DraftKings (DKNG) 5 May 232023 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the DraftKings Q1 2023 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Mr. Stanton Dodge, you may begin.

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

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

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

then We to line open will the questions.

over call the turn Jason now will Robins. to I

XXXX. you in I'm share with you that Good all today for morning, start excited and and an to DraftKings thank joining. to excellent be is off

as supported better been has outstanding, strong as by percentage structural hold customer and than well growth Revenue acquisition retention, engagement anticipated.

midpoint, remarkable revenue of $X.X XX% in to XXXX. revenue billion, growth to range at full billion are of our the of $X.XXX quarter increasing full year First XX% a base which revenue off guidance year-over-year, increased billion we pretty and implying year a is year-over-year $X.XXX

time, focus. achieving remains At the relentless a same efficiency

efforts we on throughout mantra organization. EBITDA ongoing of to revenue the fixed growth costs, achieving within profitability and Due our the momentum gaining adjusted cost more are on and and strong our capture external is marketing to efficiencies, our an revenue Our both efficiency even primarily of growth cusp basis.

on basis expect to fourth achieve an and the expect EBITDA be We adjusted breakeven in the second quarter, quarter. positive in approximately EBITDA million adjusted nearly of $XXX to we

to the improving negative full million For the of February to XX% of EBITDA million $XXX or guidance are we midpoint $XXX range versus negative an our a adjusted year full increase year, at guidance. our

supported Turning to opportunities sports introduce platform. by to same DraftKings recently in-house trading live offerings. continued launching MLB, has wagering our by product most game parlays unique our for

the invest in-house capabilities this season We fall. in NFL advance continue our trading of to technology and in

we XX% that in achieved first GGR #X U.S. estimate we the iGaming, at quarter. share In in the

as homegrown Our differentiator. games to continue key function a

now For three in exclusive DraftKings across slots is more table games. Jackpot than our example, live XXX product states and

We March, races offers races this beginning DK hundreds international domestic also on Derby. horse including and tracks, Horse, racing of of wagering end with launched weekend's which the app, our three at standalone all from Triple Crown Kentucky

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

on our is achieving trajectory [ends] the done, business. about great and of work Our not feel we

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

EBITDA note are on on Thank guidance. revenue, performance non-GAAP for income basis. and XXXX our hit except QX that highlights, discussed, and you, our including measures improved the Jason. I'll statement Please a new adjusted all

margin than and quarter revenue our of results. up our up executing improvement with million together is XXX that percentage As intensity year-over-year, $XXX first rate. our $XXX adjusted handle quarter, We which more point is supporting in the adjusted XXX XX% better showing mix was million parlay organization anticipated, very in significantly EBITDA than declined, higher XXXX a Jason gross while expectations. in achieved basis our the hold outperformed points well, QX and basis mentioned, Structural of revenue is than negative in promotional our

billion older visibility billion each points in increased year billion. in pleased handle particularly enabled vintages, and results vintages. grew rate to state were $X.XX XXXX. year-over-year. same XX% improvement Adjusted state external grew In at our gross billion from full strong to the to to least least quarter compared at X,XXX of the more These basis have XXXX marketing our guidance year-over-year, spend range results us and with declined margin than and GAAP first least raise period XX% We to at continued $X.XXX $X.XXX $X.XX XX% XXXX our our revenue revenue XXXX, into XXXX, XXXX year-over-year. XXXX

EBITDA our to offset million outcomes $XXX to partially due are in which bridge our $XX May our retention, quarter, million and from improving the program timing stronger first $XXX book million We million increases engagement, $XXX the full full year were negative sports to a to to at customer also includes guidance year XXXX improvement full by The adjusted from midpoint. guidance negative the hold guidance by of our year recognition million acquisition of or February range structural sport XXXX loyalty favorable expense. $XXX XXXX and

the Customer exceeding revenue expectations of adjusted EBITDA engagement account million and are and for the $XXX improvement and acquisition $XX million improvement. approximately retention, approximately of

supported is of approximately improvement game and revenue accounts million our Our parlay also improvement. of $XX structural adjusted forecast $XX same the for by the introduction of Sportsbook EBITDA trend capabilities. hold approximately This percentage in-house higher, million

the million the first $XX outcomes revenue $XX and EBITDA approximately improvement contributed in improvement. million approximately quarter the to adjusted to sport Favorable

EBITDA Last, expense a headwind full million timing to adjusted recognition is $XX our improved year guidance.

