DraftKings (DKNG) 14 Feb 252024 Q4 Earnings call transcript

Company Profile

Participants

Alan Ellingson	executive
Jason Robins	executive
Shaun Kelley	analyst
Stephen Grambling	analyst
David Katz	analyst
Carlo Santarelli	analyst
Robin Farley	analyst
Robert Fishman	analyst
Benjamin Miller	analyst
Joseph Stauff	analyst
William Lampen	analyst
Daniel Politzer	analyst
Jed Kelly	analyst
Brandt Montour	analyst
Barry Jonas	analyst
Benjamin Chaiken	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to DraftKings Fourth Quarter 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Alan Ellingson, DraftKings' Chief Financial Officer. Please go ahead.

Alan Ellingson

thank joining and today. everyone, morning, you us for Good discussed may during statements uncertainties Certain to SEC differ as results actual make our from cause call that and in constitute could filings factors, materially risks, statements we results to our this forecast. forward-looking our our subject that other historical from further or are We by law. required other than assume as no responsibility to update forward-looking statements,

be with DraftKings' SEC. be substitute operating annual to XX-K or non-GAAP During These available this financial certain found useful call, the in website. in believe the GAAP. we and measures as report financial discuss measures filed release are not evaluating with management non-GAAP in GAAP of should Reconciliations prepared measures may most performance. isolation our on measures directly can and be for will that in accordance Form results also considered on in these our our DraftKings' comparable earnings which presentation, a

we Co-Founder our business. Hosting share and on update call DraftKings, and an some opening Jason will of Officer today, who the Executive remarks Chief have Robins,

Following a our review Jason's I remarks, will financials. provide of

to will open We then questions. line the

now to over I the Jason Robins. turn will call

Jason Robins

growth to for trajectory with and in us. of thank our share and I'm to We had of I wrapped of the than about ability XXth years. in or just I'm Good morning, our up am and the results joining. enthusiastic and focus Today, we DraftKings, our on XXXX you why all strong XXXX excited areas for confident XXXX. next few year year begins opportunity the more capitalize confidence My ahead substantial ever

our to flow to increased XX% $X.X first million improved strong Adjusted base time operating our history. total for I the X.X free was million demonstrating increased cash We the costs business acquired proud in and $XXX am million, leverage. also that billion. For revenue $XXX EBITDA positive year-over-year record year, to customer customers low at million. acquisition year-over-year is XX% our customer and new $XX.X year-over-year

adjusted X% for year fiscal our While revenue only acquisition. our XX% we're in normalizing XXXX, expenses operating increased grew costs related to year-over-year,

continue and to We technologies while scale new strong expect organization. across approach discipline continue exert as the as growth this remains leverage we our our revenue to expenses

Looking I'm further ahead to even about the could growth. number vectors accelerate that excited a our future. of further

the Our hold to prove and structural continuing than increase, higher we long-term Sportsbook to is percentage forecast. ceiling

online question verticals ]. their in gaming [ the digital our only a not in are newer of courier Additional if. infancy appears such legalization inevitable U.S. And more and as when, lottery

begun money believe a DraftKings at the are large a In online even we epicenter one is is and capture of opportunity. to with to focus our trend. mega significant extending outside Canada, a share, area and expand positioned explore longer-term haven't we which the we and it. as tailwinds secular in behind We could U.S. of Real lead industry well XXXX, gaming growing betting. live is

bring Simple with recent analytical the provide product road live and and Bet Sports will Golf tools and accelerate analytics experience of IQ level. acquisitions proven us map Muster Our another betting to that our technology

growing and emerging also further will on our We focus verticals. integrating

cracked is For scratch be the Jackpocket to and channel ecosystem. proven acquisition includes that Mega expanded courier product more for larger digital in instance, #X Store the an of Millions gain. reached prices, positioned in from to efficient app App states benefit jackpot the $X.X The category billion. the app Jackpocket, or offering entertainment the an lottery recently DraftKings top has the X

on sheet we we are Lastly, as focused can intelligently grows. deploy balance how capital our

to while to options structure maximize to our This leverage. by opportunities markets the cash we us flow, are available a more Now capital in generating exploring approach prudent includes debt that free we returns. significant shareholder positive have optimizing maintaining

about will returning capital in closing, in all the very to available returns. We options excited and while to In trajectory prioritize highest I'm considering risk-adjusted us our targeting our shareholders, to XXXX continue beyond.

