管理層發言
Good morning, everyone, and thank you for joining us today. Certain statements we make during this call may constitute forward-looking statements that are subject to risks, uncertainties, and other factors as discussed further in our SEC filings that could cause our actual results to differ materially from our historical results or from our forecasts. We assume no responsibility to update forward-looking statements other than as required by law. During this call, management will also discuss certain non-GAAP financial measures that we believe may be useful in evaluating DraftKings' operating performance. These measures should not be considered in isolation or as a substitute for DraftKings' financial results prepared in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, slide presentation, and business update, which can be found on our website and in our quarterly report on Form 10-Q filed with the SEC. Hosting the call today, we have Jason Robins, Co-Founder and Chief Executive Officer of DraftKings, who will share some opening remarks and an update on our business. Following Jason's remarks, our Chief Financial Officer, Alan Ellingson, will provide a review of our financials. We will then open the line to questions. I will now turn the call over to Jason Robins.
Thank you, Mike. Good morning, everyone, and thank you all for joining. DraftKings set records for revenue and adjusted EBITDA in the second quarter as revenue growth accelerated to 37% year-over-year. We are pleased to be maintaining our fiscal year 2025 guidance with revenue expected to be closer to the high end of our range as strong underlying momentum in the business and sportsbook-friendly outcomes in the second quarter position us to absorb an exciting new state launch. We are sharing five key takeaways today. First, we are in the early innings of adjusted EBITDA growth. Product enhancements are driving strong revenue growth while prudent cost discipline and efficiency initiatives across the organization are delivering meaningful adjusted EBITDA margin expansion. Our second quarter adjusted EBITDA was over $300 million and double our prior record. Looking ahead, we have conviction in our profitability expanding further as we drive towards our 30% adjusted EBITDA margin target over time.
Second, DraftKings is positioned for success this fall with the upcoming NFL and NBA seasons. We continue to innovate our #1 rated sportsbook product, delivering an experience that moves uniquely at the speed of sports. This manifests in a best-in-class live betting product, along with hyper-flexible merchandising and social features that allow customers to engage with the biggest sports narratives as they unfold in real time. Third, sport outcomes tend to normalize over the long term, but typically benefit either the sportsbook or our customers in the short term. In May and June combined, sportsbook outcomes benefited the company and added $110 million to our revenue. Fourth, we continue to monitor events surrounding federally regulated prediction markets and are actively exploring ways to enhance shareholder value through this opportunity. As always, we value our relationships with both industry stakeholders and policymakers and we'll work collaboratively as we evaluate next steps.
Fifth, we continue to allocate capital to target the highest risk-adjusted returns and maximize shareholder returns over the long term. In the first two quarters of this year, we repurchased 6.5 million shares through our stock repurchase program while continuing to invest in organic growth initiatives. With that, I will turn it over to our Chief Financial Officer, Alan Ellingson.
Thank you, Jason. I'll hit the financial highlights, including our second quarter 2025 performance and our fiscal year guidance. Please note that all income statement measures discussed, except for revenue, are on a non-GAAP adjusted EBITDA basis. As Jason mentioned, in the second quarter, we achieved company records for both revenue and adjusted EBITDA. Revenue increased 37% year-over-year to $1.513 billion, and we generated $301 million of adjusted EBITDA, representing a 20% adjusted EBITDA margin. Sportsbook net revenue increased 45% year-over-year, which exceeded our expectations. Net revenue margins increased over 230 basis points year-over-year and also set a company record at 8.7%. Sportsbook handle increased 6% year-over-year to approximately $11.5 billion. Live betting handle increased 16% year-over-year as we continue to innovate and extend our lead in that category. Structural sportsbook hold percentage increased 100 basis points year-over-year to 10.9% and actual sportsbook hold percentage exceeded 11.5% due to sportsbook-friendly outcomes.