This new greater expected quarter of of the in to first our be XXXX. originally expensed accrual that expense expected XXXX will result outflow. result are be expensed additional now throughout XXXX cash costs into a in to As loyalty additional were in visibility program, not

more ended billion balance expect first of our In new in generating than land scenario. under to year we cash the year to the before to our of and end million with cash of XXXX XXXX of XX%. inflection continue sheet, percentage, launch the full margin the for $X.X adjusted gross expected state EBITDA now to $XXX we regard terms XX% full plan positive With any with range to quarter adjusted year to our reasonable

In strong improving quarter, sum, we and are XXXX and underlying beyond. drivers outlook our first had a for

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

[Operator our Instructions] And from first of America. come question of Kelley Bank will Shaun

the to suite in Jason are thesis improved if Jason, what wanted is And wanted customer -- just continuing or your either here For quarter. on engagement, that? obviously, about to talk the I around your product in I performance, sense the changes retention, excellent get or products revenue

through think was I it pickup understand, of sounds what from And quarter? kind March the play like how does we an out exceptional just first DraftKings. this for

may talk be continue can both season? about you little engagement mix product So a your traditional and NFL cadence helping bit that beyond that

Also, I been Thank revenue it. monetization. customer acquisition. the lower retention, year-over-year I acquisition side acquired a on had Shaun. you, players results. think And you're on appreciate theme first-time of We XX% has cost It tremendous the right. -- we've XX% really more

really on too. front, So that pleased

similar year, ended difference CRM QX It's side, much flowing We've on we've Feb due be and we've the as OSB enhancements it betting things well. retention trend after optimizations been think, last carrying been the off this And after NFL Bowl. been season saw us. that year, and and products into the stronger we iGaming drop the our product iGaming continuing load a I the some on Super sports big bigger And just that really is seen the March. seems sites, to into doing been some seeing to year-over-year have late as well for as

As about think revenue maybe think on is the just state and just thesis level, as kind well? opportunity increase forward? are revenue And an contemplated Great. outlook launches. as that the that quick about been of we that's contemplated in the what seeing is the Ohio faster individual in you're and as what quarter, follow-up, increase the Or in here? going a think paybacks -- But we I that particularly Massachusetts around a outlook the

really, to mean, those see the launches, been way has which I the state about think in we've and the new is speed to been absolutely. into penetrated think seeing continuing strong No, we acquisition with population to it and a time used population, being both two single three-year pulled high the I for up mid- a sets digits in. payback, be is to profitability what to of to meaning that faster -- adult

be contribution those And revenue well. also, from will there more in here as that think we states

So a it's absolutely driver increased of forecast. revenue the

Shaun. I would add,

indicated, you're referring the increase is big our As that to. we EBITDA, part what think that I of a exactly in improvement QX

will our Company. come Bernie from & Needham question next of McTernan And

the margin XX% just to the to for XX% reiteration Maybe year. start, guide the of gross

the year be remainder any Just of just here? and given strong about puts performance thinking the the of for takes we should XQ,

we've that acquisition think biggest thing customer increased the is acquisition. I -- the seen

dollars users drives As promotion we've of that spent, are aware up therefore dollars. and the a lot in noted are the new past, promotion the

the are XX% reiterating being of said, That that same you'll don't fluctuations We on see certainly, year. any the we some But different see to guide quarter-to-quarter. XX%.

flow-through that something in up the see rate. some You'll -- of show

part. change year outside percentage. range probably don't to moving this that's of biggest So it the we overall, But that for expect margin gross

long-term any But And long-term potential profitability, or step Investor any results of really on those now the wanting toes of Understood. future changes to back-to-back profitability maybe you've maybe strong Day. to quarters on now sooner? thoughts that to on posted getting targets

right. you're Well,

at that the are Investor Day. We covering planning on

until then, about will So but hold say on to later I'll that certainly we year. that comment on more this off have

from And Stanley. of Morgan Ed our will next question Young come

pace X% XX comment How drivers in is what the that sort you continuing 'XX reflective X, this? faster the that situation actions to you're My even others the to And in stage further that's the Can question of of I of about of any of market? Slide your the improve relates wonder cohort. to if to in much The related you is talk suggest that customer the paybacks? How Massachusetts you've and on informing those to of just guess, acquisition. the terms could of competitive playbook? the achieved paces first, XX at extent were that of particularly, I to days, of increasing much

think I above. mean all of do the I it's

the our just contributing I right think now. tailwinds all factors are of three mentioned, in all you factors,

to much now this are So point. -- X dozen one, our I at states think go-to-market. we've very optimized close We

playbook. feel our So state I time think to good really very and a about new had optimize we've of that lot

seeing shortly of of of of ramp launch, an seen hadn't in switch as past, was national -- part I which the made case maybe during advertising really, in the that new of that NFL following that And Maryland, it much these to a at state which case season. more in season, came you're late effects in Ohio, of Massachusetts national think, and quick especially Massachusetts, advertising. the lot that Secondly, the a the probably or the a states result a least advertising, for NFL the