that, Officer, Ellingson. over I will our to Alan With Chief turn Financial it

Alan Ellingson

Jason. fourth note with a quarter our measures the I'll and revenue, our guidance. are XXXX except income fiscal including all year performance start that you, basis. EBITDA discussed for XXXX highlights, Please adjusted non-GAAP statement on Thank

As share our across Jason fourth pleased XXXX, mentioned, to drivers. and was our we had I'm value strong an excellent core that quarter

million jackpot billion $X.XXX Millions also mix structural from and engagement reaching of XX XX.X% acquired Sportsbook exceeded our quarter, expectations billion Sportsbook XX% to Customer customers to benefited our continued fourth acquisition increase to strong courier and growth improved digital lottery iGaming NFL the of quarter year-over-year year-over-year, handle were new we revenue, points and the increasing vertical XXX retention and $X.X improve, the percentage Customer our Mega in Parley generated year-over-year. as basis December. adjusted than for In as representing basis late points newly year-over-year EBITDA. more hold $XX continued

a in XX% our terms. couple outperformed Adjusted reflects comment dollar quarter a outcomes. reinvestment of despite our of margins our percentage expectations customer-friendly from promotional of minutes to also gross I'd hold first take Sportsbook headwind to structural offers improving of optimization Promotional XXXX. on and the like

adjusted hold us in and in drivers XXXX our Sportsbook January, We year incremental guidance off XX%. EBITDA to excellent actual revenue our resulted with for that In percentage and are adjusted our an of confidence and start, EBITDA an the ranges. month exceeded value expectations provides revenue core that fiscal

and in our an app for to February sports through bright Sportsbook continue was Super tentpole our million. the Bowl acquisition company. customer all for base On Additionally, the acquisition, our percentage The the be handle engagement in as hold at and our retention Super strong, daily was apps. $XXX reached acquisition DraftKings #X Sunday, Store App successful own across spot engagement Sportsbook set and we category one #X a was standpoint, Sportsbook record XX%. From actual our event and engagement XX, month-to-date a Bowl, of

ultimately highest Sportsbook Parley the Finally, approximately year-over-year were gross debt mix as which day revenue in the company. gaming of favorable the history same-game trends XX% in resulted handle increased

Now moving on to XXXX year our fiscal guidance.

would XXXX in raising our we of billion. due low our expectation revenue making are of we range that billion betting fiscal Simple into of offering, our to November, the are range that midpoint $X.X be In we investments the end to Bet. Today, live and acquisition stated year the our including $X.X

We live and $X.X billion, revenues our growth to to expect EBITDA which XXXX XXXX neutral adjusted XXXX billion EBITDA expect in year-over-year positive will to We of $X.X to betting initiatives adjusted now be XX%. represents and beyond. XX% of in

been $XXX the across expectation in that adjusted we value XXXX so in to shared but our fiscal EBITDA range year billion. Today, excellent reaffirming million range. $X It year, the also drivers. of that core is far had November guidance are We performance our be would in the has early

mobile and nor Importantly, year-to-date EBITDA launching the favorable company for Missouri. support of betting revenue our fiscal guidance year adjusted benefit outcomes does in the XXXX include sports not

of now detail, hold margin a In the X% fiscal book XX% anticipate we X.X%. Sportsbook percentage to structural approximately net of XXXX terms additional expect revenue and year of continue to sports in range

of expect higher our our in last which to the range midpoint is XX% than now XX%, to to expectations margin relative be quarter. slightly adjusted We gross

expense compensation to We expect to revenue. stock-based represent X% continue of approximately

XXXX. million. EBITDA $XXX cash fiscal be of the to expect Finally, approximately and we flow between flow adjusted in $XXX bridge free year million therefore, free to and expect cash generate

line questions. our open remarks, and now concludes we That for the will

Operator

first Kelley the of [Operator question Bank Instructions] with America. line Our from comes of Shaun

Shaun Kelley

Jason off to side trends or the start growth on wanted and Alan, of I business. with handle volume the

is fourth kind in growth saw how can reacceleration across the quarter. bit your And is you as for industry that do So a drive the to a What a And wanted outlook reach to concern you know in of stated XXXX? of necessary here. slow pickup you? we I just handle a think much

Jason Robins

the Appreciate Sean. Thanks, question.

