DraftKings (DKNG) 8 Nov 242024 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to DraftKings' Third Quarter 2024 Earnings Call. [Operator Instructions] Please be advised today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Alan Ellingson, DraftKings' Chief Financial Officer. Please go ahead.

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

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

we Co-Founder the business. Hosting share and on update call DraftKings, and an some opening Jason will of Officer today, who the Executive remarks Chief have Robins,

Following a our review Jason's I remarks, will financials. provide of

to will open We then questions. line the

now to over I the Jason Robins. turn will call

for thank and Good morning, joining. you all

our results, hold percentage iGaming continued In more value online nearly Structural Sportsbook As customers declined XX%. see in Sportsbook year-over-year, quarter, to we you can our drivers strong. and third are core the acquired while CAC increase.

tracking XXX is up Our points than NFL mix more trajectory here encouraging parlay with year-over-year. basis

value of to basis new improvement customer adjusted gaming for promotional and higher more even These gross acquired points quarter year-over-year as XXXX. core though customers third Our year-over-year a percentage by improved revenue, point drivers of a gross reinvestment the rate in basis contributed XXX had margin XXX collectively promotion. we

business EBITDA we've the early our revenue overall trajectory adjusted ever While of of we the sport which quarter, our the stretch in and is the seen pressures short in fourth most outcomes NFL strong. customer-friendly experienced term,

year fiscal year for range year-over-year XXXX to which and our $XXX million to billion, excited are revenue $X growth of guidance fiscal guidance calls adjusted reiterate midpoint. We XXXX EBITDA guidance, inaugural our our at XX% introduce

Sportsbook we beyond. more and positions this offering new than customers which Even markets, exclusive for fall, engage in-house and This story NBA our MBA designed markets. NBA product to parlay key our improve, more launched same-game season us with and to lines is continuing importantly, game XX new to expanded well specifically

also features experience, third-party ranking in We Sportsbook being categories. the and app report U.S., appreciate #X betting recent the interface user a the in recognized overall in is first

X Our in rank iGaming and apps the Casino #X Sportsbook Casino numbers now brands, Nugget Golden respectively. with and DraftKings X and in

a a touch Missouri. approximately of a to of passed U.S. licensure, gaming expect the backed and the following contractual teams that the Earlier state in betting ballot ballot was wide Sportsbook approvals week, our and consortium regulatory sports population, market approvals. access, X% and pending operators. product in to Missouri Missouri we productive sports the like represents launch on and I'd state, initiative campaign this efficient voters by initiative online legalizing Lastly, in

closing, In our to into it our Financial are and are and Alan our XXXX Chief about we Officer, With turn over I fundamentals healthy, Ellingson. excited business will that, financial beyond. trajectory

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

year-over-year billion $XX We mentioned, our in to As revenue third the EBITDA a XX% generated healthy grew million Jason adjusted and were $X.XXX loss. fundamentals business quarter.

grew XXXX. when the XX% increased third Our gross online iGaming Sportsbook of to gross quarter gaming and XX% revenue revenue compared gaming

customers these improved year-over-year. customers for Newly-acquired tax nearly our increased XX% online year-over-year, Sportsbook iGaming XX% and while

rates reinvestment continued segments and customers hold offerings. customer increase. the reduced by Commercial Sportsbook Sportsbook lower-value iGaming Illinois XXX for increased basis of tax began and year-over-year as mitigate we year-over-year online Structural promotions points percentages enjoy as for to to our parlay improved impact our the

gross and XXX XX% expectations basis increased Adjusted points year-over-year. was at our margin above

briefly before million fiscal discussing guidance and on EBITDA I'll of comment we expectations On $X.XX fiscal million. our to year X, fiscal XXXX. $XXX of ahead, year year guided Looking billion XXXX for $X.XX XXXX August revenues XXXX, adjusted our $XXX billion to

quarter Our expectations. consistent third performance with our financial was

adjusted fourth million early $XXX $XXX quarter, million, in and in respectively. to headwinds however, and the have outcomes NFL resulted EBITDA the revenue of

