DraftKings Stock Surges Despite Q4 Revenue Miss

In an unexpected turn of events, DraftKings Inc. (NASDAQ: DKNG) shares soared by 7.3% after hours on Thursday, despite missing fourth-quarter revenue estimates. The sports betting and gaming company reported revenue of $1.39 billion, falling short of analyst estimates of $1.43 billion. However, the company's positive adjusted earnings and strong customer engagement seemed to outweigh the revenue miss, driving the stock's impressive performance.



The company's fourth-quarter results were driven by continued healthy customer engagement, efficient acquisition of new customers, and the expansion of its sportsbook offering into new jurisdictions. Monthly unique payers (MUPs) increased by 36% year-over-year to 4.8 million, reflecting strong unique player acquisition and retention across DraftKings' Sportsbook and iGaming products. However, average revenue per MUP (ARPMUP) decreased by 16% year-over-year to $97, primarily due to lower ARPMUP for Jackpocket customers and lower actual sportsbook hold rates due to customer-friendly sport outcomes.

Despite the revenue miss, DraftKings raised its full-year 2025 revenue guidance midpoint to $6.45 billion from $6.4 billion, representing approximately 35% year-over-year growth. The company also reaffirmed its full-year 2025 adjusted EBITDA guidance range of $900 million to $1.0 billion. DraftKings' strong customer engagement and positive adjusted earnings suggest that the company is well-positioned to drive sustainable growth in revenue and profitability in the coming years.



In an interview with CNBC, DraftKings CEO Jason Robins discussed the company's Q4 results and outlook for 2025. He emphasized the company's focus on driving sustainable growth in revenue and profitability through initiatives such as extending its lead in live betting and advancing cross-selling efforts to and from new verticals. Robins also highlighted the company's strong customer engagement and retention, as well as its positive adjusted earnings, as key factors contributing to the stock's strong performance despite the revenue miss.

In conclusion, DraftKings' stock surged by 7.3% after hours on Thursday, despite missing fourth-quarter revenue estimates. The company's positive adjusted earnings and strong customer engagement seemed to outweigh the revenue miss, driving the stock's impressive performance. Looking ahead, DraftKings is well-positioned to drive sustainable growth in revenue and profitability through its focus on live betting, cross-selling efforts, and strong customer engagement.