Ohio -- and on Massachusetts national long. and advertising all our advertising saw Maryland year season NFL all

states. People also a I in different playing. the of think lot travel industry. They friends have there's momentum to

helped with So I faster ramp. think that's

And competitively, in players few the I market. right, do think driving there's the also to that, more that a been consolidation two lot think it state in that's well. I launches the top last sportsbook And that as you're

Great.

follow-up a Just on quick iGaming.

to anything market of the improvements some well? about leading the you into of end the informing different competitive of just that again the I primarily do particularly talked But You environment? the NFL in sort terms iGaming. seeing in if sort there question actions increase? March. Are through Or environment internal Is that that of on it's as you that's internal season think could wonder of share share you broaden retention

I both. it's mix of again think a

with you're which that gain in sports we well we think share between betting, certainly continue so as strong is betting in I think as I gain iGaming the cross-sell, going if good we're doing. do because we been job a naturally also that to sports have seeing and share both. to iGaming that cross-sell some the

So factor to that's big I think also. a consider

Deutsche will And Santarelli from Bank. our next question Carlo come of

on in maybe points B, you XXX give level? A, you could parameters the hold what the of mentioned around had -- Could maybe that not in influence of put kind an you around, And looks Jason, basis your us up about absolute maybe was sensitivity parlay estimate on number that? basis, quarter, year-over-year. prepared kind like some stabilized a some but handle of that remarks perhaps at that an

rate? hold The

parlay the mix, the Sorry, mix.

-- yes, disclosed we don't I haven't that.

well that was was unfavorable right at, that think for a increase, a that -- looking mid-Xs. a now of we It were and QX, in little are mix rate as XXX-basis-point at drove combination I parlay increased year-over-year last hold favorable was year year as that a least the bit outcomes, the roughly this which and increase.

Great.

number believe was state, Okay. percentage $XXX as revenue In little do about a that million. year, cetera? of over guys post-launch, to marketing bit then last think follow-up, you Probably revenue? how steady And et I a your a as relative

you're think I what in state X% did in of I the believe, we -- to Day. Investor Yes, our depend launches. right, But on of more? course, long term, of we little our X% think it Investor XX%, Day, revenue? About A in say? About short term, revenue does bit I

to revenue for think earlier from an I up updating comfortable I the think those as And right new grows, it as we we're now, need doesn't we'll So continue that now, I noted saying on think metrics for marketing that's number. at mean there. Investor later of think I be year some Day. would this potentially question, But our that that

sort our it you revenue snapshot I level of there, at But right. about grow continues either. Day, looks of the that, to linearly to think has that Investor think grow to the don't think if put So think last take that scale, from also I marketing in extent we that I I

the state sort to reflect marketing look is our see expense are Yes. provided that those percentage acquired. dollars the a in perfectly good the LTV to can we'll order states, marketing to in that older you dollars continue in the of states. Carlo, marketing seventh those to adjust I declining statistics metric. total are of left the that and And at -- as marketing we've as Internally, CAC adults think fifth, just be outside a year on absolute sales -- as is

Barry question And from come our will Securities. Truist next Jonas of

about here? We've across thinking Great. space M&A seen the deals Curious you're some recently. how

not market U.S. seeing No. the of Right like We're competitively. in very strong share a consolidation focus We're feel executing of organic really really ours. we it's growth. now, We well natural happen had

road, our But right I focus. couldn't execution. moment, M&A think more focused So very now, the it become mean doesn't interesting. And the on that's we're that down at

legalization Great. you state And just the maybe a curious perspective, where iGaming follow-up, OSB? today? exists what a expansion for opportunities are as from And think, biggest

Yes, question. it's great a

that I we'll a there. ones the passed now, shot this Vermont think have factor we different are and can which Kentucky, have this bit have it's bills are any seeing the and update of expect moving think of we We that we'll I right shot I of timing day, the I August It's to course, on hear launch, any by more North year. but active think, already of the the to that that by see. that, Minnesota, clarity what don't little states the Texas, future Carolina, best yet call, year. relevant guidance, our there into have extent a moving.

the of most I chance iGaming best front lot year iGaming the I side, think good of this has a And year, there's then have now. Illinois. be bills the probably a state shot know on don't that I right that the would think moving them of but this on

Wells question next of our come Daniel from Fargo. will And Politzer

I color And handle? wanted moves could big taxes, what processing these we've if little in more a a more bit be and quarter-over-quarter? rev the margin. and that dive little the but GGR and talk maybe this gaming pieces great. of about bit around the and would obviously Because was to bit, here already kind Obviously, this of tied was nicely share. there versus talked came a terms a which just above. I upside, it are mean of gross any source to to wondering unpack I costs puts costs, platform you takes in of into

gross think points. XXX year-over-year was by Yes. Good I basis a that state rate margin on basis, higher obviously bunch I of a Underneath is complexion, question. mean, Dan.

