DraftKings (DKNG) 4 Aug 232023 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the DraftKings Q2 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Mr. Stanton Dodge, Chief Legal Officer. ahead. go please Sir,

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

Officer, our I then Financial will Chief Park, report measures During in of most on Robins, Executive Robins. our an the management are that substitute our financial GAAP measures These Jason and a earnings in we to filed now review open our website comparable of call, Chief quarterly on DraftKings' useful will results this call considered be the who Jason turn in non-GAAP these a the financials, and also as the performance. financial Hosting we in with for discuss provide DraftKings share prepared and directly will Co-Founder have found line SEC. available Officer accordance measures measures today, which DraftKings, GAAP. operating be presentation, update the we questions. who can opening Reconciliations call remarks Jason will our be business; will some and or Form on DraftKings, and with to certain should not believe may over in non-GAAP of isolation XX-Q to evaluating

the you and Revenue quarter. to about be And EBITDA. we outlook fiscal significantly all significant our EBITDA in thank outstanding generated importantly, second XXXX. joining. for morning, to today quarter adjusted I'm talk adjusted expectations year with positive improved for exceeded second and you Good excited and

increased revenue $XXX to XX% quarter Second year-over-year million.

and our improving focus we same and is is which organization. time, the our core our rapidly been and driving of strong remain Our due and customer cost excellent the products efficiency, has enhancing focused revenue growth At on revenue tenet a to retention now experience, of relentlessly continued very trajectory monetization. growth efficiency improving mantra our on

of delivered revenue capture million adjusted to EBITDA of result ongoing the a growth and our efficiencies, As strong $XX efforts in second quarter. we positive

$X.XX are We $X.XX of billion, year full year-over-year to growth the range billion of implying increasing guidance mid-point. a our revenue at XX% to

includes in quarter our Our of guidance nearly revenue fourth expectation $X.X fiscal the year XXXX. XXXX billion revenue of of

year $XXX range EBITDA We million May of improvement and guidance. versus a our year at of $XXX the improving adjusted are guidance full midpoint to full our negative negative also million, an XX%

million this Our fiscal EBITDA guidance year $XXX million expectation fourth adjusted of year. to EBITDA the includes our XXXX quarter adjusted of $XXX in of

OSB product. our to Turning

tennis We have our Same including live Game on continued differentiating and to MLB. added college in-house Parlays and and sports, content. NBA, football to major Parlays golf, our Game own powering live now markets basketball and betting for have Same our of focus live college the for most MLB, NFL, built We

high our including content, through with We Dealer improving more on focusing quality. In Jackpot velocity Live are a and product while differentiating in-house executing fast very Offering. strategy we're X-brand very our at iGaming,

impacted share is second share XX% currently live, differentiation Our persistent of the In GGR achieved of the OSB XX% COVID are focus the we trends. the were they on have in of states we been quarter, product quarter in XXXX. which handle where already apparent since and highest share OSB

also iGaming share We and an GGR set position our XX%. #X all-time GGR maintained for iGaming record at

for excited very are we ahead, season. Looking football

our In NFL ready past the and place. their over the proud particular, I culture we put relentless start months. management team the in and on expense and of the for football. of have efficiency dialed and of in focus for has NCAA am XX team I organization entire am Our proud

feel to trajectory and achieving done, is Park. great about not turn the it over Jason [indiscernible] of of that, the work Our we I business. will With

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

revenue, As XX% Jason revenue We which up is that our higher executing mentioned, million our and quarter, than organization very of the is well, quarter is the results. $XXX second in in showing and XXXX our outperformed transitioned positive nearly NBA million successfully into of EBITDA expectations our year-over-year the million retention season significantly on outperformed $XXX MLB. expectations, engagement $XX by and customers adjusted we from improved as Customer and a basis. achieved

compensation million XX%. better-than-expected have significantly full billion to by was customers to promotional to our results results to approximately the through more year our improvement guidance into These were in the and increased increased with online XX%. XXX XXXX. In launched were billion expenses our discipline more midpoint. while on to In at growth expense. points $X.XX enabled $X.XX due also Fixed quarter, that X% point revenue more range strong our above as gross XXX than seen product. manage raise intensity have MLB, billion pleased states, hold rate from Adjusted declined more more XXXX, billion XX%, slightly marketing year-over-year. vendor-related year-over-year while expectations expected than continued supporting in the States. unique increased than than approximately external rate together in for or exerted our particularly than better same us on we margin $XXX basis handle costs XXXX sportsbook, from combined and improved quarter-over-quarter XX% at margin accelerated mature compared revenue iGaming adjusted We these enhanced to and states to basis XX% total $X.XXX We and than more the XXXX improvement gross engagement our Structural $X.XXX increased period visibility our

