8.5% to $122 for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Current wording
ARPMUP decreased in the three months ended March 31, 2025, compared to the same periods in 2024, primarily due to lower ARPMUP for Jackpocket customers, compared to DraftKings’ other product offerings, which was partially offset by structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook. Excluding the impact of the Jackpocket Transaction, ARPMUP increased $8, or 6.8% to $122.1 for thethree months ended March 31, 2025 compared to thethree months ended March 31, 2024.
Previous wording
This Report includes Adjusted EBITDA, which is a non-GAAP financial measure that we use to supplement our results presented in accordance with U.S. GAAP. We believe Adjusted EBITDA is useful in evaluating our operating performance, similar to measures reported by our publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA is not intended to be a substitute for any U.S. GAAP financial measure. As calculated, it may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
Current wording
This Report includes Adjusted EBITDA and Adjusted Earnings (Loss) Per Share, which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe Adjusted EBITDA and Adjusted Earnings (Loss) Per Share are useful in evaluating our operating performance, similar to measures reported by our publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share are not intended to be a substitute for any U.S. GAAP financial measure. As calculated, they may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
Previous wording
We define and calculate Adjusted EBITDA as net income (loss) before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; and other non-recurring and non-operating costs or income, as described in the reconciliation below.
Current wording
We define and calculate Adjusted EBITDA as net income (loss) before the impact of interest income and expense, income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; and other non-recurring and non-operating costs or income, as described in the reconciliation below.
Previous wording
We include non-GAAP financial measures because they are used by management to evaluate our core operating performance and trends and to make decisions regarding the allocation of capital and new investments. Adjusted EBITDA excludes certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of depreciation and amortization, remeasurement of warrant liabilities and stock-based compensation), or non- operating items which are not related to our underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs).
Current wording
We include non-GAAP financial measures because they are used by management to evaluate our core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share exclude certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of amortization of acquired intangible assets, depreciation and amortization, remeasurement of warrant liabilities and stock-based compensation), or non-operating items which are not related to our underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs).
Previous wording
(1)The amounts include the amortization of acquired intangible assets of $55.5 million and $29.2 million for the three months ended September 30, 2024 and 2023, respectively, and $121.2 million and $88.0 million for the nine months ended September 30, 2024 and 2023, respectively.
Current wording
(1)The amounts include the amortization of acquired intangible assets of $42.7 million and $29.3 million for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
(3)Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans.
Current wording
(2)Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans.
Previous wording
(4)Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with transactions under consideration, pending, or completed transactions and offerings, including costs relating to our completed acquisitions of Jackpocket and Sports IQ Analytics Inc.
Current wording
(3)Includes capital markets advisory, consulting, accounting and legal expenses related to the evaluation, negotiation, and consummation of transactions and offerings that are under consideration, pending, or completed, as well as integration costs related to acquisitions.
Previous wording
(5)Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.
Current wording
(4)Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.
Previous wording
(6)Reflects non-recurring and non-ordinary course costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings. This adjustment excludes (i) costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate that are incurred in the ordinary course of business and (ii) costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate.
Current wording
(5)Reflects non-recurring and non-ordinary course costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings. This adjustment excludes (i) costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate that are incurred in the ordinary course of business and (ii) costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate.
Previous wording
(7)Primarily includes the change in fair value of certain financial assets, as well as our equity method share of investee’s losses and other costs relating to non-recurring and non-operating items. For the three and nine months ended September 30, 2024, this amount also includes $27.8 million in expense related to the discontinuance of our Reignmakers product offering, $7.5 million in expenses related to the termination of a market access agreement, and a $5.8 million loss on the sale of Vegas Sports Information Network, LLC ("VSIN"). For the nine month period ended September 30, 2024, these costs are offset by $20.9 million related to gaming tax credits as a result of audits and appeals related to prior periods.
Current wording
(6)Primarily includes the change in fair value of certain financial assets, as well as our equity method share of investee’s losses and other costs relating to non-recurring and non-operating items.
