Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| We feel like we have the best in the industry cross-sell rates |
| I am unbelievably excited about the plans we have in place to continue serving our customers and growing our business |
| I wrote that our culture and people positioned us well to execute, which effectively made 2023 a proven year for DraftKings |
| So as you saw, structural hold in Q4 was better than we thought, and that gave us conviction to increase the embedded hold rate in our 2024 guide |
| More importantly, we improved adjusted EBITDA in fiscal year 2023 by nearly $600 million year-over-year and posted our first two adjusted EBITDA positive quarters in company history |
| Beyond our financial highlights, we improved our product and customer experience and also made a number of operational improvements to better serve our customers and operate more efficiently |
| We gained share, including taking the number one position in combined OSB and iGaming gross gaming revenue share in the US for the third quarter |
| And I think we've done a good job doing that |
| And I think whether it's BFS to OSB and iGaming or OSB to iGaming or any of the above, we've been able to achieve much higher cross-sell rates through our efforts |
| We're -- I think there's so many different dimensions across the products and across the entire customer experience that have helped us improve our retention |
| So it's really exciting, and we believe it will be a strong performer for us |
| In the past, we've been able to drive growth and gain share, while simultaneously becoming more efficient |
| I think it's all of the above, Chad, where the improving promotional reinvestment rate due to our mix of existing versus new customers, our improving hold rate and then just ongoing optimization of our COGS vendors are all driving that improvement in gross margin rate |
| So that was really, I think, a testament to the great work the team has done over the last few years to drive more diversified bets and more parlays |
| And I think Jackpocket is very well positioned for however it evolves in iLottery and other things |
| But whether it continues to be the current model or whether it changes, I think that Jackpocket is extremely well positioned and is a very unique asset |
| But I do think it provides an ability to do so, which is certainly an advantage over time |
| Importantly, this is not just a new product for our customers to enjoy, but really a way to strengthen our core OSB and iGaming position in the US by optimizing our overall LTV and CAC |
| Really, 2023 was an excellent year for DraftKings, and we're so excited about the opportunities in 2024 and beyond |
| In closing, 2023 is a fantastic year for DraftKings, yet I believe that 2024 will be even better |
| This trend positively impacted revenue and adjusted EBITDA by $53 million and $38 million, respectively |
| Most importantly, I am excited about the quality of the team we have in place, and I have no doubt that we will continue to execute very effectively against our key priorities this year |
| Definitely, I've thought about it more is they're building out a great lottery experience and by plugging in the iGaming experience that we've been able to build out in the OSB experience that we've been able to build out, to the lottery experience they've been able to build out |
| As Jason mentioned, the organization is executing very well, and that is showing up in our results |
| In fiscal year 2023, revenue grew 64% versus 2022, and adjusted EBITDA improved year-over-year by nearly $600 million versus 2022, which resulted in year-over-year adjusted EBITDA flow through percentage of 40% |
| Adjusted gross margin increased nearly 200 basis points as we delivered higher sportsbook hold percentage and improved our promotional reinvestment for OSB and iGaming |
| Right now, we're seeing really good early signal, very strong retention numbers, good monetization |
| In the fourth quarter, we continued to generate great performance across our core value drivers and produced more than $1.2 billion of revenue and $151 million of positive adjusted EBITDA |
| Better customer acquisition, retention, and engagement resulted in higher than expected handle for the quarter and positively impacted revenue and adjusted EBITDA by $93 million and $42 million, respectively |
| Structural sportsbook hold percentage was 10.4% and well ahead of expectations as we continued to improve our parlay mix and optimize our trading capabilities |
| Statement |
|---|
| Our actual sportsbook hold percentage for the fourth quarter was 9.2% due to sport outcomes, which were a headwind to revenue and adjusted EBITDA of $175 million and $126 million, respectively, compared to our expectations |
| And if you isolate to the retention side, to existing customer promotions, those were down even more significantly year-over-year |
| And I think where you're seeing some noise is just from some of the outcomes and also a blowout quarter from customer acquisition |
| But if you look at sort of the adjusted for outcomes numbers, it was down to 300 basis points year-over-year |
| And just for my follow-up, if we could talk about Jackpocket, the business today, our belief of this is probably is losing a little bit |
| And at the same time, we know, obviously, that there's a lot of disruption going on in sports media |
| I noted this earlier, I think one of the reasons that we're a little cautious with holes is that, there are other things you can do to improve modernization, like pushing live betting more that might actually not increase hole but still be very good from an LTV standpoint |
| And I mean, we had the worst two-week stretch of sport outcomes from a dollar cost basis that we've ever had as a public company |
| Also, promotional mix continues to trend down as we increase the ratio of existing to new customers |
| We also continue to face new competition as we consistently have over the years |
| What we ended up seeing was that, so much federal money was pumped into the state's coffers that that really dragged -- over the next few years, it kind of extended that time line a bit |
| But even despite all that, when you adjust just for the outcomes and leave the acquisition numbers in there, it was still 200 bps to 300 bps lower year-over-year |
| And so the draw for that reason of new tax revenues from online gaming isn't as strong if you just launched online sports betting and you're waiting to see how it's ramping and you're still getting more and more accustomed to and comfortable with it |
| We think there may have been an error in the Illinois report for December that overstated it, so that's something we're still digging into |
| So I think while it could happen, it's going to be a much slower burn |
| I was actually pleasantly surprised as many states as they did ended up doing iGaming at the same time |
| First, for a fixed amount of promotions, obviously lower hold due to sport outcomes |
| So overall, we didn't see quite the sequential improvement in promotions that we saw a year ago between the third quarter and the fourth quarter |
| And right now, I think given sort of the pace and cadence of what we expect state launches to be in 2024 barring some big surprise |
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