Our parlay handle mix increased 430 basis points year-over-year. Sportsbook promotional reinvestment as a percentage of gross gaming revenue improved year-over-year by nearly 600 basis points due to both sportsbook-friendly outcomes as well as continuing optimization of promotions. We also expect to continue benefiting from existing customers accounting for a higher percentage of our overall customer mix. iGaming net revenue was consistent with our expectations and increased 23% year-over-year, driven by strong growth in active iGaming customers. We are continuing to see engagement with jackpots increasing rapidly as gross gaming revenue increased over 100% year-over-year. Our adjusted gross margin increased to 48%, increasing more than 400 basis points year-over-year as a result of higher sportsbook hold percentage and improved promotional efficiency across our product offerings. Our operating expenses, including marketing, continue to be in line with our expectations.
We are leveraging our scale and brand to drive highly efficient customer acquisition while continuing to exert cost discipline across the organization. We are also already seeing some benefit from utilizing artificial intelligence and other new technologies. Now I'll touch on our fiscal year 2025 guidance. In May, we guided fiscal year 2025 revenue of $6.2 billion to $6.4 billion and adjusted EBITDA of $800 million to $900 million. Today, we are maintaining those ranges. More specifically, we are on track to deliver revenue close to the high end of the $6.2 billion to $6.4 billion range due to sportsbook-friendly outcomes in the second quarter as well as continuing strength across our core value drivers. We are on track to deliver adjusted EBITDA near the midpoint of the $800 million to $900 million range as our higher annual revenue positions us to absorb our anticipated mobile sportsbook launch in Missouri.
Notably, our guidance now includes anticipated financial impacts from DraftKings launching mobile sports betting in Missouri later this year. Our guidance also now includes anticipated financial impacts from higher tax rates in New Jersey, Louisiana, and Illinois. The company guidance for fiscal year 2025 does not include the potential launch of a predictions market offering. We are also providing the following fiscal year 2025 guidance detail. We now expect our sportsbook net revenue margin to exceed 7.5%, ahead of the range of 7% to 7.5% that we had provided last quarter. We continue to expect an adjusted gross margin of 46%, an increase of more than 300 basis points year-over-year compared to fiscal year 2024. We continue to expect stock-based compensation expense to represent 6% of revenue in fiscal year 2025. We continue to expect free cash flow of approximately $750 million in fiscal year 2025. That concludes our remarks, and we will now open the line for questions.
分析師問答
Jason, I want to kind of start off with a multipart question on prediction markets, if I could. So three parts here. First, just how do you think about sizing the potential investment or opportunity for DraftKings at this early stage? Second, what's the importance here of kind of owning your own tech stack? I think we see some parallels to the way OSB was built out. I'm kind of curious for your thoughts there. And then lastly, just how important is it to be a first mover, especially if there's a bit of a land grab here as some of these platforms start to ramp up marketing around the NFL?
Thanks, Shaun. So let me kind of take those in order. I think total addressable market (TAM) is a tricky question because, obviously, the products are at a very nascent stage. So it depends on how they get built out. But I think the existing sort of states that we have live OSB in provides some kind of benchmark as you think about TAM. In terms of the second question on tech, I think it's too early for us to say. We're obviously evaluating different options and following the space, but we're not really intimately familiar yet with what the different technology components are. So really tough to say. And then I think on the first mover question, I do think that being an early mover in a space like this can be important. I also think that being a literal first mover may not be as important, and there are downsides to that as well. So we're evaluating. Obviously, we have a lot of stakeholders, state regulators, relationships with tribes, others that we want to make sure we consider as we think about what our different options are, and we're keeping a close eye on it and figuring out what we want to do.
I wanted to mention that you have already explored prediction markets extensively, but I believe there are several issues related to that for DraftKings. Have you investigated the crossover customer? You briefly touched on the relationships, which I believe is one of the key issues. You also mentioned state regulators. Are those discussions progressing? Or do we have any updates on their status? Ultimately, I’m curious about how you’re approaching the stock and cash flow. Today is a positive day as we get to slightly raise numbers for one of the first times in a while. I realize there are many questions in there, and I apologize for that.
Well, I'll try to answer them. But I think a lot of the things you mentioned are considerations in why we're taking a measured approach as we think about it. And obviously, hard to kind of comment on specific discussions that we may or may not be having. But I think you can assume that at this stage, we're more in monitor mode in terms of active discussions like that. So a lot of what I think we need to see will come from watching how things unfold with others that are currently offering prediction markets. And I think we'll kind of have to see how that goes and evaluate it. It's all happening in very fast real time. So definitely a lot to think through.