negative improvement sports book tax in launching by Kentucky second EBITDA account year for to revenue by or being guidance includes at the full $XXX May stronger increasing quarter. XXXX our effective negative engagement, guidance the XXXX improvement acquisition adjusted from items year $XXX $XXX retention, from offset million are favorable X. Customer and rate due negative full customer EBITDA million forecast million sport improvement. improving acquisition partially now expectations of and current million range included These year million our this The to million outcomes $XXX guidance million Ohio's and bridge the exceeding to $XXX to We and year of also the $XXX our $XXX to midpoint. increases adjusted full are retention, structural are hold XXXX negative our and and July and engagement in

accounts million percentage structural our $XX supported the game and book is same higher, hold markets. revenue revenue forecast Our parlay of million betting million $XX capabilities also improvement by of This in-house $XX trend and and EBITDA contribute sports to introduction EBITDA live the improvement improvement. adjusted improvement. the Favorable $XX quarter million the for new of second adjusted outcomes sport the to in

excited Racing We for of online Commission set launch Kentucky's anticipated. are sooner recently which we date target a September previously sports is than Horse very that betting, XX, XXXX,

to went expect of year. expect July $XX from which additional million to Last, and million additional costs we $XX headwind Ohio's result, adjusted we of XXXX, into XX% a XXXX to million EBITDA. effect X XX%, revenue of this in tax result As $XX increased a rate in

year expect we be an guidance full from adjusted In terms to the XX% percentage, in to to our of XXXX improvement XX% our gross previous XX% now of range, margin XX%.

fiscal sheet, We with as in our to billion. Kentucky. With than the now XXXX, year balance second profit, adjusted external billion our approximately grow cash includes ended $XXX year marketing $X more we plan million expect which to quarter investment into to we $X.X of the contribution end define with less gross profit which and to regard

be As year. In our reminder, remarks, we and expenditures had strong we slightly year for football net costs That $XXX capital working quarter and the concludes and excited in are approximately the development capital for we expect a questions. positive XXXX the for season. and line will a very software change upcoming capitalized open sum, for second of fiscal now million to

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

of maybe or market core Jason product gains, truly just think off, just I Jason, obviously, comes to a dramatic improvement. this to share lot start and back

if been side? And product wondering color big think bit a the stories XX%, little on to you on maybe OSB of it your you over quantification terms, us give in the have last realistic is what share was handle at at the take XX% would I months So just put outlined gap then X, the success what OSB could X it a goal? that share to GGR between you and the that narrow X,

Sean. you, Thank

lot So first of product, the been it's question things. a on around

think I over that X.X think careful. friction really there's I for a been and friction focus if you're big can the has lot throughout a things the it's customer removing not journey. And complicated very of customer a last years create us product,

the big greatly can think last to we're better in product obviously say, options So enhanced have over deal. parlay same market. well. have best of that's X We've the going a the our huge That's objectively And live a betting gotten story feel months. offering. think in been X to the part our I as been I game HX, I we

So maker really you difference excited as big that. the that's And about think noted. I

have share can't obviously whole no and a rate and to continue to do As gap as that. We've that handle the we to improve between we're share, closed working continually quite far I believe goes, reason bit GGR that.

from Instructions] Next come will question Stephen Grambling [Operator Morgan Stanley. of

growth. back marketing I much to like lower It looks and the for over assumption half, going I'm in change think, costs. effectively, very is to the

still or as it or year costs, could the that or up be half guidance beyond? could So we be look we into the into we reducing on are big you're there for to considering seems next like second that as contracts continuing renegotiation focused at be look out

I it that's sense come time at it's deal a and good Yes, what And up, are price. question. continual always thing. whether continue we reevaluating to mean, a we a have every makes

over So course we're the to just continue of optimization there. to our see going lifetime

and with I well. the line I also better think promotion we think opportunity can share same board as if do gain to market generate there's thing across top marketing, more

those areas the for So core the company. focus of really are

I have probably the there. for the so to cost I on year. certainly, last the effort next that fruit is there's significantly optimize little bit think mentioned. that a some But X.X on I intent slower there's low-hanging the has or been And growth really we and -- that cost corporate so to much some fixed room the really do there years think levers We've side, I think picked. spent here of

the But clarification, kind are as national guidance are contracts embedded those reductions? any in of cost in terms of a outstanding? the Or bigger of of kind quick marketing still

come things reductions this up, but any We, guidance I any in embedded renegotiations have favorable the always cost at don't as the from that. any certainly, building we into when at mentioned, not we're guidance. No, point look of

Makes sense. Thank you.

