The following is a summary of the DraftKings Inc. (DKNG) Q3 2024 Earnings Call Transcript:

Financial Performance:

• DraftKings reported a revenue increase of 39% year-over-year, attaining $1.95 million for Q3 2024.

• The company observed a $59 million adjusted EBITDA loss for the same period.

• Despite challenging NFL sport outcomes early in Q4, the company reiterates its fiscal year 2025 adjusted EBITDA guidance of $900 million to $1 billion.

• Adjusted gross margin improved by 300 basis points year-over-year, driven by optimized promotional reinvestment and increased customer acquisition efficiency.

Business Progress:

• DraftKings launched new and exclusive NBA markets and expanded their in-house same game parlay offerings.

• The company was recognized as the number one overall sportsbook app in the U.S.

• Missouri's legalization of online sports betting is expected to positively impact the company once operational approvals are granted.

Opportunities:

• The company introduced fiscal year 2025 revenue guidance predicting year-over-year growth of 27% to 35%, underpinned by structural improvements and market expansion strategies.

• DraftKings plans to leverage the incremental growth from newly legalized markets like Missouri and optimized product offerings in sportsbook and iGaming segments.

Risks:

• Early in Q4, customer-friendly NFL sport outcomes created revenue and adjusted EBITDA headwinds, demonstrating the volatility and impact of sports betting outcomes on financial performance.

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