As we think about longer-term opportunities to streamline costs and/or offset some of these tax increases, can you just help us think about what opportunities exist within state access fees, data rights fees, and/or payments or otherwise?
Yes, I agree there is significant potential for improvement across our COGS stack. We believe there is an opportunity to lower rates on some of our older agreements, which would benefit both us and our partners in terms of revenue, albeit at a lower percentage. Additionally, we haven't dedicated as much time to optimizing payment processes as we could, but we know there is substantial value to be gained there. We see these two areas as major opportunities for growth. We are also continually working to make our systems more efficient to ensure that our Amazon Web Services costs do not rise at the same rate as our revenue. Various AI initiatives we are currently pursuing can contribute to this efficiency and help manage fixed costs. While we are enthusiastic about our revenue growth and the demand we've seen this quarter, there remains a lot of potential on the cost side. Our teams are enthusiastic about AI, and I believe we are just beginning to tap into that potential, with significant breakthroughs expected in the coming years.
I have two questions. Jason, I want to discuss AI. You mentioned that we're just beginning to explore its potential and that there are significant opportunities ahead. You've referred to this in shareholder communications before. Are we at a stage where this could start contributing more visibly to revenue rather than just helping with cost management? My second question is about iGaming. You mentioned facing some challenges and adjustments regarding promotions and rewards last quarter. Now that we've observed a revenue increase, did the adjustments yield the expected results? Was the benefit fully realized in the second quarter?
I think iGaming is starting to ramp back up to where we want it to be, but still not quite where we want it to be yet. So the momentum is there, but I do think there's more work to be done, and I feel like there's more upside to the rate that we're growing at now. In terms of your first question, I do think that more of the focus because it's just something we could do more organization-wide is on the expense side. The simple sort of areas are really any kind of workflows that are manual now, all of those can be automated, and we don't necessarily need to rely on our engineering team to be able to do that. We can rely on those running the programs and those running the processes to do it with the tools that we've provided them. And then separately, we're biting off usually, we kind of try to focus. And so I think we view there's a small handful of top-line potential top-line driving AI initiatives that we are heavily focused on over the next 6 to 12 months in areas like trading is a good example where there's just so much going on at once that adding AI agents to be able to monitor and react certainly can provide some upside.
So there are areas like that, that I do believe will have impact on the top line. At this point, we don't have enough data yet to say what that impact could be. So we haven't really contemplated it in thinking about this or next year's guidance. But I do think that there is going to be upside on the top line that we unlock as we embark on these initiatives.
Two-parter. First one, structural hold accelerated 100 basis points in the quarter. Is there anything specifically you thought that's driving that? And can you talk about maybe if that resets your expectation for that 50 basis point year-over-year improvement? And then secondly, in late 2023, you guys had an Investor Day and framed out 2026 expectations and I think it was $1.4 billion of EBITDA. I know you're not giving updated guidance today, but there's been moving pieces in that, namely the tax increases as well as Alberta timing. Is there any way to just frame out the impacts from those one-offs so we can better calibrate expectations for '26? That's it.
Yes. Great question. So on the first one, I really think the big driver of structural hold improvement has been bet mix. Obviously, there's other things we're doing to optimize, but that's really the big driver. Parlay mix was up 430 basis points, which drove that structural hold up. So really excited about the progress there. And then in terms of next year, I think you're right that when we did put out those numbers, we hadn't had some of these tax increases, which have amounted to around $200 million if you look at next year. So there have been some underlying value drivers that have been outperforming, too. So I think we're able to offset some of that, but I don't think we'll be able to offset all of it.
There are some higher profile sports streaming apps set to launch in the next few weeks ahead of football season, ESPN and FOX One come to mind. So can you just talk about your openness to partnering with either these or other sports-focused streaming apps in general for cross-sell opportunities or potentially even look to enter into more formal exclusive relationships going forward? And then separately, after Flutter completed its Boyd deal with the restructured market access agreement, can you discuss the opportunity for DraftKings to rework your own market access deals given your stronger position in the market today versus a few years ago?
