DraftKings (DKNG) 17 Feb 232022 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to the Fourth Quarter 2022 DraftKings Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Officer. conference like Dodge, to now Legal Chief would turn over the Stanton I ahead. go Please

actual required could forward-looking assume materially no Good morning, constitute to to thanks update from other make are everyone, by and to our factors, our during statements SEC filings today. results subject in from this we as Certain discussed call uncertainties may We that risks, historical forward-looking further that other forecast. as for statements than and joining statements, law. cause our differ results or responsibility us

During DraftKings' these non-GAAP considered be be website this our we which results financial earnings These call, filings in useful GAAP to management Reconciliations measures accordance may not most for will should the GAAP. in also our isolation comparable performance. discuss presentation, believe with in operating SEC. prepared measures in financial on measures certain and with available or found in as DraftKings' non-GAAP measures are our the evaluating be of substitute that a can directly

Jason Financial call who provide remarks Co-Founder on we a business; update of and have Park, some of Robins, will DraftKings, the Hosting Officer an and Chief opening Jason and our financials. our Officer DraftKings, who of today, Chief Executive share review will

then the line open will We to questions.

I will now Robins. turn to over the call Jason

for joining. you Good morning all thank and

very am I excited about XXXX. off, First

million previous by have of November, $XXX earnings to We are strong in our and totaled our more decisions focused about prior expenses guide. relative that EBITDA actioned an call Since on than have our management. analysis made ever adjusted we items expense expected surgical backed

quarter of of to of $XXX our our fourth a EBITDA adjusted in guide $XXX expect guidance, adjusted have range to million million negative the we range the of generate million revenue $XXX million Including more negative XXXX million, notably of $XXX $XXX to EBITDA a the and negative in XXXX. to from impact increase negative improved than

As and acceleration and are a profit both categories. to continue in top compensation expense spot you we EBITDA. efficiencies, we into grew non-compensation line and great seeing we adjusted year-over-year ways and are will momentum had is be the our will have speak can contribution what clear, drive the XXXX. adjusted strong explore our Jason in rate results. an our And drove quarter We see, in To and fourth strong revenue in of heading Park well, very an XX% gross about margin more performing fourth XX%. quarter to

was Super sportsbook number Turning United app to States downloaded the sportsbook the our one mobile most product in DraftKings' since offerings. Bowl Sunday.

one sportsbook, the product, This this capacity key our on continues increased parlay focus of of first parlay drives making end for hold rate. For our the same-game the own operator highlights to us was our our offering, in-house enhancing end live which NBA. deliver product to launch

And Jackpot, progressive for more shared booking. iGaming, jackpot table a unique type of than XXX we launched in DraftKings is slots across that

entirely also received to casino expect our New for the in-house, launch coming developed which in first game We approval live in Jersey. months we

our team over the past months. XX their proud place. the expense efficiency in we and of proud particular, culture am management I team and am I of have focus on In relentless for

trajectory expenses revenue growth, and While better strong also about driving our has we is great the our here done, before. work than feel team in ever not our ability shown while the managing

that on for eye very accountability that not ball is to noted personally very important are take all goals, And toward off critical objective. focused this management ensuring area. it top aligned and compensation I am the this I in also their

to Park. over Jason With that, I will turn it

statement vintages. highlights, hit and performance, state for basis. XXXX all Please some improved information revenue, our some EBITDA of guidance non-GAAP on me adjusted Thank income including you, on QX a the Jason. underlying are except and our our measures, note on let that Yes, new

mentioned, great In revenue, revenue to which posted million and coming we $XX QX the growth Ohio. QX, represents of have XX% full brought for October $XXX in was As of we EBITDA XXXX. positive in QX. for out year the Maryland recent This momentum our Jason growth we after quarter adjusting investment was positive million Adjusted XX%. launches our in roughly made and versus entire

engaging our better improvement structural than because hold customer better expected. fundamentally trends Customers was of our revenue primarily and than on promotions. products are and our less sportsbook are Our prior more in with we reliant guidance,

out also approximately of managed We million $XX QX. in expenses

continued handle start. per of promotion billion. revenue This revenue a growth our rate player, will $X.X XXXX of midpoint trends, be management; great from $X.XX including us is to reinvestment expense guidance customer enabling and billion increase hold are to to and year strong the off a retention, customer better

increase along us two adjusted management our cost EBITDA negative from confidently people-related to $XXX $XXX million outlook, million to to factors, $XX million roughly allow $XX efficiencies from $XXX And scale another expense for programs XXXX, identified These our with negative range already million revenue from million. higher $XXX have of to $XXX savings million million our and negative guidance costs. negative marketing

are wanted given also combination of newer bit a states, At states new reflection states. of time economics. a to brand on state any point in spend our company mature of time, I foundational and results a

than are Our seeing performing positive we faster to and profit contribution paths states expected. we well, very are

factors. to the For net states to revenue results. those vintages continued example, are at states, great XXXX, XX% represents we we when by seeing look is U.S. roughly This versus population, grew due In of which several XX% our XXXX. XXXX growth XXXX