QX in So you've launches to with Ohio the of dollars, in a Louisiana promotional At through rate same promo Massachusetts. headwind is we're and got time, a New XXXX. which the investment lapping York and gross margin heavy QX

tax the thoughtful on one us more and known probably to continue other bringing we within rate cost, platform taxes, about of talking any Platform margin period. given game sit that rate. in offerings OSB iGaming and Bigger those of in-house very the a impact well that are be costs, hear both statutory largest side. gross you That's vendors from our our picture, fairly factors elements, about

in of then in believe market terms rates operator, states fantastic And access a we that market access, do fees. as scale we get the require

margin and gross those the I So elements levers think rate. biggest are our of

quick one may. I And it. just if Got follow-up,

Third think quarter, and we uptick an I'm really is first should you there season, promotions have some there. the aware an there's of? I Or for maybe maybe there that that Massachusetts, Ohio, don't in Maryland, that be changed should expectation expect football missing even much expectations maybe you Is -- there. element

Yes.

really though probably a slightly the should customer right HX probably in And and margin those net sense given any acquisition saying that there and assumption, states will similar sort was going it audience on an of what I that acquisition March we how some on in you're be out we might the yet, better a hasn't the Madness, significant trends that, gross of thought. think overall, takes Jason definitely we it had be there, side. to but we've But puts to than which better. There's I is. too, results lot of expect think in depend the that's strong Massachusetts acquisition baking was there, in out early even still increased football even there's and QX, knowing are seen

NFL that at in it's on much So which predict falls versus how little in acquisition a the of depending in a how much are early to just falls stage trends, states question season, QX. QX really of these hard

from Credit Suisse. Benjamin question of And will come Chaiken our next

quarter, XQ. prepared to targeted cost your last you XX% in are to Jason and low fixed XX% you you to letter cost guide? previous Or moved in about it still think comments all? for Is around about it fixed has be cadence How single-digit thinking XX%? XX% I talked the that in the I up full year-over-year. remarks, year 'XX in know the at

digit the that costs were to as out that. could called basis. fixed maintaining And absolutely, we on full QX, XX% higher than single see in QX you a the Yes, XX% year for

So fixed yes, to XX% cost XX% maintaining year full the growth.

this that implies marketing the doing to if advertising, external in on this external launches there, coming pleasantly think kind that question, down -- better are product? new to about to I'm flat all you you state states, then digit will, year-over-year in single-digit And of the is dramatically. low marketing decline have low but surprised? fly, you single Okay. Carlo's of which is How roughly legacy this implies Is kind then do it? plan? And pretty national Or according you some

certainly, No, I we're with I what trends is is according speed I it the a surprise. pleasant think think And happen plan. expected. are this But which to the seeing we think

land I flat, will be on year the believe. roughly Where we

plus earlier, as noted real results, think some we very Jason based are the data and looking that time. Park I this occur minus on at there is or could much fluidly treat

as how especially we'll certain pretty so is I we're where there. And think, -- QX, pretty we see be

on a is little of I flexibility think results. QX bit depending

with think think expect revenue flattish expectation we come we that probably But also little And QX. in spend to an more, incremental I range a in year-over-year. be I the would if

EBITDA the So adjusted think would change on anything front. don't I

will Jed question Kelly next from our of & Oppenheimer come And Co.

term. with hold do I if of how managing Two, may, the Great. right maximum terms percentage in number want think approach about users? generate you to the the optimal Jason, one of you longer

states. follow-up my in growth vintage very is, strong you then And saw the

users from? are new being I Nugget? Where unique organic? think coming And growth. said more Or Or users? user all Golden age? include XX% are Is a is getting you actually that those that legal you consumers unique does that

Yes.

think. I

question, we first the on the know yet. answer So is don't I think

rates markets due to targeting anyone in the simply you the significantly legal that than higher have hold the there's frameworks heard some U.S. If around I've look world, of is there.

if points. try I one a treat point there's And very I together. we're a of of us to to to key put a know there's product to for lot variety And the puzzle it fit. want think market data iteratively. that there's moving much really were is -- But going parts,

think increasing they take, get by not considered want people So creating making driving hold out retain now, that products being players to that or really the continue up that of is and and that right meaning and worse is odds the they something message. well I on enjoyment use is

