DraftKings just reported earnings. Here is why shares are sliding.

DraftKings (NASDAQ:DKNG) fell sharply in postmarket trading after reporting Q3 results and issuing its full-year outlook for 2024 and 2025.

Revenue jumped 39% year-over-year in Q3 to $1.10 billion, driven primarily by 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 the acquisition of Jackpocket.

DraftKings’ (DKNG) monthly unique paying customers increased 55% year-over-year to $3.60 million vs. 3.33 million consensus. Average revenue per MUP was down 10% year-over-year during the quarter to $103 vs. $103.99 consensus. The decrease was noted to be primarily due to lower ARPMUP for Jackpocket customers, when compared to customers of DraftKings’ (DKNG) existing product offerings before the acquisition, partially offset by improvement in the structural Sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming. Excluding the impact of the Jackpocket acquisition, ARPMUP increased approximately 8% compared to a year ago.

CEO update: “With major sports converging on the calendar, we are well-positioned to build on this momentum as we further enhance our top-ranked sportsbook app with additional live betting features and exciting new NBA markets. Our focus remains on driving sustainable revenue growth and profitability in 2025 and beyond.”

DraftKings (DKNG) churned up adjusted EBITDA of -$58.5 million in Q3 vs. -$74.4 million consensus.

Looking ahead, DraftKings (DKNG) said it sees 2024 adjusted EBITDA of $240 million to $280 million, vs. a prior outlook for $340 million to $420 million. DKNG also introduced fiscal year 2025 revenue guidance range of $6.2 billion to $6.6 billion, which equates to approximately 31% year-over-year growth based on the midpoints of the company’s updated fiscal year 2024 revenue guidance range and the company’s fiscal year 2025 revenue guidance range. DKNG continues to expect fiscal year 2025 adjusted EBITDA to be in the range of $900 million to $1.0 billion (midpoint $950 million) vs. $942 million consensus.

Shares of DraftKings (DKNG) moved 7.05% lower in postmarket trading after gaining 1.90% during the regular session. The lowered EBITDA guidance appears to be the culprit for the post-earnings decline. Flutter Entertainment (FLUT) was down 3.0%.