Stephen, as If has to come we're going that you what them general -- through, lots of them know, bake in we not. have been know. guidance things our may may of on, approach of working some some to we we're

we number. anything adjusted bake then kind forecast as We We we line. at or probability know. any don't anything we drive at upside. look market like well a might And potentially describing like that really as look gains So else as that top of additional what share you're

deals implemented more much Stephen, marketing chance add, industry. operators more these a other than And frequently. smaller expense and give performance as duration actual team general a the league are have the would that evaluate total of percentage to short our types of us some in the philosophy, deals I to we of

[Operator will Jefferies. of Katz question Instructions] David Our from come next

backward-looking going in how you So the that Can about focus. to-do talk product about you looks list as forward removal to your on friction just comments, sort a track? a and keep of talked product the what bit winning focus more a is

there's that this area that and It's question. states regulated the It's there's still gaming, funnels to lot in you left there's a there's do. a lot to that lot that think and improve where always of room mean, to but experience, in digital particularly true to a optimize have quickly. requirements of a the launch be that I very great I product of is follow space any going an your

get we with So sure the how we're that and relevant and laws complying focus us for regulations. make do has been on all live

with go that say, look customers? take have then off created you what of at that bad as the were let's correct, properly or think is resolving that along might experiences were okay, even misfires explanation. actually way, I a things the done customer them that for better but really a don't to that path Flags give kind

us, of for else. a improve the all like if would And of that there's I'm continue -- you're we customer, all really what elements that We I much try regulations and And and to elements we just laws sure be with what so think at frustrating, going experience. it's you making make best to look jurisdiction about try we obviously, there. somewhere feel it compliant go that would to can, the say, stay we the customer it follow in operate. we every compliant product

But there's And and I just launched there's lot how of front. fruit I the states quickly, nature given because the regulated still now gaming available think now a low-hanging there lot sort be will many a of continually think industry. that of particularly of on just

the it's are been in keep have boundaries for do might what what ask, ramping or you periodically, I able lot momentum thoughts to going? discussion, there's M&A. you think might and and up of a to want to follow-up, What I be obviously need of share terms my as the And Understood.

lot on quarter. know to We're this this most At kind about time but to of really year about seasonally chatter I about excited It's there's of great we're for that, we're important a I a the we be about point, quarter. had us. of mean M&A. --

coming fall football up of things happening call fall. NFL We calendar, have Lots with and the this it NBA.

we time is biggest market the revenue, when to acquire most of more most to important year. opportunity gain most generate EBITDA. the we when we'll have this This is the share, the So customers, most the we the generate where

and this important so I team DraftKings moment really on for in as now. that executing a laser we focused everybody's is dialed think

they're we're background, and of company, a else, But focused exciting of aware small lot what's that. And make we happening going and executing U.S. everything have for in very, basketball football and have that sure very and the winning pretty excited We stuff there's NFL as on and on. in and of always coming teams about and a college we're things the listen, hockey talk

Instructions] [Operator of Robin Farley Our from question next come will UBS.

a bit how iGaming percent little before of I about of changed side wonder talk from you side till Golden migrate the now? could OSB and that the Nugget that's from if the kind to players

Robin, thank you.

smaller XX% Nugget it's in our because cross both piece changed been the is such around So pretty consistent have less states than of to products really with that That pie. over. Golden actually hasn't revenue. tend Nugget of Golden a It's X%

do doesn't So a see really move more is the needle. brand. Golden Nugget dominant certainly We that overall casino

it overall businesses So a the the really crossover is little on percent bit less needle in move The overall stay consistent But doesn't XX-ish range. business. there. pretty the the

you the migrating Okay. to And the like? or not months couple you that change to expect about stack in it of necessarily, tech when next do talk sounds DraftKings'

potentially a revenue. bigger, long I impact don't we least we because not small change short term that, don't think could hope I grows so, at we a immediate an in But it think bigger when that's of it's piece the the such migrate. and becomes expect and brand certainly, But and that term.