Previous wording
Revenue. Revenue increased by $305.5 million, or 38.7%, to $1,095.5 million in the three months ended September 30, 2024, from $790.0 million in the three months ended September 30, 2023. The increase was primarily attributable to our online gaming revenues, which increased $316.0 million, or 41.1%, to $1,084.2 million in the three months ended September 30, 2024, from $768.3 million in the three months ended September 30, 2023, due to MUPs increasing by 54.8%, partially offset by ARPMUP decreasing by 9.9% as compared to the three months ended September 30, 2023. The increase in MUPs was due tostrong player retention and acquisition across our Sportsbook and iGaming product offerings, the expansion of our Sportsbook product offering into new jurisdictions and the Jackpocket Transaction. The decrease in ARPMUP was due to lower ARPMUP for Jackpocket customers compared to customers for DraftKings’ existing product offerings prior to the Jackpocket Transaction, partially offset by structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming.
Current wording
Revenue. Revenue increased by $233.8 million, or 19.9%, to $1,408.8 million in the three months ended March 31, 2025, from $1,175.0 million in the three months ended March 31, 2024. The increase was primarily attributable to our Sportsbook and iGaming product offerings, which increased$201.4 million, or 18.2%, to$1,305.4 million in the three months ended March 31, 2025, from$1,104.1 million in the three months ended March 31, 2024, due to MUPs increasing by 26.5%, partially offset by ARPMUP decreasing by 5.3% as compared to the three months ended March 31, 2024. The increase in MUPs was due tostrong player retention and acquisition across our Sportsbook and iGaming product offerings, the expansion of our Sportsbook product offering into new jurisdictions and the Jackpocket Transaction. The decrease in ARPMUP was due to lower ARPMUP for Jackpocket customers compared to customers for DraftKings’ existing product offerings prior to the Jackpocket Transaction, partially offset by structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming.
Previous wording
Cost of Revenue. Cost of revenue increased$199.0 million, or 36.6%, to$742.4 million in thethree months ended September 30, 2024, from$543.5 million in thethree months ended September 30, 2023. The increase was due, in part, to revenue growth from our expanded product and jurisdictional footprint, including the launch of our Sportsbook product offering in Ohio, Massachusetts, Kentucky and Maine throughout 2023, as well as in Vermont, North Carolina and Washington, D.C. in 2024. In particular, the cost of revenue increase was primarily attributable to an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $117.2 million and $20.2 million, respectively. The remaining increase was primarily attributable to an increase in our variable platform costs resulting from additional customer activity and an increase in amortization of intangible assets of $39.5 million.
Current wording
Cost of Revenue. Cost of revenue increased$133.7 million, or 18.8%, to$843.8 million in thethree months ended March 31, 2025, from$710.1 million in thethree months ended March 31, 2024. The increase was due primarily to revenue growth from our expanded product and jurisdictional footprint, including the launch of our Sportsbook product offering in North Carolina and Washington, D.C. in 2024. In particular, the cost of revenue increase was primarily attributable to an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $81.7 million and $29.1 million, respectively. The remaining increase was primarily attributable to an increase in our variable platform costs resulting from additional customer activity and an increase in amortization of intangible assets of $18.3 million.
Previous wording
Cost of revenue as a percentage of revenue decreased by 1.0%to 67.8% in thethree months ended September 30, 2024, as compared to 68.8% in thethree months ended September 30, 2023, reflecting, in part, structural improvement in our Sportsbook hold rate and improved promotional reinvestment for our Sportsbook and iGaming product offerings, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our more mature DFS product offering.
Current wording
Cost of revenue as a percentage of revenue decreased by 0.5 percentage pointsto 59.9% in thethree months ended March 31, 2025, as compared to 60.4% in thethree months ended March 31, 2024, reflecting, in part, structural improvement in our Sportsbook hold rate, an improved Sportsbook Net Revenue Margin, and improved promotional reinvestment for our Sportsbook product offering, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our DFS product offering.
