DraftKings Inc. DKNG reported fourth-quarter 2024 results with earnings and revenues missing the Zacks Consensus Estimate. Despite reporting weaker-than-expected results, the company’s shares gained 4.8% in the after-hours trading session yesterday. Investor sentiment received a boost after the company raised the midpoint of its 2025 guidance. 

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DraftKings maintained its focus on efficient customer acquisition and engagement throughout 2024, while also expanding structural sportsbook hold percentage and optimizing promotional spending. However, the company faced headwinds from customer-friendly sports outcomes. Looking ahead to 2025 and beyond, CEO and co-founder Jason Robins emphasized DraftKings’ commitment to strengthening customer economics through initiatives, such as enhancing its leadership in live betting and advancing cross-selling efforts across new verticals. The company remains focused on driving sustainable revenue growth and profitability.

Inside the Headlines of DKNG’s Q4

In the fourth quarter, the company reported an adjusted loss of 28 cents per share, wider than the Zacks Consensus Estimate of a loss of 19 cents. DraftKings reported an adjusted loss per share of 10 cents in the prior-year quarter.

Revenues of $1,392.8 million also missed the consensus mark of $1,410 million. However, the top line grew 13% on a year-over-year basis. This upside was driven by strong customer engagement, efficient new customer acquisition and the expansion of its Sportsbook offerings into new markets. The company also benefited from a higher structural sportsbook hold percentage and contributions from its acquisition of Jackpocket, which was completed on May 22, 2024. However, these gains were partially offset by customer-friendly outcomes throughout the NFL season.

Other Operating Highlights of DKNG

During the quarter, Monthly Unique Payers (MUPs) increased 36% year over year to 4.8 million average monthly unique paying customers. This growth was driven by strong unique player acquisition and retention across its Sportsbook and iGaming platforms, as well as the expansion of Sportsbook offerings into new jurisdictions. The acquisition of Jackpocket also contributed to growth. Excluding the impact of this acquisition, MUPs rose approximately 16% compared with the fourth quarter of 2023.

However, the Average Revenue per MUP (ARPMUP) of $97 declined 16% year over year, due to lower ARPMUP among Jackpocket customers compared with those using DraftKings’ existing products before the acquisition. Additionally, a lower actual sportsbook hold rate, influenced by favorable outcomes for bettors, contributed to the decrease. Excluding the Jackpocket acquisition, ARPMUP declined 4% year over year.

DKNG’s Financial Information

As of Dec. 31, 2024, DraftKings had cash and cash equivalents of $788.3 million compared with $1.27 billion as of Dec. 31, 2023.

At the end of 2024, net cash provided by operating activities was $417.8 million.

DKNG’s Fiscal 2025 Guidance 

DraftKings has raised the midpoint of its 2025 revenue guidance, now estimating the metric between $6.3 billion and $6.6 billion, up from the previous forecast of $6.2 billion to $6.6 billion announced on Nov. 7, 2024. Based on the company’s 2024 revenues and the midpoint of the updated guidance, this outlook represents approximately 35% year-over-year growth.

Additionally, DraftKings reaffirmed its 2025 adjusted EBITDA guidance of $900 million to $1 billion, maintaining previously issued forecast. The company noted that its guidance does not factor in the benefit of year-to-date sports outcomes and is based on operations within existing jurisdictions, excluding any potential impact from the launch of mobile sports betting in Missouri.

DKNG’s Zacks Rank

DraftKings currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Consumer Discretionary Releases

Royal Caribbean Cruises Ltd. RCL posted mixed fourth-quarter 2024 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. Notably, both top and bottom lines increased on a year-over-year basis.

The company’s performance during the quarter was driven by stronger pricing on close-in demand and continued strength in onboard revenues. RCL’s diversified fleet offerings, accompanied by its commercial and vacation experiences, are witnessing robust demand trends amid an improving global market backdrop. Thanks to these tailwinds, RCL could achieve its Trifecta goals before the schedule, pointing out the benefits it is realizing from the current improving scenario.

Adtalem Global Education Inc. ATGE posted better-than-expected results in second-quarter fiscal 2025. Earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year, driven by strong enrollment growth and strategic initiatives.

Adtalem's operational excellence strategy, Growth with Purpose, has driven six consecutive quarters of enrollment growth while supporting its mission to develop skilled healthcare professionals. Furthermore, strong demand at Chamberlain University and Walden University drove results. ATGE now expects fiscal 2025 adjusted earnings to be in the band of $6.10-$6.30 per share compared with the earlier prediction of $5.75-$5.95.

Las Vegas Sands Corp. LVS reported fourth-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and net revenues beating the same. Both metrics declined on a year-over-year basis.

The company reported solid financial and operational performance at Marina Bay Sands, Singapore and continued recovery in the Macao market. LVS continues to execute strategic objectives and remains optimistic about achieving industry-leading growth in both Macao and Singapore through its ongoing capital investment initiatives. It is optimistic about the introduction of new suite offerings, enhanced service levels and increased tourism spending in Asia.

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