anything, to within if the the on build focus the think, casino multi-brand and CRM be and audience continuing I out strategy casino. cross-sell, will

think But of as today. to I think more brand as it on, how now, that casino a time is goes of is become it see of and than we'll of more can developing But sports a have and we think brand if brand. growing I it as the

will next Our question Instructions] Stauff [Operator of Joe come SIG. from

understanding I states. the speed terms just curious looking of in was especially at adoption, I guess of maybe newer

now in adults of level terms continuum then that X% think adult the whatever? question of contribution New wondering right. penetration you older the number or or about curious guess, of it just in of I the you've operate operate New you're I'm And in as think the some second penetration Jersey question in now about I think your Jersey or some was about it, in had we about questions, you it especially whether maybe states. jurisdictions the of about you your be do call that reaching we the X% the second I whether positive? [Technical And or states, maybe about was states, the how then reached newer of And You've have the And that speed penetration ask penetration quickly that of how the I'll adoption percentage you again. wondering newer percentage there. older Difficulty] All the are so? that really of continuum of number positive contribution of where states, the now? [Technical be jurisdictions was Difficulty] reached

should hopefully be this Yes, better.

being about last states the question. new the you're part apologize. of the missed asking of So I -- I penetration

no problem. Yes,

Just right, that in penetration or wondering about that or trying how to states and newer New levels those X% will reached rate in in adoption get so newer think Jersey states newer have the you you states, understand to the you've quickly so?

say. to hard I It's new. mean still very

see continuing I the months going starts there's more in to be NFL a that then available And know [indiscernible]. those NFL of lot to betting first online. we're in This after example, new we're couple acquisition think states. a for good in Massachusetts time, will

So see next and tracking but we'll one would of call. the next you certainly of on earnings acquisition, expect things more you'll are know be the customer how months, update in to able we'll couple wave another

really And CAC. of Joe, level But match states. mature ceiling We're most vintage I'd bringing really healthy a older older appropriate acquisition. add, our haven't even found in states, those we spend and -- the in our our to continue states marketing see acquisition obviously we to achieve older down

where number follow-up, to with contribution you're could. the one maybe us maybe the share or you of willing if And jurisdictions Are Interesting. percentage I positive?

at QX at the QX preceding about Investor fall Day. be call definitely and talking more on earnings We'll and our in November earnings this our that call Yes.

the have on one, want run team to I front but that a... So don't we

[Operator from Instructions] question will Wells Our Dan next Politzer of come Fargo.

maybe one, question more one specific one high First and level.

quarter, XX%, the there and then for adjusting parlay has mix you're of terms [indiscernible] in Just in give favorable this think us in XX%. your some And just out over about sport I a I goal of of you largest count? of maybe think outcomes detail called terms the competitor time, more late was X%. Can how thinking around terms

you gap this think any So it versus that year think quickly. closing maybe this you're how guidepost like you about How time? about do for feels year? next evolving over pretty And

Yes. It's on ceiling. a question great

out upside, far and appropriate that there seen still think increase. continue like so we're have we parlay get other have SGP I quarter. to mix there we'll what handle, level we this to think, expectation level in rollout to to in-house material is right us up. And And room the thus a our target yet the definitely definitely impact long-term bet actually some will think models. follow our I go feel is think trying I enough still right to like that we have I by is we figure There's to to say to powered than of and don't really be the data. new on for no count with average slip room

I at think the we we... QX like UI, really But goes, fall. this where the far hopefully increase in as experience adding that leg will are that average should improve count and as

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come will question Bank. from Santarelli Next Carlo Instructions] Deutsche of [Operator

or marketing revenue You of and promotions, believe back revenue. sorry, articulated representing March gross a about of longer-term less of with XXXX, -- goal more I sales of XX% promotions guys net XX% and previously and was in revenue it about -- XX%

to the of promotions, states kind you the quarters still do you've out taking had where those last those Given the kind And that seeing of have as the reacted do you several sense experience reducing Are -- of in any experience around time external when you think customer well vintage of thinking? you're some over as you marketing. get line your the levels? the how believe of can