Yes. I do think market access deals are an area of upside along with many of the other COGS levers I mentioned earlier. So I think you're right that there is some upside to be had there when we renegotiate some of those deals. And some of them were long-term deals, but are still coming up in the next few years because a lot of them were struck in the early days of the market, as you noted. So definitely something we are looking at. Also very excited about the launch of the DTC apps you mentioned. I think it's going to be great for sports viewership. It will help betting. I think it's too early to tell what kinds of media buying or partnership opportunities might present themselves. Obviously, we are anxiously watching though and seeing how that stuff unfolds. And if there's a partnership that makes sense, then we would certainly look into that.
Great. I have two questions. First, it seems that in the first quarter, the number of unique users on a trailing 12-month basis remained flat compared to the previous quarter. I'm not sure if the explanation is straightforward, such as not retaining users you didn't want, or if it's a simpler issue. Secondly, somewhat related to that, could you update us on your customer revenue split? Specifically, when we consider the typical 80-20 distribution where 20% of customers generate 80% of revenue, how does that look for DraftKings? I'm trying to understand the tax implications for the larger customers and also assess the impact of the smaller customers on your revenue outlook.
So on the first question, the biggest thing that happened with unique active players was last year, we had Jackpocket, obviously, in the numbers. And this year, we also had Jackpocket, but we didn't have Jackpocket, Texas, which was a very large state for the lottery business and obviously losing that cost to unique active players is something that affected the numbers year-over-year. And then in terms of the customer mix stuff you mentioned, we haven't disclosed anything exactly, but we're roughly in the range that you talked about, which I think is pretty normal. Keep in mind, too, for us, 20% of customers is still millions of people. So we feel like we're pretty well diversified across our base. And I wouldn't assume that all those people are super high spend. A lot of the people at the bottom end are spending $0.25, $0.50, $1 on bets. So it doesn't take much to be in the top 20% of customers.
Alan, could you provide an update on the 2025 EBITDA at the midpoint? Additionally, could you quantify the tax change and the Missouri launch? Also, if there are any positive developments beyond sports outcomes, please share those details as well.
Yes. At this point, we expect that with the launch in Missouri set for early December, it will likely have an EBITDA impact of around $35 million to $45 million this year. The sport outcomes were a significant factor in Q2, but we also observed strong performance in our core business fundamentals. While it wasn't substantial enough to warrant an adjustment to our guidance or create a separate bridge item, it does provide us with optimism for the latter half of the year. After reviewing the guidance, we recognized a slight opportunity for adjustment but chose to maintain it flat since most of our revenues and EBITDA are typically generated in the second half of the year, particularly with the NFL and NBA. We feel confident about the momentum going into this next phase, but we don't believe it's necessary to make any major shifts at this early stage.
Maybe a two-part question for me. First, I'm getting your pregame handle was down year-over-year in the quarter. Should we expect that to grow in the second half? And then more broadly, you've been one of the more vocal operators around in play, obviously. And are you seeing any changes to your customer betting patterns, size of wallet, shifting of wallets? Just anything you can share there?
It's difficult to predict what the pregame handle will do because we don't analyze handle in isolation; we consider all revenue factors. If you're aiming to maximize handle, you would increase promotions in the market. In a quarter where we saw a strong hold rate and efficient promotion, I would anticipate the handle might be somewhat lighter than in future quarters if those conditions change. It's challenging to make definitive statements as it relies on outcomes, promotional rates, and various other factors that are constantly in flux. We view this as an opportunity to leverage multiple avenues for revenue growth to achieve our objectives. Nevertheless, we are very enthusiastic about the in-game growth we've experienced; we were up about 16% overall for the quarter in in-game, largely driven by baseball, which grew even more. There’s significant potential here, and the growth appears to be persistent.
I believe this will be a key driver for handle growth in the industry in the next couple of years, aside from any new states. Currently, we are leading the market with the best offerings and had over 90% uptime in all of our core live markets last quarter, which is a top figure in the industry. We have a broader offering than anyone else, so I feel we are in a strong position in the segment that is likely to be the primary growth source for the handle side of the OSB market in the coming years.