I things the products But lot that, of extent we talked have ideas, certainly are think a and doing like there's we keep that I that, that. think and So lot out where to obviously, and a we other cash able Parlay driving about to opportunity. there's like

we it think how the rate. So is we're outcome, about adoption? sure and drive the these get retaining are on do more let's is. consequence hold -- the customers products? getting higher up do hold we internally not, way And we these from of How that is hey, And make satisfaction

continue to way, And upside company. ends think And deal I watch still data we continue of be to we're going if to probably guess, is and there's good very a a it anyone's approach it as there. data-driven the so where that

question? what And was sorry, the then I'm second

in states? XX% vintage coming user from is unique Where growth the

market. There's vintage given always TAM, the so the meaning older reached into haven't still in We ultimate people new coming we state. a think

remember, still to less have We this in into than five even oldest states of years the we're thing.

around But for I and So in New it's has of guess Jersey, for I years, than been New or longer. five anywhere -- around four outside iGaming, been either. iGaming has Jersey more OSB mean,

is the most. four think I years

growth user innings. And the still continued So you'd think really, I population. to market, any that most see this expect of it's and penetration stage at early continued of

day you're lot of with there people product, -- and don't I moving under always X. like on out there's a any XXX% are legal just that always So parts. coverage, are people get reaching moving state, the the of adoption in are think right, you it there of age But is

avid And consider a do that's we're when excited less customer market you You this targets that we that users, customers there. as I to But and most more time lot and more the some intimidating, CAC a out that still growth think, too. setting the get user casual on. there's is our products something goes get for and to more of create that think I lot can of easier understand, be will appeal continue. we the can average mainstream product-driven, that The the and of

from And our of next will question Fishman come Robert MoffetNathanson.

discuss backdrop, to Given the ad know paying weak year if how year? current compared can national with ad how that's playoff compare possible the helping in on additional for much your you don't market and just the Maybe ad buying I this both efficiencies, last basis? you're to local spot an

been are there inventory, perspective, you placed is in there doubt a kind advertising. been It's of the it No it's channels. happening definitely some board. has look different on if because certain from for across specifically at in limits of But reduction for in offset market that channels macro different our a rate categories. that There

but has example, think an put spots number, on, the X it's some on a per So restriction -- game. Don't as game. me the NFL X per I I it's there's quote believe,

XX% and So no at macro if maybe and alongside where auto in but media, ad have little there's in reduction a we've have why in increase goes other have naturally, part actually and a to It bit, doubt, QX. of see a others me, excuse same competing market. get a rate, percent that's look are in when your such decrease you up the saw and increase effect, that XX-plus been that decline customers, you in But in basis, a optimization, things. customers, significant insurance of -- forms of CAC, kind a it in a the we you on CAC able usually don't doesn't usually and with changes that year-over-year driving to been

That of sense. lot makes big maybe just And a a picture.

it competitive long-term DraftKings us seems current clear you a the this to opportunity. winner at for landscape, as cemented that least With

your from even the to market plans share close you about with growing here FanDuel? So just maybe talk and can keep gap potentially

granted. I take first, Yes. mean, don't anything for we

or that to we So we competitive we bank anything anything we can assume won that have be assume don't going there's that yet. very And always we market. a that on

And like iGaming chase competitive very on think a company. think the we And on the keeps for down. feel been a competitor the the And It No market down big we've the first can of. for FanDuel in share chasing the in of doubt that having is helpful. to we're #X side, similarly, drive OSB of also we're I pass which I side somebody edge and gives time lot QX, proud in to BetMGM. them iGaming, us able

innovating have to best we time, It's over believe to customer best creating also and So definitely, helpful product, we I we that we keeping same the competitive take new new think, we time, that's be having that And can granted serving understand for products and on and who the And just our focused always key in the and the employees any and time, new be. at landscape assume anything features. experience. competitors driving loyalty. that that is customer to can't need enter market at

would comparable. a of shares DraftKings customers mix focus rate large they relative -- that both a I the at market and -- to to enjoy. area of and our basis, handle is again, product rates that year-over-year if And continues you increases hold share additional FanDuel bringing on very products reiterates be look handle through add, it are our just fairly hold

going rate, to to continue with we market relative in share that's help hold make as progress think I vis-a-vis FanDuel. So

next will from And of Stauff Joseph our question come SIG.

versus in Asking the second is about this quarter. just frame how last, year much your wider, especially product depth say,

wider and Knicks business much us. into and So five as huge how for May, can know second see in versus especially I betting going which last? Celtics, for states probably Especially have don't handle? Like how of kind Obviously, frame it you play. product NBA still is I quarter