retention, handle in XXX We is from of points that growth coming going in are gross is percentage the than XXXX net revenue customer and reinvestment promotions margin adjusted hold, hold up is and for up. higher XXXX. And coming vintage rate growing, promotional down seeing basis much because more less versus our is retained was player great

important increase profitability these towards progress Finally, combined and statistics profit, our and profit total across much XX%, achieving they states in absolute our adjusted an acceleration marketing fixed of our our decreased with long-term states. expansion drivers costs, are foundational than dollars contribution clear are by in slower growth in and the results This continued EBITDA adjusted contribution those goals. acceleration of in EBITDA more

our questions. prepared we now and concludes for remarks, line That the will open

from with first [Operator comes America. Bank question Shaun of Instructions] Kelley Our

Your open. line is

you Jason us sense story or shift. on you to improvement. Jason, XXXX things? what kind wise really about I in of seems some do the was long wondering little called of product hold quarter? the about kind seeing medium you're saw bit secondarily, you those of the can of term? underlying could of What's some road And out, assumption customers to one think and two on structural migrate you for if results we you yes, drill fourth products types the kind a then That what's continue How a just give Can that into a the be big as and down in you map? think what mix of kind of just

question. Great

year's made XXXX, excuse platform, season work, really, ton which enabled and by of I of think area, think through. really, So, -- NFL it with beginning previous to which towards the last this progress think NFL having a our worth NFL the has of in me, own culmination a I of migrated I continued the has been

in-house was first so, do We first and entirely the the stop. operator and We just to was were launched traded live I which an product. SGP that think built for MBA,

shift. So to expect really, continue to more effort drive will towards I I mix product a to more driving and think we more offering, continue and see parlay should that better think

structural other Certainly, making things our rolling out are environment to are and as the a we Also, of also what changes. are of shift we models, mix data doing largest increase. new lot improved adjustments making our other hold performance. trading driver But improve we're helping and our to us other that referring is improving models,

additional do I think there's So, some upside.

able be map. against product to execute We the continue road those on things to

Yes. would I add, in for guidance. terms And of your question Shaun,

guidance saw provided we is QX, QX, in we big embedded structural flow-through our empirical in XXXX our revenue that we've the into that As guidance, the of revenue QX today. late part which increase a hold and

you. One our That David for Jefferies. moment with Thank comes question. question from next Katz

Your open. line is

quarter. the And congrats on

to light on were little or if guide see is, and hypothetically betting, and talked see that if the made, -- this how So we operating sports with about platform that a iGaming much respect go New updates York, to we've so impact live shed kind you we can to you've cash side? might were the the the on know I hypothetically, updated what loss flow in of both

Absolutely.

think, obviously, of big those of what's the I things. there's rate, structure tax So, moving around market, is sorts deductions, promotional the how the parts, a lot

was it betting roughly year, I -- of X% the think new past to in iGaming. are the U.S. X% X% X% is, in assume markets general, X% X% population or we've what we for to each and to sports said

that. end York, So, obviously, New of upper would on be the

those sports our passed until But early it into betting. to assumptions live before year mobile took year, live. overall, they that bill the this York are go year, Remember, don't the it's I if I will the for this think following even XXXX the think went year. was they it live It the bill but did year go following New pass baked unlikely guidance

some generally I most year. So, calendar states have faster, following but the been been have think

than we've built this around XXXX, a would I assumption we're think iGaming mentioned, market at be but we had assumed. I So, bigger looking and as in that, some

just like may. And the New to to that impact, if earnings I that negative both Is it and assumption fair up, follow a York.

and players hundreds of York acquired already. thousands of we've in hundreds So New

of are to going now. opportunity there some to iGaming the think to cross-sell be I players Jersey, enormous. know to these do We that Connecticut, would Pennsylvania New

where some customers the do thousands a same incremental we've not I So, acquired we that there already. of as it's spend, haven't is of acquisition had fresh customer but market think hundreds

I So it's assessment, an accurate think.

Thank One you. moment.

a from Citi. Bazinet with We have question Jason

open. is line Your

have a just question. high-level I

the laid well, of going At metric faster? lot obviously, in the improving the do to of the are scope seems moving to Or that get the same, move you and You think about improvements those out to at guys, maybe for there these some you'll implication the things but operations, prior long-term you targets is as Investor there making direction. keep be that some -- up? are level, every the Days, you've compare how just of right if when a highest goals is progress

question. great a That's

an year, this at be an updated outlook later long-term providing Day. will, Investor We

stay there. certainly to there's have rate hold I on for speaking conceptually, upside So the it do front. some some think tuned But that. We upside

will promotions I with somewhere where think in end probably be they'll line think term. long up we