Regarding live betting, what insights do you have about the time customers are spending in the app or the number of sessions, especially in relation to improving conversion through personalization? Additionally, have you noticed any trends in engaging users with different matches or sports based on those interactions? Also, we've discussed before how live betting might attract new customer segments due to its product offerings. What observations do you have on that front?
Yes. So I think when it comes to personalization, we are still really early days of what we think we can do. So I actually think there's a good bit of upside there. And from some of the things that we have implemented to date, we are seeing really strong results in terms of engagement. So I do think there's a lot of upside on that front. And sorry, what was the second question? Can you say one more time?
Yes. Just around the potential for live betting to unlock new cohorts.
Like new acquisition. Well, I do think one of the things that's good about live betting is if you miss the start of the game, you can still get a bet in and a lot of people don't know that. So I think as the education around that continues, it's going to create more efficient in-game customer acquisition for us, and it will extend the window of time that we can acquire customers. I'm not sure so much that you're going to get an incremental type of customer because so much of what people do is similar to pre-match. I mean, there are different bet types, but it's the same general activity. But I do think that having a larger window to be able to acquire customers and having the education out there that you can get your bet in any time even if the game started already will help.
Can you speak to any July handle trends or July hold trends you're seeing and how the outlook for handle is in the back half of the year? And then just touching back on iGaming, can you talk about where you think you are competitively with the iGaming first player versus the Sportsbook first customer?
Regarding the handle question, the sports calendar has shifted slightly. Last year, events like the Copa and Euros significantly influenced soccer betting, but this year soccer handle has been less robust. However, other major sports have seen handle growth of over ten percent compared to last year. Baseball, golf, and combat sports have all experienced this growth. Additionally, we did not have the Olympics in July this year like we did last year, which also affected this year's figures. Despite these differences in scheduling, the major sports continue to show strong double-digit handle growth. On the topic of iGaming, I agree that this is where we see the most substantial growth potential. We are leading the way in converting Sportsbook customers into iGaming players, and we have made significant strides in dominating the table game market. Our primary opportunity lies with slot players, particularly those currently using competing apps who may not yet see DraftKings as a destination for their gaming needs. There's a strong potential for us to shift their perception and bring them into our ecosystem. Overall, we are optimistic about our product developments and our ability to enhance our brand to attract slot-first customers.
I want to focus on Illinois wager tax. You guys are passing that along as are FanDuel, Fanatics, some of your main peers and competitors. I guess curious what your assumptions are and how you think about that market and what passing that on? I know it will be a new experience for the consumer, but what do you think that will mean from a market share standpoint and then also from an in-market TAM standpoint?
So I think the short answer is I don't really know because this is unprecedented. The way that Illinois implemented the tax, there really wasn't a good solution here because if you take low dollar bets, you either charge a pass-through or you don't offer them. And we did see some other operators choose instead to go with minimum bet sizes, which I think there's some pros and cons to different approaches, but we felt like this was the best approach. It gave the customer at least an option if they wanted to still make lower dollar bets even if they did have to pay the pass-through tax along with it. But again, the way Illinois implemented this, there really isn't a great solution. I'm hoping that they fix it. There's got to be a better way to do it. And at this point, really hard to say what it's going to do. I don't think it's going to have 0 impact, that's for sure. And that was part of what Alan mentioned we had baked in as we thought about the impacts of tax increases in our guidance looking forward this year. And at the same time, it's really hard to know because we haven't seen a tax like this before per wager tax. So it's kind of uncharted territory.
Can you provide any insights on the EBITDA guidance for Missouri, specifically regarding the expectations for customer acquisition? Are you implementing any different strategies for this launch? Should we anticipate a faster pace compared to previous metrics? In the past, you've mentioned aiming for a mid-single-digit percentage of the population within the first 90 days. Additionally, could you share your expectations for customer acquisition costs? Lastly, although you may prefer not to address it, is your external marketing year-over-year growth around flat, excluding Jackpot?