of So numbers really think, lot a reality. of definitely, can I factors, kind that masking are affect

was for But game example, less or a NFL not the So versus than X XXXX there huge in the quarter, excuse -- fourth year year me, this 'XX. in thing.

that Handle in less it was acceleration have distraction the in can little mean we've good, was difference. what handle But biggest is rapid seen the the make still but think a 'XX probably So growth. is think now. a than I seeing I we things election. a growth reason we pretty impact we're just around confidence like

little You saw of ratings, was a the down quarter. back MBA some bounced It's quite first thing bit. with the same the in bit a

on end, seen the new thing our growth the the elections we've same think since especially I and handle accelerate year. So into pass

Shaun Kelley

lot Great. news of side, and wanted prediction And there during a and out on contracts sports if flow the follow-up I there's and could, just buzz landscape. events -- been around Jason. markets the strategic a I

kind can of here? a project appreciate Or what's it's moving and something DraftKings that you'd into? what get kind very But has this from early target. differentiate of or sort just take been So this Is initial here, you offering? of

Jason Robins

think you're it's right, do early. I Yes.

interest seeing how certainly out. We are actively. very it in it keen something plays watching we It's that have

So I be couple some other or and things. think months, going -- CFTC is in the sorts to there XX a all of of there's so, days ruling next

we'll over more few think a I know lot next So the months.

Operator

comes from of line Stephen Our with Stanley. Morgan the next question Grambling

Stephen Grambling

longer promotional of out, GGR. how for the takes a like will reduction some Thanks and reinvestment influence a term? you're major zoom detail modest lease looks and here percentage in fairly the the incremental intensity puts assuming If net intensity evolve are may The on Sportsbook. revenue the of at what that target as that we promotional

Jason Robins

sorry, Yes, it's about you're talking -- XXXX.

Stephen Grambling

I right guess, XXXX continue if versus how matures, then imagine I And the XXXX. just the guess case. but lower that if industry -- I Yes, think kind of wondering would to, will that's as about we trend

Jason Robins

decline our a quite in promotional That's intensity.

in work But expecting I maybe So XXXX. decline intensity our on think I promotional think you and in that. meaningful you pretty with a -- we're help analysts off-line it's can

Stephen Grambling

Got it.

hold. about we volatility to you with forward? going hold back? I'll during Obviously, follow capital there or where And sneak any approach there willingness your to does how is buy opportunistic I'll the in. impact then buy deploy that as started So X was back more up will How you consistent a tougher specific think buyback that. either period Maybe and

Alan Ellingson

with communicated and cash going be we've consistent We're be past Yes, Stephen, fairly I'll we'd that. the to like our very it. tie quarter-over-quarter. in flow, going free to it take that just to to programmatic we're

Operator

line Jefferies. with question Katz David comes from next the of Our

David Katz

in-play the feels getting which around trajectory that Going example, see in betting. around back I've whole in you a appropriate times, and it, more Can kind it U.S. just in a towards now, is levels and for you puts Europe? we the takes question to to the that play discuss volume see, as but of bunch asked of mix

Jason Robins

Yes.

far, by that we've lot for a have proud amount more during highest think obviously and way, is there's very in-play things. a industry's made ad can feel I the we that the the product, of a Super there. Bowl. we still tremendous but we had couple including One -- uptime markets, of also do

And area I so inflate that's low want and bet broadcasters the a streams micro markets think people customers latency with to working the big on more Obviously, to for really if beyond Secondly, aren't the of get basis. available and streamers product, a try to that bed broadcast the can't up, focus.

It's have you're behind to when of which broadcasters makes on play just think it watching don't you seconds XX want. experience the XX, as leagues hard certainly not I instead the good almost and what the app is game, and the

can help, too. I something, that's think, that So

experience with really their ecosystem and bets. it's and the they're products that in the to the It's working making making those. when of on up customers allows sure both to sure So industry an stakeholders RM, other creating want running then and the for make to customer help best we're us, building maximize the

David Katz

and urge. may to just for have up far I Perfect. sort quickly given think is seen so did can you guidance How been strong of the urged the the raise follow about urge there My really Alan. an we've And if year-to-date. the sense start resist

Alan Ellingson

progresses. we've let's seeing think very obligation consistent we strong and year. early what don't the in feel really trends, it's of and to the let's in said see with year the stay numbers. the get but ahead any how past some I We're positive good

Jason Robins

we're And Yes. range, too. providing a remember,

some kind into moving built already there's that. there's of parts So -- some

think, QX, on way, like too. very we still early can are Alan we saw So And we EBITDA upside as We I provided noted, in side. But the hopefully, as very other in it's there's comfortable year. with things swing the the feel range there. some the

So out ahead get our skis. of I to didn't want

Operator

Deutsche with question next Our Carlo line the from comes Santarelli of Bank.