I be be all cognizant we're And to going. can. of as to with we cost always that as effort That's that in. that the there's has a the we're really profitable we leadership that's market long-term yes, I think, the taken something, build company, possibly side, obviously, efficient think need on message also everyone resonated has then But most that needs understand really is, on to the to. team we environment And

thorough review 'XX, The Board management XXXX of management incentives. conducted it's completely the incentives in a 'XX, continued to starting end towards realigned and of

focus what on and EBITDA So, profitability equivalent there on was to had, revenue. previously had an we

that months. I upside do think at more said, long I the we've look continue over the efficiencies provide So like can later finding when past the specific there's been and some XX I we we'll year, think updates if to we find that term, this

And Deutsche our Santarelli with from Carlo you. question Thank comes next Bank.

line open. Your is

that the up, you come to think as and monthly with but a if and of I with of it's of have kind line you're about in the is the parlay you early online. of similar, up seems some about but hold XXs you improvements TAM, that wants had growth to of structural whoever it over at new this was take year. guys one, with obviously product, your lot relative high unique brought with addressable stuff, XXXX kind addressable not TAM the this sure retention acknowledging, your this making think kind new believe states course I'm payers, least. that that you Jason,

to to around the on like are how how of improve you about between kind effort, retention and how of efficiency kind think per of kind retain customer balance you comment could holds as a that basis? As rising,

start I helps I question. is offering important retention think about And We the It's parlay end, think What's product product it's keeps something there. customer. that's love nice an it. in really, customers the with of stronger. all extremely that the getting the about

attractive start the example of economics and really parlay a So find it for benefits at a products create view is also don't as with it want I We the trade-off both that a and and ideally And customer and all. that. great we then customers at construct the think customer, the those the exciting way look products is that in Company.

people somebody years. big game, think have But And the DFS And large a If large value in to with while it's payday. an to really had And that's the very they of skill relative the win legs, parlay do about tournaments when way. does is think DFS unique bets. prices. opportunity into large a a very for not functions they bet they certainly have a the small common. turn singles prop opportunity win, certainly, an as while win, same We've lots to the parlay very these I parlay product product that's I

if one follow-up. Great. I could, just then And

was come expect, was $X.X sales expense starts a we adjusted and that to leverage we flat little that little In kind go in terms revenue And of million, this think as chip year? to Or that, and bit see relatively years 'XX, Should guys total marketing over start sales soon line then this you of that to little growth? that starts disclosed. subsequent the you and maybe 'XX bit over away external lower? a little -- is The I $XXX down of as billion. and is marketing, a where that, the marketing maybe a in year

that's right. think I

be we'll this relatively think I year. flat

this this the some that more states and a will we're you based relatively a of -- of think expectation, tail obviously, market to will mature, expecting But I to down baseline I noted, be year-over-year. matures, as And on overall the start you'll as more sort bit. it as think depend on think see be flat year, state think I But launches. this basically cadence of we're little year. I flat

Thank you. One moment.

Our Morgan Young next Ed Stanley. question comes with from

Your open. line is

for you've disclosure reiterated very say some year this appreciated. of really really, you the the presentation. 'XX. which set want useful around is statement in about extra up in And positive then your all, and fourth to ask of the first and I that thank first EBITDA adjusted just to producing It's of the quarter quarter how

there perfect come of state particularly Given anything that there the this around that as you us Is there to you line launches that except were earlier, you of sight state maybe Or a the that for not cadence sort yourself think can just that? to help new to reason due the QX, due couldn't just investment, you mentioned why that about just you cost new and to of savings the Is statement? having is conservatism else? commit that Is want that? to mentioned?

Yes.

I think investment business, of deeper seasonality there a are there's Certainly, QX where the there's it's like marketing Ed. great -- quarters QX. and question, so and

staying that's we for right launch, us us I Maryland that, think behind expect QX sometime with in the to hopefully, brand-new now, given Massachusetts, think especially March, do that, I Ohio, the or message. reason really

seeing are we're we was QX. in an even and some more our Maryland what at Ohio, And so have least even and that I ramping expect faster. think states Arizona Arizona. better faster, like launches, state we of is the Ohio and states fastest-ramping really those far, been because of even had, Maryland recent those

soon think I just to too don't that, contribution the good know So, is that's QX is news that. if profit expect I sooner. to contribute going more

every in on focus That's efficiency, way, now, continuing Company. plus the I on comfortable continuing efficiency-oriented we're But $XXX committing be think trying we're around right initiatives in we're trying a up, contribute better and that to than I the the I some to get that But quarter And And upside. profitable to EBITDA potentially think to trying do right think could of what sooner. focus there's to number get to number either of we'll to now. Company that we're million thinking QX. goal get to

Our with Kelly comes Jed next Oppenheimer. question from

Your line is open.

some about churn holds, have last sort Maybe too, following negative you the with kind the was you did And I a what's the talk Can on driving Carlo's or I up Madness And question last football first quarter? a Can dynamics year, you better you outcome, XQ. of just rate guess, on versus churn rate? the talk question. season, than March thought. of this higher Great. underlying think year? football your of just about just then lower around and

about talk of of for you we the some can sort be comps So about thinking should XQ?