Previous wording
Sales and Marketing. Sales and marketing expense increased $26.6 million, or 8.5%, to $339.9 million in the three months ended September 30, 2024, from $313.3 million in the three months ended September 30, 2023. The increase was primarily attributable to higher advertising costs of$11.8 million and higher stock-based compensation expense of $2.6 million.
Current wording
Sales and Marketing. Sales and marketing expense increased $3.0 million, or 0.9%, to $343.7 million in the three months ended March 31, 2025, from $340.7 million in the three months ended March 31, 2024. The increase was primarily attributable to higher stock-based compensation expense.
Previous wording
Product and Technology. Product and technology expense increased $14.6 million, or 16.4%, to $103.6 million in the three months ended September 30, 2024, from $89.0 million in the three months ended September 30, 2023 due to increased headcount in our product and engineering departments.
Current wording
Product and Technology. Product and technology expense increased $14.4 million, or 16.3%, to $103.3 million in the three months ended March 31, 2025, from $88.8 million in the three months ended March 31, 2024 due to increased headcount in our product and engineering departments.
Previous wording
General and Administrative. General and administrative expense increased $77.4 million, or 59.2%, to $208.1 million in the three months ended September 30, 2024, from $130.8 million in the three months ended September 30, 2023. This increase was primarily driven by$27.8 million in expense related to the discontinuance of our Reignmakers product offering, $7.5 million in termination expenses related to a market access agreement, an increase in non-core litigation expense of $16.6 million, and an increase in advocacy expense of $6.0 million.
Current wording
General and Administrative. General and administrative expense decreased $9.9 million, or 5.7%, to $164.4 million in the three months ended March 31, 2025, from $174.3 million in the three months ended March 31, 2024. This decrease was primarily driven by a decrease in non-core litigation expense of $9.3 million.
Previous wording
Interest Income (Expense), net. We recorded net interest income of $8.3 million in the three months ended September 30, 2024, compared to $13.8 million in the three months ended September 30, 2023, due to fluctuations in cash balances and interest rates.
Current wording
Interest Income. We recorded interest income of $9.5 million in the three months ended March 31, 2025, compared to $15.1 million in the three months ended March 31, 2024, due to fluctuations in cash balances and interest rates during the respective periods.
Previous wording
Gain (Loss) on Remeasurement of Warrant Liabilities. We recorded a nominal gain on remeasurement of warrant liabilities in the three months ended September 30, 2024, compared to a loss of $7.8 million in the three months ended September 30, 2023, due to changes in the underlying share price of our Class A common stock.
Current wording
Gain (Loss) on Remeasurement of Warrant Liabilities. We recorded a gain of $2.5 million on remeasurement of warrant liabilities in the three months ended March 31, 2025, compared to a loss of $18.1 million in the three months ended March 31, 2024, due to changes in the underlying share price of our Class A common stock.
Previous wording
Net Loss. Net loss increased by $10.6 million to a net loss of $293.7 million in the three months ended September 30, 2024, as compared to a net loss of $283.1 million in the three months ended September 30, 2023, for the reasons discussed above.
Current wording
Net Income (Loss). Net loss decreased by $108.7 million to a net loss of $33.9 million in the three months ended March 31, 2025, as compared to a net loss of $142.6 million in the three months ended March 31, 2024, for the reasons discussed above.
Previous wording
We had $877.8 million in cash and cash equivalents as of September 30, 2024 (excluding restricted cash and cash reserved for users, which we segregate on behalf of our paid users for all jurisdictions and product offerings). We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months. We will continue to evaluate our long-term operating performance and cash needs and believe we are well positioned to continue to fund the operations of our business long-term.
Current wording
We had $1,119.7 million in cash and cash equivalents as of March 31, 2025 (excluding restricted cash and cash reserved for users, which we segregate on behalf of our paid users for all jurisdictions and product offerings). We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months. We will continue to evaluate our long-term operating performance and cash needs and believe we are well positioned to continue to fund the operations of our business long-term.