Carlo Santarelli

Jason this Allen, one. take whoever wants to

for XX% the if the handle OSB to on -- parts promotional perhaps your of think slightly year. XX% hold. fair head I kind at other that in little look the moving kind savings improvement on should that a revenue would a some start you gross plus have is imagine the line? be and kind a in revenue and guidance, Is just of the higher drag target of in going of XX% to bit that's I and impact perspective, factor you From the amount component structural than a with net revenue aggregate have the reconciliation? from obviously, OSB would the something that

Jason Robins

that's Yes, to Obviously, we listen, I there I range guidance, upside. we do we're it. beat good. there's pretty provided out and mean, the think a always feel on trying some

better drive the promotional expectation, for of term, how number to improve in to and also acquisition both up line That's have improve long been have is initiatives than planned see the customer can Obviously, handle We something promotions to year, in but great the throughout a which our performs. meantime. top that's GGR been efficiency. we'll

So I we for really And out up also lots prudent think lots are think. initiatives us but that hopefully number to a beat that it. us, making there, have But sure it's lined a do, of upside. help of guide I put to about also

Carlo Santarelli

for somewhat you the could are or sales could, if cetera, just that the come drove XXXX? those acquisition through we some of activity on in the later about Clearly, line then I as move some perhaps up. costs down guys meaningfully that And marketing. year, follow-up et of we and year? How something year-over-year. Helpful. activity, X kind that even expect thinking adjusted kind Is could

Alan Ellingson

we optimize of those to way XX%. especially of some ultimately think costs, we close an long is EBITDA about are around term, the The trying margin in Yes. to

fluctuations streamlining place to the and a up see cost deliver going fixed can EBITDA the to so communicated. you're where we're to we we've organization And down and on acquisitions our optimize pick focus going to some and up continue and organization as margins get our we to

Operator

next with UBS. Farley comes Our of question Robin from the line

Robin Farley

changed. I is, at the Can quarter would betting us your a the looking hasn't in 'XX, guidance, that for presumably, your Just it's And presumably row, but revenue think into to be live second help you raised about this what you think, XXXX? push adding guidance the space. guidance EBITDA

Jason Robins

Yes. It's a great question, Robin.

in be beyond. that, quantified XXXX think call, live the this but we're positive noted betting Alan in do So on we haven't as year, neutral while that will the EBITDA we EBITDA the investments and making

at but right, absolutely you're So it time. we haven't quantified this

Robin Farley

it then Okay. was as a shareholder quick I in your letter. think And follow-up,

use exploring suggestion repurchase? have mentioned opportunity that to that think how the debt use opportunities You we that about in now of markets or Or Would there? you cash additional share flow. to debt? the kind be for should Is

Alan Ellingson

do term, mind just sheet the way the initially, in Long debt growing to think and just our look to the with balance corporate general market use on it. so. establish it business specific and right I to for optimal will our the presence focus in purposes we'll way no at obviously be of

Operator

Robert of line the from Fishman comes question with next Our MoffettNathanson.

Robert Fishman

in potation can runway of some in about older of the vintage how penetration you share Given years states? newer compares the that maybe acquisition, your states? just some the to higher current in customer more levels of And ahead. for continued the penetration And the strength

Jason Robins

as I you ramp you're quickly the this and remember, mean, didn't earlier as of have. I as some states may why newer is think the probably asking states

That highest population that though penetration. little Right been for get still to they're around our oldest So states for at there, Jersey, while. growing. to took longer it some states particularly states even it get to said, of little a population a overall New which in longer a penetration, like our typically are took the cases now, it's

us, be. just And it's do to for some us. continuing know we where as think the I we product wide the don't I tailwinds and a secular build about great to a ceiling do grow. entertainment behind I will provides audience appeals and that think think that, variety customers could hopefully, So of there's

types these on do tend more more participate to and tend generations younger think mobile. online activities I and also in it of to

time side in So that our is I think sense. on

Robert Fishman

follow-up sponsorship ROI maybe And discuss your of the quick then. strategies. a you Can