Yes, the this on I first rates. hold really think been an keeping has Obviously, so on question, increased. seen we've eye -- we've strong retention as

comps that decent see at even I higher us market hold have has, We had other levels we than retention. think, that

seen the churn. still thus confident there's to we've only side. affecting increase And hold on rate room positive So we far, feel trends retention without

March few think it's As years. I last as Madness, weird been far a

had in now than You think in Madness XXXX. of we big seeing in college season popularity. in previous seasons. coming And had the the March way cancellation really a terms basketball of couple in back I of We're the is adoption regular more

So, Madness, it. we forward time hopefully, be it's Massachusetts residents first in to will be It will really able going it and if looking to stay. I'm and be will bet great that live, a Massachusetts March think to -- the be gets

and continuing think be that to I learn get better out and more drive big mix. better opportunity, then figuring on ways bet obviously, will So, a to

side multiple is college tougher said, say, so less generally with just of are on combine people they're on parlays bet ones and teams. states number will to also player sports, props That familiar likely because of more one players, mix don't the I the a the allow

parlay, same-game given the So, to game multi-game product, still easier described. the little is we'll college I sports, be parlay too, some drive think I parlay but than dynamics same obviously, there, trying bit focusing a of

to in XQ won't there World from quick then Great. anything Cup the this that just call there be out year? follow-up. one And Is in

mean, great, said, single digits should accordingly I low doubt was don't And adjust of from that our anything think that there's really percentage it. about Cup I World it you That we revenue. Cup. no was believe World

little was quarter. I nice last but think boost, financials didn't impact that have our tremendously a on material a

in add, would Ed it November. the was on look like QX included customer-by-customer I QX handle Cup And a that that felt were in incrementality. level, a as prevalent at the I sports World more that when add, on we true And provided of it guidance much just obviously just would we between as sort already very data was -- shift in

And Robert MoffettNathanson. comes you. from Fishman our question Thank with next

is open. line Your

how not out for back. team the rights called wondering more since expand have you players how the You going looking past different and and you're if OSB pulled maybe media deals, certain two efficiencies upon just some first relationships now other the around renewing they've that year you or forward. over league can I'm changed of these signed

very would that discontinued past others they've we to efficient. Yes, big And when I discontinuing you're that the becoming had up at up and come Company think make in a number marketing describing will a category, We've around is deals the being league that and category, being obviously, reductions the what over the efforts way we year. there. of team come these need room more deals deals efficient be. there's have of constructive big them to a feel been there's one many have agreed and partners aimed we have a And that expense be as expense

really it's So mix. a been

market's have had discontinue to the there lot have we part long business others now, been deals "Look, changed, need with. of DraftKings. is that we term a the of And been be that it." And not recognized and that portfolio said, in realize this great partners, unfortunately want right to They we've rework to really the efficient with an There's we though.

an effort it it's get things, to of to that efficient So a think overall there be is company. this in of even mix really but we have And a better. I opportunity category be an more will part as

back? make follow-up. has changed since the Iger the future partnership relationship If since is you'd the Any about care update to ask Bob quick early And at with I could Disney? just one all whether days

Jimmy mean continued have Pitaro been I we've his Disney. great to partners. relationship great a ESPN, and have team No. with

So, and been we've always and can the relationship, really out ways grow improve And Disney thus have talk a lot enjoyed partners we far. about great a that extend gotten and ESPN we And of to partner that the relationship. partnership. our

Our Lampen comes next question from Clark BTIG. with

open. is line Your

are say, side it that does and $XXX at Jason guys where illustrate one if little or of just you're got out, on usage bit you range, going a flow make it's you just more $XXX 'XX capital to a in your be and sense you're I've having at competitors of closer just on remain I be aggressive to with, a that the now are cash lot many to past options concern? to financing with won't Jason, guess, breakeven Park. to market million to market assume so we the cash, for a finishing sports point, to a debt let's cash to need basis, explore wide of leaning million the least point going betting raise a

appreciate I Yes, $XXX million. would that question, clarify, greater just to ending the say not XXXX. to like I million say, I $XXX million than Clark. would we're $XXX Yes,

So maybe better think is to about million $XXX probably way it. a plus

place focus type not important financing on look, operating worry having a thing the I the just is about where great Yes, we're in any can to think finding needs. we efficiencies, of and most business,

potential And in obviously, like back on evaluate of comes role at you anything debt's macro to come that. we'll DraftKings, fruition. And around instruments terms the questions structure, environment capital continue we'll broader if to entire to the

I'd there be equity think cash just capital, opportunity an position, I that that of financing. aggressive don't add because or to we whether were Yes, debt in need places, our

or perhaps opportunity an But would explore. like don't we standpoint, from organic strategic some to. we need was there if something think, I something, it's So that,

where debt mean, for any it's us So And capital think I out any I see at and -- a all. do take scenario I we imagine equity purposes. think it's virtually organic impossible unlikely any so you'll to

efficient, conviction. and that and you asked means in, we wrong in we cutting be liked Jason think also in data that we last we more, efficient in the said, met the he's leaning leaning don't but in places as a he's being be to the Park. not are surgical, the need trying far I more know and where in have just year. That places cost to As guy

But you So great Jason, team a is, cut that a of culture of I the certainly everything. think, can't leaning are are sometimes and well. we great as data, but into places have there confident to yes, amount definitely, that, be cutting, to tell driven result we having a very analytically we also need as

you. Thank

Our next Credit Ben comes Chaiken with from Suisse. question

Your line is open.