We we the for with balance are improving promotions throughout the our progress have year profitability. as lifetime growth drive continuing are remainder our organization also accordingly. and identifying we in customers significant XXXX to and expense footprint of fiscal the made for expectation lower values And across efficiency

result, year $X.XX expect we $XXX of million. to billion, billion EBITDA and fiscal $X.XX year a XXXX As fiscal million $XXX now revenues of to adjusted

adjusted to would EBITDA XXXX our million November $XXX of the year fiscal August. Moving billion. reiterated that fiscal expectation We we to in on be this guidance. in stated In XXXX, $X XXXX expectation range year our

underlying billion. year strong adjusted expect continue of we our XXXX Given EBITDA drivers, $XXX momentum value to million fiscal core in to $X

compared introducing we XXXX year $X.X XXXX range to guidance revenue our billion are midpoint. fiscal guidance of to which growth XX% billion, to year of Today to revenue updated year-over-year equates $X.X a XX% fiscal

in XX% further fiscal upside We Sportsbook beyond. XXXX in percentage year expect fiscal and of XXXX structural with year hold

year of adjusted fiscal range gross to We XX% our margin to be expect the XX%. XXXX in

year represent compensation revenue in XXXX. X% expect We to expense of approximately stock-based fiscal

in XXXX. free $XXX the $XXX expect fiscal and between of cash free be expect EBITDA we and, flow Additionally, million to therefore, adjusted approximately generate flow year to bridge million cash

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

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

from the think next investors off, of our I Jason, kind been morning for have could if this questions most year. we assumptions start around really of flow-through

somewhat cons. year, had of you're that's year, at some ago, think objectives So quarter XX% about you basis, it think for where long-term long-term kind and But to. XX%. next of left on pinpointed we looking a pros flow-through obviously, This and I had some I spoken a kind a of

So interacts and seeing it with sort can puts as and customer just the you're this acquisition some revenue those of talk well variables point? at side of takes what you how about the behind as on

Thanks, XX% term right Shaun. about Yes, long is number flow-through. the for so definitely feel

I than we XX% for that's XX%, seeing, is think around noted And next year, to in of guide materializes. actually thing as rather quarters, higher be the customer than the industry. we unexpectedly acquisition the flow-through seeing we that TAM next having what promotions long-term great of end cautious But up been a potential don't we've therefore, what have, obviously, that customer you're year couple and, acquisition. want the in a really last strong underestimating

really the that's behind So thinking that.

upside. noted slow, past, some whenever that I we've happens, should the As in be adjusted customer EBITDA there'll short-term acquisitions think

well should that definitely than and So for mentioned. I that say, be there 'XX. Obviously, the less beyond. case rate you be we that should because to could in slowdown some be see 'XX want continued But flow-through acquisition customer very expected the bodes upside well that to a acquisition or could customer in

Our next Jefferies. from question comes David Katz with

through don't evolves rolling have of do that is I the is of one in rest I'm how how just having impact up of quarter-to-quarter factor direction. comfortable at the recur the you the we've and get disposal discussions business see mitigate some here. guess that been kinds of So year, the here talk we we to the and flip that month-to-month could asking and/or that the if back your the luck about what some positive you showed more levers of

things. the affect and It's the a sport outcomes period, great can more question. Obviously, volatility the shorter the

it's being only of swing volatility. And a way. the a guide, about So QX, month timing month think I -- it just either into going as noted, going period have is obviously the to you're you to seeing when could more

been X-point partway, go Bengals very in night, that last a conversion last the for that parlay would doesn't for leg different make outcomes. then touchdown to and Just fourth hit touchdown have

either So way. things swing can

outcomes big tracking now, improve. I of longer of over time, that's to -- expect maybe XX% structural of it sport a we that's hold, we'll It periods are normalizes. number. be little was actual, least around at finish the a around this This just we'll a But what bit think year over year, and year, over XX.X% year. down will pretty a we're course typically, certainly

