DraftKings rallies after churning up record revenue as sports outcomes broke its way

DraftKings (NASDAQ:DKNG) rose in postmarket trading after posting mixed Q2 results and revising its full-year guidance.

Revenue increased 37.3% year-over-year in Q2 to $1.51 billion, driven primarily by continued healthy customer engagement, efficient acquisition of new customers, a higher structural sportsbook hold percentage, and sportsbook-friendly outcomes. Notably, the company has had a recent run of seeing quarterly sports betting hold rates below expectations due to outcomes that did not tilt in its favor.

DraftKings’ (NASDAQ:DKNG) monthly unique paying customers increased 6% year-over-year to 3.3 million vs. 3.8 million consensus. Average revenue per MUP was up 29% year-over-year during the quarter to $151 vs. $123.28 consensus. The increase was primarily due to improvement in DKNG’s sportsbook hold percentage and improved promotional reinvestment for sportsbook. Excluding the impact of the acquisition of Jackpocket, ARPMUP increased 30% compared to a year ago.

DraftKings (DKNG) generated a record level of adjusted EBITDA in Q2, $301 million vs. $243.8 million consensus.

“We set records for revenue, net income and adjusted EBITDA in the second quarter, driven by an acceleration in revenue growth to 37% year-over-year,” highlighted CEO Jason Robins.

“We are pleased to be maintaining our fiscal year 2025 guidance, with revenue expected to be closer to the high end of our range, highlighting the strength of our platform as we prepare for an exciting new state launch,” he added.

Looking ahead, DraftKings (DKNG) now expects FY25 revenue in the range of $6.2 billion to $6.4 billion (midpoint $6.3 billion) vs. $6.31 billion consensus.

Shares of DraftKings (DKNG) rose 5.5% in postmarket trading after gaining 0.9% during the regular session.