fight. Tyson the from Netflix sign-up record all that saw You

approach So change thinking XXXX? this how does about your

Jason Robins

mean, always get kind for was fair, fight up. that. the I had audience to opportunities was to don't We're in Jake where I hard think to lightning traffic appeal That Paul one, it Netflix, of bottle. to the anyone that mainstream expected including and have keep looking like a Tyson be I they mean, point to almost the unbelievable it

you're how make how of So establishing a to we then It's way with surprise then we kind think for going to even but that pleasant events on if good big we of want and great about do establishing ROI. know and to they was hit at is X great companies framework scenario, great that that. of really we're always sort getting the a get sure that put kind And that on was count But don't it us good hit relationships a look that. on case base not we that deals. I great, so in

So upside often, it. And can't not but great, count to so happen time it. very to from like something have happen fight so happen that with that's you we how then can on going about you all if been the what the that's Tyson the has happened think

Operator

Goldman Sachs. question the next of Miller line Our from comes Ben with

Benjamin Miller

think wanted live about up of new highlighted wallet was questions, area into share, greater share customers about potentially between versus existing curious prior how model wallet think growing customer to that, betting with I just an follow I'm in you the of adoption live as on focus you cohorts. it the betting unlocking translating given how

Jason Robins

going not going the to are and customers a to live Most prematch. right? it, of part bet bet as big come they're first a it's make bet, think in I

our if more the And XX% digital existing to betting. Sportsbook. sort continue about XX%, really grew to look for from story, to year live of is, U.K. of it's adopt it you that's It getting where the as and point customers the each customer trends overseas, adoption So you revenue existing noted, in more at right? now

like there's definitely Bowl had The than the So for in sports are feel years. we a saw lot U.S. this here. prior year more well we kind upside Super of that very in betting built in-play

to think just as that was going that to sign. continue I ways create very And goes customers. encouraging I So to we're better appeal think on, And figure also out a of that to time products try going are types live customer lead try base, going they're the new to to natural bet people evolution sports, and maturity new more the to will and betting.

Benjamin Miller

And then subscription. a Great. just follow-up. as maybe on Plus love I'd the just DraftKings

York is Just any that you New just subscribers any between about that early in pilot of think that economics learnings And into offering translated part customer second behavior? the learnings of and from versus the how the change nonsubscribers. how

Jason Robins

it's a Yes, question. great

So a limited it's it's and pilot. really early very

data yet have what enough sure are wanted So seeing potentially population at we I know going think to the this to from amongst economics something we but we're some because real we point, what that on early don't have I make don't could interest think out broader at. it's the shake

part of the sign to because then why -- that alter pilot had didn't we wasn't economics we a it customers bunch kept up for So have to materially a something is out. very it limited backing of want we

is gather then we and So want of back a kind we any, this broader that. kind to need if and what to do something roll program to a And make before really, out audience? run of we're it to And to one the that that we continue thinking pursue? this take tweaks was let going data to the say, on step

Operator

of the Our with next Stauff from line question Susquehanna. Joe comes

Joseph Stauff

think in, it -- how products but can for thus and gray on Jason, budget or how And timing throughout new what how about live give then the views that? markets is of markets before taxes. instance, to I new was potential in like layer process I state markets, you if what can, chunky, wanted summary to new to far March of you us Madness, terms and XXXX, to ask efforts your wondering you say, about think about black reduce the

Jason Robins

Yes.

on So the news between anything ultimate going kind come of that and including a move see on there's and decisions. is whole decisions happens it's when of first lot the tax legislation in you're -- things this get states, but period else question, to where happen which states forward lots of made that to out other sausage-making want with -- now new

the obviously right getting the with the and of we're made in So to correct push our forward helping policy believe have lobbying the billions billions we're reasonable is with able policy, team make we regulations broad which legalization which points of that generating that ramp trying that to market, so the we're our thick and that every it sure with is like is tax to legal operators us in compete dollars rates are year. and

with really what's few is to of of legalization lot happened a and the catching the lawmakers. of years, impetus the that last story casino similar was what sports fact over fact, attention It's illegal In interesting the from where the degree the already. has which for it market been a to that's actually came lot online betting, a grown think very I

tax market made consumers revenue. a So generate illegal protect ramp it the doing and activity that such are sense it so many people to and already in in

that market. about I the think thinking are more things size So and scope policymakers aware more of do of those are and becoming and illegal

that was it any typically votes controversial. campaigns during election issue don't little of of year year is up the going year each we're mildly news also take hard. think there's on next getting now these year do states. in said, there resolves we're are see months. bit to when of to ultimately and to and headlines. distracted election have an People And how between quite it out a terms gaming I better a over end, just legalization. obviously, want and the of tough But Last even the sort going lots few because was bit they plays in a So it in be That and will be