I I mean, think -- year-over-year. right that No, first, and is night you're really day the product

a look as but our haven't were extra where standpoint starting we in full I progress as we iGaming, belt. the seven not migration. And think, we've from much quarter our the at Sportsbook a now into going months removed it under that particularly six, made from about QX, product, year had you last was

micro baseball introduced and nobody live game We're didn't We parlay. space markets in with same even sports same has. that ago. else years the have really company several game parlay other NBA, only for now We've a the that unique X.X are feature

Now market. MLB also same same the the the have and NBA only parlay game only we live game parlay, live in

We exist added on innovating a parlay and that other continually we're last markets didn't of year. features. number And many many, insurance just

right. of and been So the a win not of compete well I in to has capabilities our depth, terms the transformational depth terms market as features think and breadth been you're markets, of and just the in of ability The for to share very but there's increase although certainly, the exactly amount tremendous market, and in the customer.

us you just your be to remind and your us particular? initiatives of market? in can remind the then just in -- efforts And GNOG, on And say, maybe implemented fully,

Yes.

we migration and believe still -- is on that focusing the track. GNOG we are there, So on are

to I of of the addition we've that GNOG of get terms in why has market think good been -- story able a certainly share. to #X been part it's

still did deal. platform, of still we on think really is are we're ahead as I put majority realizing all when come. the synergies I we the will because think that as our say I the the out And that on long it's that not there those not vast best the

easier customer So use, just the about cost, the I sets And we're I just with there's our when of flows and not obviously, at converting superior easier players, better cost that that on between know say having all savings. migration. I on new the games, smoother a rate cross-sell revenue also merchandising, monetization -- the acquisition think experience, we But to on the PAM for a fact better a product is driving superior conversion side, users think very excited customer than rate. more GNOG

good things we So haven't there, realized lots them of yet. but

to materialize and about back start hope see the the excited that very year. So of of in to half that some

of our next come Lampen will Clark from And question BTIG.

the entertaining call point so business in whether a U.S. or lot feel covered that you'd bit business the broadly of far, medium we've we're to a given comfortable a curious positive either with I'm markets? little overseas that near expand Jason, the now happening on the more are opportunities where maybe already more term things at

significant, us now, here to so in we're very we down positioned that the some right point U.S. and that, right become U.S. opportunity road, focus. is international on the For are has At well the be now, interest, the so the but focused of will

create EBITDA is of give us the we incremental strong of building markets same leverage cost. add -- same the side, a international without expand These time, understand the technology the where and on things capabilities side. the because that obviously, into that tech to And a high ton really margins that lot having usable be will and product at will we're product we

we're investments faster we the possible. now, down road growing U.S. strongly it's are We're we But and at The we the So growing as fuel We're so clip. continue something right in stages consider. to share. positioned. are that we is still our to very much making think as want a the infancy working, market

betting have means it's the of to there building there you magnifying and curious peers as both the of FanDuel, consider or a market, seen one of sort coming is some OSB product. your acquisitions to is improving widening picture iGaming, bigger sense? of first-party is sort the bolster where a that of Understood. offerings. offering you, then trend? Or rest We've that looking between more would priority the that and market, sports gap late whether And makes really in-house I'm additional their maybe back understanding

I some road, will a at point down this that's consolidate sort that of either. We're point. And at certain a evaluate then think, market really the think At that, share I don't ceiling. organically. focus reach seeing we'll And that point, that

But we distracted mistakes prize that instead now, your important And prior team just something to all think is really just think feel right continue the working. time what the on getting they make And right that's is on like that's the I eye similar that -- we're focused feel companies something when keep question to now. have the doing to really answer we of working focusing. I by

from Beynon next next of And will Macquarie. our moment for One question question. Chad our come

But of providing structural look comfortable with could that you that QX revenue target with anything And of that that, led hinged or moving about like? As slightly these a how called higher believe there seasonality, you're is about which terms of normal. understanding that hold really was what year quarter normal What's we changes, XX% just fourth in the all it's than as to performance. the us could that the I middle strong the to look? we on think guidance, think is out items that

that Yes, it's low comparing you're we I question. great last QX of last unfavorable year, mean a had sport outcomes. unusually to because hold think if I

swing annual focus of on you how halves around So we much to given and some really expect fall guidance relatively why part in that quarters. and quarter, color or in more any giving that's can we different

a it But on that. bit little based does vary

of tends course Although out. to even the over it the year,

Also, the see like see things will you launches you'll and of timing that. other in So depending of some revenue on fluctuations distribution. changes terms state some

think why is So and poor in that too. hold -- we we bit did see year, a really structural there this I QX some had that's that's was relative big hold still changes outcome-driven. different low been a have really last sport been improved, have that last outcomes year, But really to year was it And difference.