Yes, basically to the second question. But on the first question, I think each state, we get a little bit better, but I would expect Missouri to look largely like last couple of state launches that we did in terms of timing. I do think for some reasons that were restrictions and the last launch in North Carolina from the regulators, we probably got off to a little bit of a later start than we will in Missouri. So I think if you look at Missouri, you're going to end up with a little bit maybe more acceleration than that one. But I think if you look back to the last few launches before that, Ohio, Massachusetts, it will look more like that. All that said, the timing of the year is different, too. This is going to be happening right in the middle of NFL season. So that will probably change the pace in the curve. Also, I would expect maybe a little bit more of an accelerated curve for that reason, too. But overall, I don't think any reason to kind of model out too differently than what you've seen us do in the past in terms of mid-single digits. Maybe there's some upside there. And I think the CACs will be fantastic because it will be right smack in the middle of NFL, NBA, we'll be having all the major sports outside of baseball will be happening. So I think you're going to see really good CACs.
Wondering if you could talk about your approach for customer acquisition in the third quarter. Obviously, a seasonal high point for that activity. And just how we should think about you realizing further promotional efficiencies? And then for my second question, just a follow-up on Jackpocket. With Texas out of the user base, just wondering if you could remind us what are the biggest states now kind of within the user base of Jackpocket.
So on the second question, New York is now the biggest. New Jersey is fairly large. So those are some of the big ones. But obviously, Jackpocket is in about 18 states now. So lots of diversification across many states. As for your first question on the customer acquisition side, I think, as you noted, this is one of the most important times of the year for us from a customer acquisition perspective. So obviously, lots of good stuff planned. I feel pretty good about where we're going to be competitively. I think that we will be more efficient this year as we continue to optimize, but also we'll have more mature states this year. So I don't know where that's going to net out. And then obviously, we have the Missouri launch coming a little bit later in Q4. So that will be something we're gearing up for as well.
It's Patrick Keough on for Barry this morning. I have two around tax mitigation for you. First, with the Illinois surcharge pending, could you clarify how that revenue will be taxed? And how are you thinking about possibly rolling out surcharges to other high tax jurisdictions? Second, Sportsbook pricing has been an interesting topic to us. We're curious how you think about balancing that competitive dynamic with customer awareness and profit potential. Does tweaking pricing weigh in as you think about mitigation?
Yes. I think tweaking pricing is something you need to consider. And some of it will depend on your first question, tax treatment. Our position is this was a pass-through and it shouldn't be taxed. I think Illinois has taken a little bit of a different view on it. So we're going to try to obviously resolve that before we implement the charge, which isn't happening until September 1. But the intent was to be a pass-through. I think if it ends up being treated as taxable revenue, then there's really no benefit to do that versus incorporating into the pricing. So that is something that we'd have to consider. But right now, I think this is the current plan. And then in terms of other states, I think we have to see how this one goes. I mean, this will be a really interesting experiment to find out what the sort of net effects of implementing such a charge will be. And that will give us great data upon which to rely as we think about other states that may have higher tax rates and what we want to do there.
I actually want to ask about maybe some of the micro betting with reports suggesting New Jersey is pursuing banning micro betting really in the context to your live betting, I guess, now over 50% of total handle that you mentioned. Can you help us understand how big micro betting component is and how much risk you think that ban could actually be?
I see that as very unlikely. It was just a piece of legislation introduced by someone. New Jersey offers online slots, so I don't understand how they could view micro betting as a major issue. In terms of its size, micro betting represents a small percentage of our overall handle, likely in the single digits. While it is meaningful, I wouldn't describe it as a significant factor. Additionally, bills are frequently introduced that seem unlikely to advance, and I believe this is one of those cases.
I just wanted to stay on in-play betting. And given the Simplebet acquisition closed late last year, this will be the first NFL season of you guys owning the assets. I just wanted to see how you expect it to play into your new products you're bringing to market this NFL season and how it plays into your expectations for second half handle trends.
Yes. Simplebet has been great for us. I think the team has really gelled with our team. And I think a big part really of why we are leading right now in live betting has been the addition of their team and their technology that we brought on. So really excited about having them here for a full NFL season. And I think the work that's been put in over the last year is going to show.
Thank you for your participation in today's conference. This concludes the program. You may now disconnect.