-- little think at then what this year, hope. will more your be again? bit success my least that's was And a I second there question sorry, So

Joseph Stauff

Yes.

on knowing terms the and things so -- of the about effort how think side forth new to yes, in timing? Just products sort live of the of the

Jason Robins

Yes.

we case that to new or the So year. the around time throughout launches we launches. every season will things though It's events try introduce year certain certainly big

out some of So beginning you'll the stuff baseball season. at roll see

also You'll see MBA season that out things, year true for NFL biggest our and of before planning a some across goes is the us of then for possible to things this lot for and NFL time product effort The just is after we roll the have and best product. sure that. into making the

it I some rollouts before -- steady, right that's right is So the particularly before NFL the think you pretty will season see be season. but will big

Joseph Stauff

can of overall hold, favorable Madness squeeze X kind March year, Could remind unfavorable. just last that, just say, I one. quick you of versus And us, was

Jason Robins

unfavorable was year. It last

Operator

question next the line comes Lampin from Our of with Clark BTIG.

William Lampen

products embedded give more Jason, color us Super more you could Bowl mix question in -- a assumption the the that I embedded shift give Just curious those some if and to has expectations. a leading whether improved trends behavior that's engagement? with curious parlay You edge been with player around shifts called as consistent of I'm ask game framework and same you bit have seen response around for you obviously what's the little in or could us favorable out data product if traction points structural a wanted a around trends. hold from for to standpoint?

Jason Robins

And before our for is great what baked the customers would to better bet far which what We've than season. we little merchandise season. better those happen to. in why effective it's products not seen structural NFL through Actually, continued of to got both and terms today bit hold we of NFL thus but better also NBA season way, a this guide. than has -- I in a lot and thought expectation how in last how date, expectation before dividends, want, been in the products to mix better of that market should say, expectation and a improvement MBA in just than paid MBA think, more terms I really year-over-year NFL in learnings that Yes.

do lot been of And on that's because to there's still upside it a week, are and to the passing improve. So teams that. continuing great seems each our like numbers work

very for bullish XXXX, the we hopefully, outlook structural we're better. So and can on even for hold do

William Lampen

That's capital allocation I great. ask a question, guess, second international and expansion. wanted I potential to address,

a more you situation. you now that years -- a place, You've before? to where consistent global for of point little maybe business a now U.S. of But you we're right It bit opportunities over are be that to progression believe in that in time think prepared with Is weren't there right and are themselves time mention seems around that Or you the to should more do response saying just next in a up while this at been and your presenting deliberate. drafting the movements, market is enterprise. the remarks. time couple a of this came that it's

you Just that. give any curious if on could color us

Jason Robins

meant primary the be lottery been kind some of international like of stronger space. U.S. have. I to of don't which same our to lot overseas, doesn't mean that could mean at interest. strategy. true actually, that lot deliberately the and useful going it be deliberate gaming other has ever digital quarter It's but story always focus, remains our have a building we're gaming places is about, a it this opportunistic. on to courier I very toe we in be term, more that's that OSB we're of we upside online into it that any than the is I overall gaming within course, We've think of technology that [indiscernible] be we're we looking And something are and strategy, immediate U.S. excited the dipped

from more now? it to feel much think in we that on do emerge, than ready be more huge right do eye should very also U.S. So that's fortunate Or it. and and less But we continue for opportunistic be something us, the that mean in opportunities for that now? the that, a like, doesn't that we for And if years just international the to I we front X our need have It's hey, it's let's the something keep to horizon. runway Canada. like us have We're go that. in near-term on

So expansion. there's a not need to rush like burning really international

we'll where have And may to on something we're be the XX more, opportunity the hey, to say, much just U.S. out we just now, if But and look, next there? it's it we figure day over right not, right there focus going is out months. this So do, continue it's the a to

Operator

from of comes Dan the Fargo. question line next Politzer Wells Our with

Daniel Politzer

you you And all how you your example, brand check is obvious if the success either your sports opportunity, Golden iGaming. figured about just additional and there's brands think now think getting head's think digital a I First, for both for where of had all, your do -- that power but do And vertical? on an there I at in Nugget the at and about right there.