effect already improved future what was half far quarters, of also the taking lot back last the of As year baked anything as into throughout a year. we in

our we've realized upside half initiatives forecast, was this already some other could that we We that we But we year. baked of of think into have in the have a of lot things to last lead the know back year. that that

of in the impact of and we bigger some QX to a see as get potentially you HX, whereas year-over-year. QX kind first in So as lapping closer well, part that of is

just more expand you Helpful. the done Okay. of in live other these with to of tie-ins, will partnerships. media respect kind some partners It there And exclusive appears media you've if opportunities want with be broadcasting then that to space.

up Just if is opportunities failure, some with to next XX and had, wondering that exploring maybe some months? what exclusive worth XX the deals you've come in seen, from you've engagement could higher of these a the it's or of that those success

continuing I thing. And marketing. mean, there optimize us, big a for optimizing deal-by-deal is to part our think a I of really Yes. it's

from at year-over-year what point, on what decade-plus types media, we Fantasy from our our big of sports part of a of So but just data, not That's deliver types have optimization. almost now results. been this Sports, Daily tremendous five of betting, of years

on has the a environment question. we I noted which previous market improved, earlier that also think

a to lot there's And like evaluate space. if the to deal-by-deal we of the standpoint we a So were And media take in each is from the deals, on basis. deal do spend think and those well? can market, as same we open them the at do we them why least tie And then well, as could dollars we least if on up? at hurdle

sort in has would feel at strategic dollars of a where a would we for that efficient elsewhere -- us sort to pricing good It a access in us. spend it so something or of having or deal make tie would favorable versus tie-up have it be dollars give deal that sense wouldn't that like make So flexibility it increased we of some advantage scale. either achievable some to be

come from our question And of Robin Farley UBS. will next

improves if states the smaller And guidance I to questions. know I to increase X% users? also I'm typically unique this a is GNOG few to don't One how being mentioned legalize of just the the And on that quite to every population. XXXX. that, the of you question access of have a -- follow-up. those contributed of to acquisition in kind had you a just achieve clarified would year that your sorry, having I XX% much for two then increased take population year X%

sort I referring I you if those guidance, is organic enough -- maintain obviously, to for If legalizations you're am growth legalizations other -- not XXXX? if if issue, but don't one, mean, to multiple is really existing this you don't from your there an the of year tax get states see even multiple

Robin. you, thank So

we actually On like-for-like. the first question, -- it's

just the took wasn't GNOG it in we it kept GNOG base. and So and in added

little a In XX% bit fact, that drag you number. downward actually at if of look it's GNOG, a on

but brand, looked So have included. just actually DraftKings would at the it higher all if it's been you

-- that's or in where you So And above right? on. think a if it's going bills second are question, what we scenario that vary right I And on far to as look see year-to-year, at there. the below as you could it's right now, live, like forecasted

range If Vermont get if Texas and Texas up of that Kentucky you Kentucky. plus comes already through, if that expectation set still passing does Carolina, an is Obviously, then not, that Minnesota North as we alone target. the into end alongside sort over

are potential then those get of some or above. those we of to bills at either think none or if I So passed, won't. obviously, scenarios And

kind too So I the call that. in think year early of to

revenue state be As far that seeing in were in what mentioned still vintages they I older as the implications we year-over-year mean our nearly would and double earlier. growth We QX.

that And this less five thing. are I years of remember think, oldest states still people the than need to into even again,

TAM, long-term or year. we're much there's of do legalization, so we happening. ton above organic too to see think, out I wouldn't whether but below growth of I in And make just state any a still need to continue

revenue a that XXXX really states of the expect one In to year I we that. this the don't implications acquisition, the will really because If throughout of There might numbers. see is be user on tremendous lot end up less fact, legalization, 'XX. difference XXXX interesting specific like would new legalize things launching a

will less would lot more legalization. bit, we So it maybe the would needle really it in in move obviously, probably effect want But mean have XXXX. the whole EBITDA a would the little term, more state ton. a to but revenue, not won't on be more -- Where see a short mean an legalization which, state less really EBITDA, on

kind it's to way So interesting I look at it an of well, think. as

Securities. Bender question JMP And from of our will come Jordan next

those save about maybe with consistent legacy think still is If those there do cohorts? you intensity your markets? players of international think we promotions does the on it customers, to coming room more more from promotional Or