On suggests between for growth up add rate that the 'XX EBITDA. the 'XX between and rate everything and relative profit guide of kind versus or XX% 'XX. as SG&A growth side, Does 'XX growth -- states? Does even decelerate continue a rate and contribution maybe to to 'XX. XX% that's year-over-year, that XX% continue bucketing I'm you new

The costs? rate fixed of growth

that's EBITDA so Just in XX% and profit between range. XX% contribution SG&A everything bucket, the growing whole

launching Yes, No. efficient some there. new also of more really think hard find There's to ways working to very states. there's customer we're I cost be fixed little impact but sometimes, service

offset So hopefully, able find. that other to there grow we're with need any we to efficiencies

new cost. marketing not cost really, expense, it's obviously coming revenue mostly that really we COGS new states. from fixed see in So variable There's with but

are scale, our of functions pretty at think close. are I most

think more also fixed team is that's you're So growth to significant And this growth be I hard that efficient. working year, cost reduction a the seeing in why cost year-over-year. fixed moderate

grow here with we there's that's connection real can better and management more customer. off efficiency lightbulb more better growth, a gone there's and focused with being faster that if the that revenue expense think between on for doing been do a revenue we become And actually efficient. I

realizing these growth. we and be gains things share more market actually actually think off organization, as customer. the and the lead deliver efficient other, that to And an of feed will the our I to better we're be And that manage revenue value each that more for and to expenses making to going able that that connection do

been the real it that's the cry for I past think XXXX. over be a year, rallying continues team in to and

you. Thank

with Our next question comes Canaccord Graham from Michael Genuity.

Your open. line is

around wanted to of disclosures your XXXX just cohort. the states, about XXXX to in I growth that the ask you some had mature

year-over-year are mature You player you just getting are and reasons of learning about about retention growth little those do growth, gave bit -- in as seeing way get penetration? to I feel of some wanted model good growth of customer what hold. close like terminal And states? to referenced ask for you into you Or terms in increased XX% and around these some you a growth, like you some are that of you're like the kind mature states? the deeper what you works

question. great Yes,

vintage, So and thanks the unpack XXXX customers. XX% was for that XX% new was out. to in you I'd existing probably say XX% that and, letter experienced if calling that XX% XXXX, part of growth from the revenue from we customers call it,

were year, customers. we third full states still or they those were even their -- new point So were fourth in is acquiring though

a penetration. mature yet of in haven't total those So, more we found ceiling population in states -- terms even in

around I the also, decades. mean think I world, if comps And you look growth typically occurs other at markets,

going continue I rates expect don't I on still there. growing but to any And It's in but hit different know not down. dynamics, we've coming forever, decade, almost at the iGaming which sort market XX% growing. a up so growth ceiling is obviously, go now New of Jersey,

the or it. think a that lottery another an I there will should market of expectation just new much not at think And market that lots comps just least into comparisons, but the at I so. coming very always be pretty that around have we sorts there's customers other for has decade steady growth if think it's I a of you and U.S. really world, So, look

important, growth revenue net promo it's continued super customer growth. just that improvement much growth, is It just existing And acquisition. Mike, that whole reduction point that drives of handle more is -- the and is like than source customer new the

can we're in that wins the finding operationally, we customers more phase And where in we We're on still a market we're that be front. ways more way. reach of can product smart the effective finding big the

we that wallet just customers about when be our to own innovation just wallet than will within for us create fun. more entertainment don't our our of share, they they We will think years time many in if still there's entertaining with drive think find willing customers' wallet about that And things it more believe we we share. other I consumer think us products about think So, we spend and could share. be better growth that doing And spend with more industry.

you, all Congrats Thank on guys. progress. the

you Thank

Needham question our comes Thank next you. with from & Bernie McTernan And Company.

Your line is open.

everything M&A in Jason, I want using the the does philosophy letter on impact given on And stock just shareholder you've to profitability, pulse currency? as a market. your on talked take your your that about

I think becomes we Obviously, momentum focused think it are the on can that But really really operations, currency. they're focused efficient. more get We're the some a our on that it's I behind something internal independent. don't attractive stock, as we somewhat right getting on more the more very focused that now.

on sure way in lot is a profitability path focus we will and operating can right be a we and cost-effective we're more efficient we're those predict But evolution can time and now. that a now, to things of there's in time will there be company in a phase on There -- Obviously, the really the most on make clear such focus it. because how make that market just where can. right in rapid and a hard the to market of we sense this

follow-up parlays. a on And then just Understood.