Jason Robins

Yes.

strong iGaming think a with Draftkings I sports, also great incredibly brand as your golden part your just the question, I nugget is the well. has but not of been success. with first for think And

the has of Online also the in we our product, has we've think building And well. and as made and improve the which improved really think think helped helped Golden I that headway trajectory the a brand I brand iGaming really I Nugget brand ton of market. growth that share

we're that It's But actively built terms we've of front don't think looking at, I and other in something model. that see into I at not couldn't we moment. out any capability proven that do the ends reason plug iGaming. So

work, it's believe effective think is in less there than I strategy more to side, iGaming It are that sports. it sports doesn't probably it mean but the proven. it's in On couldn't reasons

state. on more focus we why iGaming that's So

Daniel Politzer

then And of percentage taxes it. XX%, filings, XX%. I back into what a to of was revenues. were in out Got can gaming kind you as think your something I coming around

fees As I or think are processing gaming adjusted think out-year that as like I here while baking terms the go costs targets market taxes sit ago, cost, XXXX, about laid for of margin some And you out maybe today, guidance you of even goods your sold, are anticipating about in other as taxes? a we fees. access of gross of your platform up? you within kind And mean, maybe what cost you that in,

Jason Robins

lower than it's Yes, we -- a what you said. bit

not increased something be kind we've have anything legislatively it's what XXXX in tax XX%, forecast. We're in in legalization until year. higher changed rate taking that It's of reason has needs But clear actually bake there's now, is XX%. our no the same this And change our sight no line that approach state tax it. on So not to rates no change taxes. going we because to to for of or assumed we're right

in and the there, obviously, change changes additional We but very that don't we standpoint, any from either. have a have didn't in any on So additional Missouri in are we that a government could launch something something we and tax terms from focused standpoint, of don't legalization. affairs guidance bake and regulation

Operator

next line Our the comes question Jed Oppenheimer. from of with Kelly

Jed Kelly

more not an you've your to where And to competitor? in just Can want where a relative cross-sell effective update It the I being recently does is your like is your product give or you give you sports pocket Jack Jack you iGaming invest us -- you states is like legal. sense earlier. chief seems touched that pretty betting think Great. pocket know MBA in but on that MBA product on

Jason Robins

Yes.

the customer think $X.X of Jackpocket and last really acquisition jackpot great has been had billion [ this during in I run. strong ] also terms both cross-sell we

there's think I there effective away. one we and we're I going also opportunity if iGaming where to higher right a invest betting a doing cross-sell to because think in more feel in So that that's are are there's think Jackpocket. term But states base because great immediate we And legal think customer to can excited what do the we LTVs similar it's build that be and the about more probably us, of that that can for room there. sports I states reasons efficiently in certainly, the we

now. think And NBA X think have or as probably year is I that, anyone that terms In wouldn't ago. a the of as said in we I market product, right good product something our the is

definitely now, But I year not there. out not else maybe X good, a think as ago. better than ago, think I years anything if right it's

the about on I team has So our actually the where the the product clear over of life best-in-class and rest technology made. and proud advantage I progress progress of upside, a have industry. of the particularly really a And we lot there's think excited side, think

Operator

question of Barclays. from with Montour Brandt next Our comes the line

Brandt Montour

you in Jason, us? just you you the one But flesh I is made ever just you long-term parlay competitor part a than I'm of out growing ceiling a mix of want that comment? ceiling comment that to of Is drill your just their Is sort maybe thought. comments for in the just on your chief the is mix remarks the on. that that sort see higher. prepared focused for hold that Could part higher

Jason Robins

because we really of saw year. the of Yes. increase It's amount this

you at it's a curve if that and much the taken. of think how look lot improved, actions of we've obviously, and there's sort I

look So it's it's it's It not like it looks slowing doesn't just natural like accelerating. down. evolution, but

where the conservative but is, plan. fairly in we are know don't I So our ceiling multiyear

quantified more that think number, it, but actually conservative we have by competitor. out some we the thrown so than our give been I numbers certainly were So to haven't I chief that of a want

that So achievable too. too, that probably if think that's they're of line that gives to sight I us, us that, seeing for confidence,