Previous wording
Debt. In March 2021, we issued zero-coupon convertible senior notes in an aggregate principal amount of $1,265.0 million (the “Convertible Notes”). The Convertible Notes mature on March 15, 2028, subject to earlier conversion, redemption or repurchase. In connection with the pricing of the Convertible Notes and the exercise of the option to purchase additional Convertible Notes, we entered into privately negotiated capped call transactions (the “Capped Call Transactions”). The Capped Call Transactions are expected generally to reduce potential dilution to DraftKings Inc.’s Class A common stock upon any conversion of the Convertible Notes. The net cost of $124.0 million incurred to enter into the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company’s consolidated balance sheet. As of September 30, 2024, the Convertible Notes, net of issuance costs, balance was $1,255.8 million.
Current wording
Debt. In March 2021, we issued zero-coupon convertible senior notes in an aggregate principal amount of $1,265.0 million (the “Convertible Notes”). The Convertible Notes mature on March 15, 2028, subject to earlier conversion, redemption or repurchase. In connection with the pricing of the Convertible Notes and the exercise of the option to purchase additional Convertible Notes, we entered into privately negotiated capped call transactions (the “Capped Call Transactions”). The Capped Call Transactions are expected generally to reduce potential dilution to DraftKings Inc.’s Class A common stock upon any conversion of the Convertible Notes. The net cost of $124.0 million incurred to enter into the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company’s consolidated balance sheet. As of March 31, 2025, the Convertible Notes, net of issuance costs, balance was $1,257.1 million.
Previous wording
Revolving Credit Facility. On November 7, 2024, the Company entered into a credit agreement with various financial institutions, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, providing for a senior secured revolving credit facility of up to $500.0 million. In conjunction with the new credit agreement and revolving credit facility, the Company’s previous credit agreement and revolving line of credit were terminated.
Current wording
Revolving Credit Facility. In November 2024, we and certain of our subsidiaries entered into a credit agreement (the “Credit Agreement”) with various financial institutions, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, providing for a senior secured revolving credit facility of up to $500.0 million (the “Revolving Credit Facility”). The Revolving Credit Facility provides for revolving loans, swing line borrowings and letters of credit and has a maturity date of November 7, 2029. As of March 31, 2025, $10.0 million in letters of credit were issued under the Credit Agreement, with $490.0 million available for borrowing.
Previous wording
Other Purchase Obligations. We have certain non-cancelable contracts with vendors, licensors and others requiring us to make future cash payments. As of September 30, 2024, these purchase obligations were $1,031.6 million, with $128.7 million payable in the remainder of 2024.
Current wording
Other Purchase Obligations. We have certain non-cancelable contracts with vendors, licensors and others requiring us to make future cash payments. As of March 31, 2025, these purchase obligations were $839.9 million, with $317.8 million payable in the remainder of 2025.
Previous wording
Stock Repurchase Program. On July 30, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $1.0 billion of our Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws. As of September 30, 2024, we have not purchased any shares of Class A common stock under this stock repurchase program.
Current wording
Stock Repurchase Program. On July 30, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $1.0 billion of our Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws. The Company repurchased 3.7 million shares for $142.3 million during the three months ended March 31, 2025. As of March 31, 2025, we have purchased 4.8 million shares of Class A common stock since the inception of the stock repurchase program.
Previous wording
Operating Activities. Net cash provided by (used in) operating activities in the nine months ended September 30, 2024 was $92.6 million, compared to $73.8 million used in operating activities in the nine months ended September 30, 2023, mainly reflecting an improvement in net loss, net of non-cash items, of$320.3 million, offset by changes in operating assets and liabilities.
Current wording
Operating Activities. Net cash used in operating activities in the three months ended March 31, 2025 was $119.0 million, compared to $70.4 million used in operating activities in the three months ended March 31, 2024, primarily from$141.7 million of cash used from changes in operating assets and liabilities from timing differences, offset by an improvement in net loss, net of non-cash items, of$93.1 million.
