DraftKings Reports $509M Loss but Eyes Strong 2025 Growth

Despite reporting a $509 million loss for 2024, DraftKings (NASDAQ: DKNG) remains optimistic about its future, with strong revenue growth, an expanding customer base, and strategic acquisitions fueling expectations for 2025.

Mixed Earnings Results, Strong User Growth

Unlike traditional casino stocks, companies like DraftKings, which focus on online gaming and sports betting, emphasize key performance indicators beyond just revenue and EBITDA. Metrics such as Monthly Unique Players (MUPs) and the revenue they generate are closely watched by investors.

At first glance, DraftKings' 28-cent per-share loss and total losses exceeding $500 million might appear concerning. However, the company also reported a 36% increase in MUPs, bringing its monthly active users to 4.8 million. While average revenue per user (ARPU) dropped 16% to $97, the addition of over a million new monthly users helped offset that decline, framing the overall growth as a net positive.

Revenue for the year surged 30% year-over-year to $4.8 billion, and the total customer base grew by over three million, pushing the company's total registered players to just over 10 million. Nearly half of these users are active on a monthly basis.

DraftKings closed the year on a strong note, reporting $1.4 billion in Q4 revenue and $89 million in EBITDA, despite sportsbook hold fluctuations during the quarter.

2025 Outlook: Revenue, Profitability, and Expansion

Looking ahead, DraftKings is projecting another year of strong growth, issuing full-year 2025 revenue guidance of $6.45 billion, a projected increase of approximately 34%. The company expects earnings to range between $900 million and $1 billion, driven by continued user growth and declining customer acquisition costs.

One of DraftKings’ biggest areas of investment is in-game betting, an increasingly popular segment in global markets. CEO Jason Robins highlighted this as a key priority, emphasizing the company's recent acquisitions of Simplebet, Sports IQ Analytics, and Mustard Golf to enhance live betting technology.

“In 2025, one area of focus is extending our lead in live betting. Our recent acquisitions provide us with proven technology and analytical tools that will accelerate our product roadmap and bring the live betting experience to another level,” Robins stated during the Q4 earnings call.

Live betting already accounts for over 70% of revenue in mature markets like the UK, and DraftKings sees enormous potential for similar adoption in the U.S. The company is investing in lowering broadcast latency and partnering with leagues and broadcasters to ensure real-time betting synchronization across multiple platforms.

Lottery Expansion and Strategic Acquisitions

Beyond sports betting, DraftKings is also making moves in the nascent online lottery market. The company recently spent nearly $750 million to acquire Jackpocket, a lottery courier service that enables online ticket purchases.

While some analysts speculate that Jackpocket’s user base may have contributed to the decline in average spending per user, DraftKings remains bullish on the long-term potential of the online lottery market. The company expects the acquisition to contribute $340 million in revenue in 2025, with continued double-digit growth in the coming years.

Investor Confidence Remains Strong

Despite reporting a half-billion-dollar loss, investors responded positively to DraftKings’ long-term outlook. Following the earnings call, the company’s stock surged 7% on Thursday and continued its rally with a 13% gain by midday Friday.

With 30%+ revenue growth projected, an expanding live betting market, a foothold in the online lottery industry, and lower customer acquisition costs, DraftKings is positioning itself for a strong 2025. As more U.S. states move toward legalizing iGaming and sports betting, many investors see the company’s growth trajectory as a matter of when, not if.