Brandt Montour

new we if promotional any legislation the Okay. you're of a any And if on could then out state couple follow-up the about that -- heat iGaming. that's could quick further up Great. next seeing that Curious you're concerns get environment what years? just don't get over if something having if there. in

Jason Robins

'XX mean in in I so. has think intensity. don't actually promotional iGaming I year-over-year declined

in hasn't the Now it iGaming as X, X legalization function didn't but a more fact down of a lot much been of new sports, that the there go years. that's as last

sports markets having the years, going years. much early last naturally much in So acquisition since existing and more decline have customer launched couple their of is in to with more of the newer customers they're the relative to stronger

X, decline to really seeing XXXX side and in in in continue but the [indiscernible] I iGaming but a to between that's down, expect difference [indiscernible] we sports of went to expect So grow, what terms I both you're and iGaming obviously. decline. the think promotional terms of

Operator

question the Truist next Jonas of with Securities. comes Our Barry line from

Barry Jonas

tax able to can you there? to what With the do new higher been try in to now, or you've about bit offset the place quantify a hit maybe talk for Illinois

Jason Robins

in some the state. like We've things done promotional and reduced marketing intensity

it, completely to from continue to the maintain $XXX that didn't done has Illinois other able tax billion the it. well so helped. perspectives So even million $X Obviously, that business guidance with but offset it has we were to that actually

business. -- excited overall the of good feel we able but like very that I I mitigate it, of we're very able we the trajectory about So to some said, about all in And mitigate and Illinois. to of it weren't

Barry Jonas

this for a can just what And launches with launch, frame Missouri from expect we the helpful. then or prior even investment you helpful to frame and to be sily-sized it would investment the That's what quantify the perspective? maybe the should it in past CAC year, relative

Jason Robins

to year Yes. We're less the not exact of The earlier of now have number sort make up, the more is because timing less because hit. year, we'll time an the in up still an on it out putting the air. is there the the EBITDA in overall it

put with we'll before wait So we're soon there. we out a as share until do, launch they as set a that number they going have everybody. But date to

Operator

from line Chaiken of comes last the question Ben Mizuho. Our with

Benjamin Chaiken

to any one First I'll you DraftKings the to wallet This crypto have among expenses little can both to provide other acceptance thoughts you idea be items, do out would accept a would of coin a bit With social when question money of but in and the payment, or fully of fish other and fry, recognizing color being you what and reduced move form great. may might political stable envision there, was out on but time take like be a shot. payments. feels currency,

Jason Robins

It's I it's the It's a a certainly we're regulators to because but great crypto something at. But comfortable certainly typically and of Yes, product it's with obviously, lot question. coming. question. looking road get comfortable. deregulation, pro states, need entirely in at they a the I -- regulators federal around not affects it's are still cautious map it getting a level, also certainly perspective, that there's crypto think, state's mean,

it are there to of moment. handful So at the a that only are states open

to I think But opportunity. serious huge take a like feel of we number doesn't if grows a more that it it's larger something at. a So that look states,

Benjamin Chaiken

is fair that or more also seen any Jackpocket we've SPXXXXXXXXX acquisition you're it. 'XX? from Understood. waiting promotional quarters. the and that to year your intensity to the a earlier the spend hear But Am in to little call. external correctly? environment I that guess marketing it I I then to of? about cadence And is being aware some And to allocating the the comments on to say down in allocated Appreciate in then you've last thinking guess, high-level customer few embrace be then My stronger

Jason Robins

Yes.

to little and really and jack OSB have be pocket. we So pretty a added year-over-year. gaming going steady it's is

more saw increased to everybody it get this, that they'll if ticket, least tickets, pretty they'll really we're Jackpocket. run, me, during which X be mean, or acquisition I add going again. jackpot same jackpots the mega think which dependent to if but -- to we make more, the this happens on get they but little people less or And that's last customers strong and environment. So which decreased or bigger. will. more I efficient price hopefully is knows But of it's want the will a that customer which means because prepared so which spend I sure either excuse less, of millions great. then people be X know roll will means we don't a at hit spend means a really the lot

lottery think that's actually positive for I digital development a So market. the really

Operator

now back the like closing question-and-answer remarks. session. for hand I call would over the This to Robins Jason to concludes

Jason Robins

your thank for Thanks, everybody, call. today's for on beyond, and Thanks. and trajectory continued We're really excited joining us XXXX you the for about support.

Operator

your you Thank for This concludes conference participation. today's call.

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