think big the of penetration markets? where just or Do guys success, world of just a the rest terms what in the U.S. go? sense you a mature have relative the to question, parlays is I of it could is more given

it's world. that's to compare rest think I tough and great of a to question,

My in bit is think, of in belief it lot a other attractive from $XX prices. the longer even gaming lottery enter consumer tournaments it that roots is sorts have across to of anywhere are into for is lotteries big states DFS in can and that U.S. and there the where of $X large the products. the or unique. think of carried jackpots, lot that market, casinos U.S. over and win other a mentality see thousands offerings been gaming plus you I are most for the And products. hundreds We lotteries than our of a I million where the

I And proposition more they're world, of They them not is think in that's for Europe. U.S. to they win customer than of that say call a parts other would I kind the of in the not over a the So overseas. market. U.S. area carrying actually accumulators little big of towards the bet lot. a other popular world. to parlays uniquely But been have certainly, oriented think parts reason, that's into growth I that upside think the And in

more I of there's and more and So make we're stages lot it do this the there's much think And at more still the product. can upside. innovate fun exciting to a infancy we so I consumer. mean for

Craig-Hallum. question Ryan And from with our Sigdahl come will next

is line open. Your

new high in incumbent worse the betting an to current profile. I year-over-year? Curious then, coming. your How you get thoughts online have with guess, or marketing promotional But sports iGaming. XXXX, think back the standpoint seen on several industry better pulling competitive on coming and do We've notable about more intensity or and most from operators dynamics. entrant notably fanatics you

I think mature will it better. be be more states. will There

that and we'll market. reduction see from states that I new Obviously, continue of happens tailwind a to to as there's always think going entrants be coming that. mature, out natural of kind promotional the in

the letter. much is we've about this market apply a -- period I There expect and the any to thing talked same and a think competition about that though, XXXX, growth mattered. the one of where behaviors rational. rational seen, our result. coming that from And that of there were would more market a XXXX from some think of some The all competitively revenue I and has entrant. new in We really was you market as in saw I time share message become part was

And change. you I and their to for change changing demand efficiency that once and profitability, I that there on think more a of started accountability market And the was see again. tune, don't saw

you'll the the of field competing existing continue that, whether much it more I market come a the norm. new think or to phase that any see that market. on operators a we're think where rational is playing that into And I in be operators new

One moment.

comes Fargo. with from Politzer Dan Our Wells question

open. is Your line

hoping the on Jason, just revenue guidance. XXXX I clarify to was

for clarify, from pace hold structural issued I tech just efficiencies. fourth that seeing and for of the other the you're where then the fixed And XXXX think the in the include the marketing, follow-up, the million at want uptick in to corporate guide most time the I my hold. improvement guess, could and you guys G&A, maybe had you the your and of just revenue that quarter, parse OpEx $XX you in same just if deceleration, did that terms I benefit? product out

Yes.

on your all that's question of guide the hold HX, revenue within the split in and that embedded we So percentage, provided. HX terms yes, first

that pattern our of we'll those three we of would mentioned earlier further areas. P&T, similar to S&M, pretty into continue, And that, growth, someone that's terms G&A, guidance. breakdown have embed So confidence growth, think fixed seeing any cost across of I that type all of say XX% in we're XX% will empirical I

Thank you. One moment.

from Our Montour Barclays. with next question comes Brandt

is line Your open.

able us. guys you're ask mentioned to sort about in the if break third progressive jackpot side in that was fourth Pennsylvania you're like terms New between you the to Michigan could of iGaming. or like on color curious of GNOG. Looks DraftKings really learnings sort able season? the had down I Any helpful there's success in success for to the things you're this you've Or any cross In be of in quarter from if you have just during success leveraging wanted had NFL some or in share -- I the product, of quarter. fourth gaining Jersey quarter, good cross-selling

had we market Yes, we really the since launched number Jersey we for appreciate iGaming time I first in one I we that you. -- are December Thank in in the share XXXX. pleased January, mean, New of it. in

of from effort the products, analytics optimizing So, in obviously, culmination building on-boarding brand great our a team, years over GNOG. and four new of

feel And to we GNOG when I to yet savings revenue ongoing us think to provide parties. having as most migrate is pay that to come this not the well going hopefully think to That's due -- give third be product additional as boost we share to later an happen biggest year. suite. is will upside the that I exciting And many thing the DraftKings' and cost platform as

results benefit and the there some from product think great already side. of So I seeing lots

And of the become. get think we effective also, gotten and sort even can think, more we we've too, sweet I as you we our data. have, mentioned, spot. more data efficient The effective more at I more especially cross-sell, That's

we've effective at do it more we not cross-sell, well. have to So only able being more increasing gotten as efficiently

something been of great to that's So I'm able that that proud make has very the team progress on.

to that. follow recently may up assume that to gains guidance hold assumes just on if the And I you it fair you're XXXX just Is that share able enjoyed? that quickly

always seasonality in business. there's the Well,

we're best cross-sell activity heavy in naturally, do to platform. the going during periods So the fronts, more sports on

we've So, think embedded you But far are look we January I would new. as adjust in. and like for that that brand report yes, the I although yes, as is where at when today, say,

well and what as actions bake that. at implications looked efforts initiatives on seasonality at So any other in so, the taking. But as like I can't for necessarily the we is adjustments cohort of plan we we or that data, we more look or say that we underlying do

you. Thank

Joe SIG. comes question with Our from Stauff next

Your line is open.