Previous wording
Investing Activities. Net cash used in investing activities during the nine months ended September 30, 2024 increased by $421.3 million to $488.2 million, compared to $66.9 million in the nine months ended September 30, 2023, mainly reflecting an increase in cash paid for acquisitions, net of cash acquired, of $392.5 million.
Current wording
Investing Activities. Net cash used in investing activities during the three months ended March 31, 2025 increased by $0.2 million to $39.0 million, compared to $39.2 million in the three months ended March 31, 2024, primarily due to a decrease of $10.0 million in cash paid for gaming licenses, offset by an increase of $8.6 million in cash paid for internally developed software costs.
Previous wording
During the nine months ended September 30, 2024, there were no changes to the critical accounting estimates discussed in the 2023 Annual Report.
Current wording
During the three months ended March 31, 2025, there were no changes to the critical accounting estimates discussed in the 2024 Annual Report.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
(2)Adjusted Earnings (Loss) Per Share is a non-GAAP financial measure. See “Non-GAAP Information” below for additional information about this measure and a reconciliation of this measure to the most directly comparable financial measure calculated in accordance with U.S. GAAP.
Current report — wording carried from elsewhere
We define and calculate Adjusted Earnings (Loss) Per Share as basic earnings (loss) per share attributable to common stockholders before the impact of amortization of acquired intangible assets; stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; and other non-recurring and non-operating costs or income, as described in the reconciliation below.
Current report — wording carried from elsewhere
(1)The amounts include the amortization of acquired intangible assets of $42.7 million and $29.3 million for the three months ended March 31, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
(2)Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans.
Current report — wording carried from elsewhere
(3)Includes capital markets advisory, consulting, accounting and legal expenses related to the evaluation, negotiation, and consummation of transactions and offerings that are under consideration, pending, or completed, as well as integration costs related to acquisitions.
Current report — wording carried from elsewhere
(4)Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.
Current report — wording carried from elsewhere
(5)Reflects non-recurring and non-ordinary course costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings. This adjustment excludes (i) costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate that are incurred in the ordinary course of business and (ii) costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
The following table sets forth a summary of our consolidated results of operations for the interim periods indicated, and the changes between periods:
Previous report — wording carried elsewhere
Cost of Revenue. Cost of revenue increased$540.4 million, or 34.3%, to$2,115.9 million in thenine months ended September 30, 2024, from$1,575.5 million in thenine months ended September 30, 2023. The increase was due, in part, to revenue growth from our expanded product and jurisdictional footprint, including the launch of our Sportsbook product offering in Ohio, Massachusetts, Kentucky and Maine throughout 2023, as well as in Vermont, North Carolina and Washington, D.C. in 2024. In particular, the cost of revenue increase was primarily attributable to an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $327.3 million and $72.3 million, respectively. The remaining increase was primarily attributable to an increase in our variable platform costs resulting from additional customer activity.
Previous report — wording carried elsewhere
Cost of revenue as a percentage of revenue decreased by 2.0 percentage points to 62.7% in thenine months ended September 30, 2024, as compared to 64.7% in thenine months ended September 30, 2023, reflecting, in part, structural improvement in our Sportsbook hold rate and improved promotional reinvestment for our Sportsbook and iGaming product offerings, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our more mature DFS product offering.
Previous report — wording carried elsewhere
Product and Technology. Product and technology expense increased $18.1 million, or 6.8%, to $285.1 million in the nine months ended September 30, 2024, from $267.0 million in the nine months ended September 30, 2023 primarily due to increased headcount in our product and engineering departments.
Previous report — wording carried elsewhere
Loss on Remeasurement of Warrant Liabilities. We recorded a loss on remeasurement of warrant liabilities of $8.3 million in the nine months ended September 30, 2024, compared to a loss of $44.8 million in the nine months ended September 30, 2023, due to changes in the underlying share price of our Class A common stock.
Previous report — wording carried elsewhere
Net Income (Loss). Net income (loss) improved by $385.1 million to a net loss of $372.4 million in the nine months ended September 30, 2024, as compared to a net loss of $757.5 million in the nine months ended September 30, 2023, for the reasons discussed above.