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the sales in to March promotions, as and had I you guided reducing back My longer-term believe 'XX, question about time promotions some about you've you to, a with Or reducing your and appropriate revenue marketing, related on of with kind guys be all? XX% that of sales experiences expenses targets of feel now those of target do you in experience line? of kind feel shifted there's of an GGR. at those working XX% have do Based lower, marketing

material have a do to the our that next continue we'll seeing we'll talk few and we're those don't to definitely work this on fall. over the going what Investor to targets in upcoming QX. at So But from that today. But more about Day of in either obviously, prepare change think to to there's months, I more be we'll the say

of Needham [Operator Instructions] come Our McTernan Bernie will & Company. next from question

think on the and expand in there Should to can efficiencies of opportunities as more or we some works? cost -- letter initiatives just point them about just on specific the products Jason, revenue-generating the or any AI? you to comments in in

When I you do definitely less, cost efficiency. and drives think both. both for that can revenue it's more

And it use where stage the affect what so thematic. the is of really it in ways is relative I think on we it. Obviously, will that the that's and development, depending that

for I right developer with with we're we on think, now example, focused our done initiatives, development our more get team. do efficiency how

economics continue I both our that into of the as didn't guidance at opportunity combination, do Investor baked need things of out and P&L So Day. think we've things really any probably the we -- we and a many product shared working shareholders. any build we I that But could over revenue our add the that in think create of do and list to is that what is cost it's long to means the from to we're is on about better opportunity. None that of upside. customer. past or get long-term standpoint engineers you time, something the is category of don't And it's that serve we the we the work scale done think business in want for even to that This view think the of it if a as

too Is 'XX, Or out NFL road map current event? the 'XX that's it's for that a it more is of helping product some and season? of this early, coming

for machine learning and base-level on I some will We've think working long the time a -- been there AI. be impacts.

for and available advances really on in tools And we've take hitting space and in really inflection some point there the last there's lies months. of been this next to are in what think working are But out third-party it level. I think around to things I that's opportunity where the the years. the

the are be of more those kind So of like AI season. some on... still the that the fundamentally the outlook things change in machine can impact the I coming learning of and of But big really will some there work think business,

from Oppenheimer. [Operator of Instructions] Jed will line Next Kelly question come the of

amortization front getting tax now can can to, players doing I seeing more keeping you're product lower Just about better you then structurally on the Great. that of talk the on Two, seeing? spend. you Are if football? products? some from just you're I merchandising trends Is is may. of the brand your engagement enhancements, what know, you just And outside but or engaged page the speak

Yes.

So great question.

I you're the that scale we're It's side, what a It's also of -- the is constantly it's mentioning, leverage optimized. the being built think that. national brand getting on combination and analyzed out several we've things. the CAC another this of of One, this certainly, business. of area and

of We analytics have a team people.

the have learning you AI things with on creation in test We and helping means and different to platforms types more a actually of we're multiple of as starting betting multiples PPC implement machine of many now or that optimize like of market. -- can creative

AI work we're for potentially even with some So that's the but could I that a too, we've just and continue in of function is it absolutely. exploring that what continual thing been and of step another saying, doing, think improvement, to sort it's going you're be

right? really brand, that have any thing, been the given at we so I straightforward in engine. underlying that mean point is But our this in honing many many advantage creatives so that's a and I think national It's sort places analysis. also different a so not scale. We're, then we that complicated peak many with time market. there's very optimizing we a different in we season, marketing different an during partners, and team of have have spending have

like I think, be continual an many just to optimize for come. really just tailwind for a us should to engine years continually the it's opportunity So that,

And then on like... engagement player

right. All

baseball able our Those to continue expectations. retain continued that's season So NBA NFL I think the exceeded we into both the to into big have that difference was way this players season, and year as well. are

better players this of have also Robin as more was effect we halo cross-sell into That's when -- and kind continued it's cross retain of that earlier. excellent like you We about iGaming. people asking seen into more side, on has -- the active more sports players the iGaming OSP active NBA, products. then that effect cross-sell on the some on spillover platform into because on more iGaming

I what attribute think, QX. I that's would So really,

If you typically seen decline, look to QX years, QX. past at we've revenue

huge I ton weren't going just for And year-over-year where of gain I just half this mean, best a expecting point the the this. in the mean product was is Lots really earlier, the to from was work. the the so market we're year-over-year. back optimization market. metrics I where like better great grid and it we've is result of have of said year. a I year, in. product been feel the We X.X really much the hit just years last last testing that culmination of product kicking as share really And of a in

Yes.

all think the think in look, think I however, -- we you or do to work to it. sport about sport sport retention cross-sell, want that I

but product into cross-sell to you're the got NFL proud into or when bringing both on most our importantly, got and an great of how improved year-over-year player super NBA NBA strong be we're MLB, player product's You to MLB them, NBA product and just a basis.