-- I so had much follow we you Jason, observe and user growth. wanted and on that ramping ask certainly, to this can mentioned, faster. they're up states are

how it golden way a follow-up, what you to years And think is long year, had guess, X.X I I cohort then it to so now I versus reach of guess, maybe right ago? is, that kind one And please. the takes about sort of

Joe. question, Well, it's a great

one compare differences states, I time think we tricky year. because a there's this is in as of

number compare So, that that quickly. expect be But to the year, that's end or And then to we points level. March. variables limited state a was Ohio have And or say. of that like sort Maryland launched you have the talk in we to towards really in launch September. think Jan That when to to only a about different -- big-picture Maryland you there's Arizona a X, all to data of ramping Ohio Massachusetts of you try able I those

is, one, upfront. there's implication The some deeper probably investment

to actually, see that we've really what business. the happy at by that throughout think is rest least we've able that finding been to I of absorb the XXXX, through So been efficiencies

happens it the look If sooner. elsewhere in the state finding implication funded basically the of then But in towards we all contribution business. you of launches inflection that XXXX the positive cost through is efficiencies letter, other at the profit

means sooner. leverage which operating profitability more from revenue upside sooner, standpoint greater a get You and

think else, at way little ramping they it. to over it kind But level, it. about is unequivocally see. true what, the that's we kind out I three, the how think data a of up observably seasonality, were of to -- whether I macro bit a matter course of no Exactly it ends So, how I year, you netting are that's the ago. need describe think And more than is that anything take years much faster it states four

sense. then hold And follow-up structural maybe makes general. in That a just on

NBA NFL parlay. of outsource in-house. guide wondering includes was bringing at for I wondering in-house that same-game your parlay mentioned I the new certainly you same-game part 'XX product, sort know if you I'm You of and do launched, capabilities had that least that your

that at is in-house bringing team the So, working now.

most out it. live own we already some in roll but product to do at guide, this the and -- out, our we have first be entirety MBA industry the have expect, that, we built of XXXX, SGP that noted started -- As first won't far that point were we as to industry will I in affect 'XX some it rolled the SGP our was the earlier, XXXX. case of the recently, guide, in the in-house into the which is to the And

we that build of out to period So, I our have we can where point that's feel these models what belt, than or X.X lots a think as get put we're from third to off reaching gotten we better good now data parties. good out a We've models. like over are of a with signal where years under can shelf the we some new a that

next with Beynon question Macquarie. Chad from Our comes

or American First, just non-North wanted to opportunities aspirations ask markets. in about

markets, of has a America, changed do couple here the position it some lot learnings but of like past you've science still of in other make in North the in markets. a your pretty then Given all had to seems years, in it if you're obviously, good those that kind anything in wondering data and to

I technology now. gaming is the believe we to portable do Ontario very be incumbent that. think when right we'll And decide do we've like to you're advantages are we on the That when that have over going it overseas, that U.S. hold market. to to to global and right things the built said, it comes on product, when rate, we competition comes expand laser-focused

the that growing. remains significant think and I opportunity very here

on. become We efficient we have do that focus to an to as more lot organization work to need of a

look focus There international a going to will it year work on place be to scenes. this mean a expansion, time and we do that now. start won't the behind some not at be exploratory right and but it's to Doesn't

and on continue But organization. on very the have team an think and always we effective thinking how want do the I as research we to become the better we laying for and and to do is more what do in progress cost things focused how be make whole, groundwork continue we customer efficient of start the about for to some future U.S. and to that. do the

on the as the And like also lower I they then a mobile feared. than that, story, have doing lot are land-based a of of work follow-up communicating know lot the a just iGaming, your but seen competitors on they've cannibalization operators side seems well, to the iCasino and legislation, are it you as may probably

of be for to start discussions? more going economy? more So based in there really rolling kind iCasino happens Do on you momentum? do the you What's think more think kind stone of the will that's what

there great are you that I -- Yes, think a one. question. And noted it's

tax opportunity need the revenue, effect. more in states should could and have themselves I that for that, think, find certainly, of an

"Look, a the need that's got the story just getting groups data significant policymakers job better industry, done of an a saying, here." we a do I that other also of think sports how that's really something I and there. to lot is. out about illegal There's there And the market been the think and big work out EGA to we been large great put to betting driver as do by

sportsbooks nearly I mobile mean as have as talked iGaming they don't casino. exists. operating books you online an to go are much the see just of It's market, all illegal though think sports coverage if and even been almost not I overseas of the online that it illegally, that them -- there's any much you much. pretty of about

like then product. it's could making I on have And we as inherently, less said, much talk People I about think social hasn't it a really the that data focused probably less. industry clear. just as

tax the that's So happening and protect states generate way like to consumers realize the and it I think in also it's revenue the see already, light there's state. real of for a combination and of that bring that opportunity and those a two illegal take something market the is things sports into just betting