value the worse right the so more get we that there's effect room. to. generating making sure need it to how can't actually targeted create they're And I don't a by alongside plenty similar to the dollars think things and that at something There's a just we be we GGR promotional right levers proposition, experience, definitely, of want. incremental we people having the you and hold, worse where look customer

number then can look of out different very you going bonus that there, of the which Europe across can and we've of markets. matures. hunters natural still trend pull. market been think as There's levers that decline you're And And all still a over in you time optimization just that the There's there's I see on. sorts focused to see

feel area no So and no we doubt, there's and real the And target. at player team. absolute the still about maximizing that's for focus It's NPV certainly there's time, room long-term value. a like there, same still

promotions say So pursue if where you we're pay flexibility we leaving want can you to well. revenue that you also the retention and to through quickly, drive wins that that really back can find as increased then

cross-sell a of is And DK a more on areas for into revenue then be about my that as Or Great. the that for Horse, follow-up, of business? should we other you guys? kind thinking driver of opportunity

think, it mean I rolling states We're on will now. It's a it year. still in, minimis be XX fairly revenue it will de I the out. impact, have but

of the in still doing that. process So

kind have probably, through we'll of information that the we what Crown, get can Derby, more to the think Triple I which I we of Kentucky customer us once sense give think on expect. particularly more acquisition say will a

that it. felt really, I you'll long and to and smarter portfolio, impact. of to year we'll revenue we term. wouldn't to get enough Sportsbook and our utilize a think it was bigger is as product it But iGaming, also necessarily this between that integrate whole I work lot something about bigger And important to better that add a and see continue And I to to new cross-sell product it's we think still ascribe in how

next our Group. come Craig-Hallum Capital Ryan question of And Sigdahl from will

Nice job. Curious on Massachusetts.

by important you to psychologically that that was So your running your in lead. Took Ohio? strategy playbook commanding nicely home battleground? or you handle a share say applied very I How your normal the Maryland the And guys early did defended change win turf and guess, versus #X you spend there.

just unique making clear we think, strategy company. only the that's of I obviously, that thing it And was that to here. changed really, terms in hometown a we're

same the other was So it than pretty that, playbook. much

our England, New think love particular, tend we own I in to here.

new like worked. a this really feel market was acquisition and was a we good It perspective So perspective. share effective very customer market, and a it for angle that from

to we've continue that. But over optimizing the that same playbook it's we'll been XX-plus So otherwise, do the last states. state

in because And similar quite Ohio a had but in acquisition I think that was saw the biggest share, well. success adult and similar penetration market you penetration, and adult we've much penetrating reason that maybe Maryland not as as

products it on And live Major then Baseball, people what League just is my betting live total? a follow-up, the incremental? and for same has parlay game just Or NBA, for in with accretive game that in the accelerated are than being betting shift in rather margin

both grow. talk also think lot, incremental. we in-game seeing we're we're parlay I parlay. know now, that right it's mean I but a No, I seeing about definitely

So of lot there's upside a there.

how I the But has for people figuring in video same game type in-game want no do parlay in latency to who doubt, driven feeds, the get think of to game. betting. live lower out upside that engagement biggest increase play-by-play an is in just

will come next And question moment from John DeCree One CBRE. our our of for question. next

of that tailwind. was structural is customer customer about promotional frequently. also Maybe retention probably about more, from first what they're presumably, moderate your that that nice wondering is a of hold going rate bit is success? little value the already. going nicely, yes, coming components with spending up if is you a in kind particularly which one, kind but but talked is I cohorts But So we've really seems summary then of driving you are to or coming this if increasing which of a morning down, and couple vintage up, think could be back more talk intensity

chat that lot. a our improvements helped that the I our -- product with been And had of stickier things product a significant including starts CX really I think it introduction focus. customers. We've think other experience year-over-year, think I customer create in big and has have will

as Super think of retention it several cross-sell lot made some a relates Our year-over-year for the front, that, the years in and CRM, iGaming. has optimized especially been marketing on now. Bowl post of we've to improvements And into I

has think a done I team fantastic CRM job. the

been execution the across it's business. Really,

a really I think across the good been whole lot people it's of company. great a of by work lot

maybe for And an helpful. That's Jason one Park. easy

that end and the year past, with at improving, around balance at point? profitability but In cash expected is that this with comfortable the million. think is it to think to of $XXX cash with I capitalization trajectory your be assume you're the I still comfortable capitalization, you've been fair

for need Very capital. comfortable No capitalization. our additional with

back I would closing like to now to turn for the conference remarks. Jason And

a look few the all in and safe and are the you to all well. and you call. weeks We're forward and us you you. strong stay for on next today's start excited beyond. XXXX year to Thank of joining Thank I off hope over the rest with speaking about

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

may now You disconnect.