[Operator Michael next of will Canaccord. Graham Instructions] come Our question from

into your to And of newer for depth going Kentucky of outlook the rest I of the for from related from layered your of the maybe a year. of like the perspective your layer is established Can you outlook ones? you states, wanted more growth come how of you quarter, QX? launch much Awesome maybe the ask that, do states of to that growth guys. on deconstruct vintages think some into just to versus how the the

Absolutely.

we bulk 'XX. the from through the come growth the from going of launched XXXX definitely, is that states to So

a piece still XX to our degree good of as they're and some very contribution older in starting of it's seeing to We the well. obviously significant, real from think are But we get I the which bigger pie. are states, states the growth some

can your impact big states, very then of kind when makes older of the it that question? part business. what a I'm So it And growth sorry, you the get in the on second overall was

Kentucky.

Kentucky, Kentucky.

in should we the that that a -- for EBITDA So guide launch had being September do, million now a I we're prior of expecting, it we and had we projecting a in assumes guide, in put year and Kentucky, And I revenue XX have 'XX. current date million being this, actually think slide date. not we guidance. And that now I $XX but we did Kentucky that think loss time not into our Last say, on and when improvement $XX we guided, the clear launch fiscal guide. we're massive I'll despite Kentucky in roughly from our still note

of we do So launches cost the that that see and the continue through in we that can increase states we're fund launch. loss can of years always to outlook top that not every but that and past finding, is new shows that, a to story, on efficiencies from generating I great think, only new we're where had the kind upside which state we've old state time results we had a

of Brandt from [Operator Next come will question Barclays. Montour Instructions]

Just me. from one

be baked share gaining to It no to sounds it holds that you're the So and NFL of like season, back sounds try market call comments out product work driver it, it product differentiated correctly. I like parlay pretty get in that? have share your same main kind share I people this. retention competitor something your going of if you game upcoming the and is to guess mechanics for to enhancements would confident does that or gains, sounds as where it like the it? go the is, of for How a could baked like question higher flip it enough I'm from to be chasing in the the thing higher enhancements reading are the you guess, is best of you you

being competitors, felt was your It's of right. or we both using be combination rate of were actual customers it two in QX, you're before a to to a a made combination in that what that I mean, be competitors engagement your And of whole monetization like simply could it I think It on wallet just definitely your share. better going could platform. able difference and customers was big year-over-year, increase things.

year-over-year. competitors as last But both. people think of I improvement year that well. product result And it was the a of from handle think were really a NBA with We combination share that's we playing just got

and And We've of putting anything not to I we retain, guide, we mean our of Yes. few things we line we don't be users further that guide. initiatives the feel put that in but taken of could better executing we We out then and be come out hope your our guide, consistently feel we beat that by we guide. And that we just quite above to could consider and engage hope some there the could and know deliver and half what have is full have answer the think the upside? to we through, absolutely, So hopefully, don't us go things help that year. team what like out help the -- commit to the put us sight goal there. gain you that in monetize a the to of approach question, we to. back go the we share in put in I for try

TD come Cowen. [Operator will Stephen Instructions] Our Glagola question next from of

for Thanks question. the

QX just and EBITDA guide, assumptions greater updated On are what and quarterly last year? favorable to could the outcomes for also and of upside you're cadence just sport half launch light us the in percentage assuming implied in rates the guidance walk And for versus your then second QX, you implied Kentucky hold the QX QX? versus prior your QX particularly through

Thank you. Yes.

in So similar year. we're a half hold the had back rate last what to assuming of we

efficiency overall the guide had on of difference for QX increased the existing that overall think for the the Kentucky guide, cost really just able QX, performance think year, states side. definitely the with half we're to the of a business and fact made I the were to that of QX bit increase do I in the the but the of question, little we a back

enough to -- more half EBITDA EBITDA And back expecting in than I generate we're offset that the that's the year. that Kentucky to we're think negative that, of the

launch So and for opportunity Vermont. NFL a our states. provide we going last great great have year. several Kentucky us ends a is to feel states Massachusetts full hasn't customers exactly go season. in Carolina and also second didn't with North until we're now, existing to right And think up to new we'll like pretty a invest optimistic Ohio see haven't and happening But had about like in and I there's January states NFL had that season. what any really acquiring half