And question Robin next UBS. you. with Thank comes our from Farley

Your line is open.

give of XX year. to for guidance on states It if $XXX us contribution you million wonder, positive? a your bit that getting was states color little last are could I

line is? point, at how one you period when will you now, a it's be is million? that many this ramp-up in three-year say given million For profitable. state that the the about Arizona? $XXX a -- $XXX states time generate year, talked for would new Is And until faster to that it still that legalizes payback What

And then last, little clarification.

say, on percent words, any guidance, legalized new happen yet, to to the of actually your every states right? guidance, It's X% doesn't already for hit? your population is OSB other guidance that In operational X% doesn't 'XX You right, just to fair though, rely not needs be of legislation new that your talked year. about to and that long-term no haven't rely 'XX on that 'XX

is that not it's we guidance far point that's the state last The is down yet the correct. is pretty line. That in only even And live reason Massachusetts. the assume did

assumed to any But we Massachusetts this that launches not more year. investors felt get new view included. other state a legalization with happens helpful it from have So we was to

to try going I'm -- as far As to remember that.

are 'XX the this that on more we plan of Investor yet. We first for contribution sort our basis, not in covering Day at a I on year. disclosed later have which positive states one, state-by-state think detail profit

additional So, to something data disclosure on up, second we that providing save will to your speed show I'm was -- And then inflection. you had keep be what Robin. to question? and -- and We that. sorry, for get on to Oh

Oh speed. just the

And Yes, yes. proximity inflection.

So I think correct. you're absolutely

states seen profitability degree of frame. and the some XXXX, leverage states, in 'XX what the you had inflection One launched the that time ramping 'XX, is more that implications greater the new of of of get we of that than in the faster earlier earlier with operating to

Day. but that we're and launch there that effect as think a So, this potentially with time nutshell, launched later But seeing at state. could year. And an states in brings Investor more implication, a to be we'll Massachusetts, providing the future something just think that do not months to in it with recent well we'll for update think states answer question line the your the new is directly, that I I I as specific to again, have path that profitability in on a address

that be XXXX include more to an of legalized. just clear, EBITDA assumption I want does states Robin,

Yes.

Sorry.

to X% X% for or betting assumed does and 'XX forget, X% X% population X% we for to have So, to 'XX, if iGaming. I X%, not. launches the sports

Okay.

would be would this in right, have legislative states that some new session, to... So,

means if less probably going that if we're have so, may high ramp. it's comes faster to while it TAM, the implication, be, That in less low And would yes. profitability or or it mean actually

passed. pushing either we're So, get Company. for I to more the good hard But story it's obviously, a think way, legislation

And new in guidance, in If the In then losses guidance those theory, that it. would already. mean of is 'XX be be profitability XXXX includes your would guidance your that the states, right? that from also, the losses the 'XX the part would

No, assumed, more 'XX. Massachusetts, not state sorry. in did We no. We -- no launches no, other than

more no 'XX, occurs. So 'XX. to yes, I referring that If states But there in we launches launch happen. what effect in 'XX in that if will be do see was will was

on And it -- downward would would be investment states sorry, the were for what that mean So positive there a if have would XXXX. a impact 'XX. those not would have launches, in that EBITDA is in period

you. our next comes Joe JPMorgan. with Thank And from question Greff

Your line is open.

Just guidance 'XX is of that from New market efficient concentrated promotional promotional market 'XX improvement? then activity -- much versus And to reinvestment, that? the coming that? like how and with and the more or three benefit from driving more a incremental efficient in updated how a Or broad-based months is ago how regard York benefit benefit is

guidance Well, came increase the the our bulk of from on EBITDA side direct management.

about should came half So compensation marketing. about of million it, it about from or $XX million from -- say, expense, $XX of came came I

a hold promotion impact there, rate some of optimization. the definitely was So, increase revenue and big

of cohorts. metrics seeing was in some Some our it we're handle/retention underlying

faster that the As different. we of I We the we're at state, And think happening have parlays launched level some in state states parlays. the far maturing state expected. see we've rate as are of there's the anything as the don't by that's are do in and States hold newer that particular board. adoption increases seeing, same-game across

I making to that, that's state things But monetization because it underlying and really that offering think, probably a is think vintages. in on I largely than years we're rate place is the across a ago. couple the are better was I performance the think such than and front our Other are example. increases product other of that hold one retention driving that,

to the And you. Jason all remarks. closing the we for call Thank Robbins time turn for questions. have to I'd back that's like

XXXX stay for great the Thank and forward about call. all today's and look with on joining few are really you had Thank I excited hope well. weeks over to speaking a We and next beyond. to you. us all safe finish XXXX you and you

This for call. concludes you Thank participating. today's conference

disconnect. now may You