HX of lot numbers year. in this So there upside should a any customer in be acquisition

just to gross just Jason, take gaming of Ohio I to risk in can. rate, the if light would business In you one state revenue. maybe increase your the move look more, governments and discuss to taxes tax double on could its long-term

governments that what rates? would And state incentives tax are sort lower maintaining of keep the

Yes.

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So I'm keep at going optimistic reasonable states a to taxes are that level.

market back the drive ultimately they're illegal industry to into I that going think if try heavily. volume to they tax the that understand too they

will [Operator come of Fishman MoffettNathanson. from Robert Instructions] question Next

on questions partnership. Two

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Yes.

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next the of question Craig-Hallum of line Ryan Sigdahl Group. [Operator will from Instructions] Our Capital come

Just for us. one

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Yes.

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of Jonas Barry come from will [Operator question Truist. Next Instructions]

the You've went NFL corresponding think little season less hold. some advice maybe year, on a and given results previously to about it how correlated as Last on.

that as anything curious if to week-to-week help success? season, there's think give sort we into can football about head us Just of you

Yes.

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Jordan Securities. [Operator Instructions] Bender come will from question of Next JMP

on So potentially comments wait where and GGR the lags on your just NGR you gave more see. margin international a could of that time, But over maybe margin go markets. side, still

XX% the maybe we mix, NGR market? given XX% to can exceed we international margin Just see parlay that in the

Yes.

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into DraftKings that And Is to any Great. market time? states there yet. from some that the we launched at in follow-up, out then Nevada. state legalized, on point just don't you A talk that have but called any not interest about is go

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question [Operator come will Stifel. Jeffrey of Instructions] Stantial from Next

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question. good Very

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line the John from Securities. come will CBRE question of Next of Instructions] [Operator DeCree

wondering business of context give that you the in but trending DFS, piece a on if much business of to back could customer to the us I insight one is acquisition. as now, little Maybe how roots smaller was a the

states, ongoing similar ago So first? a is in states? vintage via DFS getting an your you older to are X Are still that customers tool vintage years as did those of DFS out states? acquiring kind of still DFS of kind you enter you you X new maybe then initial in And cross-sell older still

those driven that DFS of had so year-over-year seen improvements That has has far, by and the year lot and big a across product. can great a something Absolutely. jump that's we've actually I you mean that's been fall made lot test a litmus NFL little for going of time to in a -- season or graphs for how August the go because advanced maybe of use the July, a test of bit a frame. as is sort happen

very exciting for DFS. year So

continually stuff planned new really customers. back adding some that have the it product. the We is on of year half And for good

from seen really when strong We states. DFS continue launch have crossover we new

to be it customers for have for betting that new that source to that as and and seems great as of engagement everything funnel continues well working a a launch. sports So don't on states big states front be

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for people And on pretty some them use. are course, very but different. I spending Definitely seeing it's like reasons. are not People there's The multiproduct of significant. a mean cannibalization, ton different money DFS. not of products also

they not big -- are provide it's an that like products, a people. engagement experiences So types different of think for to wallet different of more thing And really they I and thing. it's

we're lot great about forget And are great of a seeing of significant is products well. the reverse retention we're some also It time states. our also cannibalization, maybe of some appears even come in older it as but begin seeing for older are the deal goes a they bit, that launch that excited the of seeing betting, with, that even initial our though So in a crossover, on, sports DFS to of of little happens very we about of it we're cannibalization in but across state minimal. those fairly as all bits cannibalization, vintages, some stages. People back small seeing and wasn't

I now Thank turn the the would remarks. you. Robins to will closing like end back conference And session. this Jason for Q&A to

had excellent Thank 'XX. We of you half us first for joining on call. all an today's

very excited the look and few We forward and speaking are rest back over the next hope on to half about we're well. with stay year the and Thank you you I on the the beyond. all safe and weeks you. of fall, and laser-focused

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

You day, your may a and now weekend. pleasant enjoy disconnect. Have