So year, a over smooth. think it's pretty I

at outcomes our a to go margins, continues see, the as sport evolves, much think, XX-plus I you'll long-term that a -- EBITDA business percentage. impact approach and percent me, is now, revenue EBITDA small as you're going much see we because excuse they what lower to at adjusted right up our the affect a And our flow-through revenue, of the of affect percentage

this about Think way. it

revenue just Next range, to top to the but over at pace. year, XX% end expect grow going is at adjusted our double of guidance our EBITDA we

excuse could XX% But -- revenue on is on outcome Xx the about me, bigger. would be of XX be on same, higher. it EBITDA, going So be -- but over EBITDA, little the that's sport impact a will number obviously it to be on a

be and So positive for as turning impact. bigger impacts we history, first to rounding we're adjusted and a EBITDA, the more where become But obviously more a going company now generates in business time errors. will the these more just scale it's year in EBITDA

pass like to me. interference Understood. Looked

Our next comes from with question Robin UBS. Farley

you bit other about be a is talk feel of still the the just want a the you fully do do Great. trade-off? out to said is, that offset to changing activity with figured in QX. or about, you Can know bigger higher I progress? of words, And work in One are little wondering, question don't to kind sort you've you percentage where then like talked thing, that you've that, with you how small tax. if hold Illinois promotional In

Yes.

as especially to was didn't actually nice QX. a any see have was neutral starting. NFL -- hold We quarter, So expected it with in

And we We're But then you begun are. see exactly levels we've bridge some included figuring we implement components within as promo of things. mitigation one out in And still think in the the Illinois goes, shared, is to Illinois. what some some sort the I efficiency. if that, that of right far as

not have but of that, next year. the and say I that wouldn't we guide So huge begun component implement we it, to realized fully it's a

upside depending there potentially on So things how evolve. some

next Deutsche Our Bank. from with Carlo question Santarelli comes

you that? If across wondering, the growth -- like share the the Jason, betting, could extraction? how those any kind guidance promotional kind and you can't that growth next can To extent give market iGaming market maybe between within or direction so of you I was you across sports the year. bucket XX% X of of for verticals context parse and both would revenue on

Sure.

So we do bottoms-up build.

we've is So basing estimates we're the data we I on the customer on cohort basing market in think, doesn't that we're our in acquisition cohort at look past. what our share that, data. seen what Implicit past, typically in seen change, will because and we've

share. market So basically I to that's think flat going be implying

forecast of did actually it don't we that that it we said, market more way? check imply for share kept flat, you way. We if exercise. and top-down this say, That okay, market would It's a saying, what growth,

-- the promotional with think, environment side, I customer little been On I noted, having we've as cautious been so hot. acquisition a

customer a But lower I not course, one, number. and potential that that if in acquisition. think, the but So much front aggressive is some But year. too there benefit on XXXX of upside upside beyond, next could we could weren't be with a EBITDA be for that's

it's So of huge a it. not component

improvement. it's side, more structural market natural growth a hold kind of about little of then on bit really and growth, So just handle our

of extract Great. what said, entirety side, to that -- little you obviously number i.e., And the Or promotional something Is what then this customer XXX environment? kind just acquisition ballpark quarter. just a muted for just it was is the of the on year? the is year in of more you're next looking on the based the

cautious the the that. that to of a really just it's been little we've based a base maturing but depend question on environment, hot customer just it's I muted mean decline more customer happen to is and is. users. is Yes, on on how more it's existing the because just acquisition the It's going going fact acquisition

more and we'll more bit muted that an I out. how think a we've little had cautious assumption. a have So And plays of see been

follow-up. X just Great. And if could, I

You your you're little smarter whatnot? Is ARPMUP growth, the MUPs some ex period getting customers provided you that Or customers that and the good disclosure around of Jackpocket volatility that a in the maybe some managing relates and bringing to guys something newer obviously believe, and was the just ARPMUPs legacy I issue of mix is bit guys a in? with some up X%. of

Yes.

I as on think of latter. customers, there's a lot Obviously, new more the Jackpocket, moving it's bring we parts.

and disclosures way intend things some I additional sorting we're the at with now, that that kind we have next still the out it realize have. of we in confusing one that of So what different product letter it's level noted with we product the sort our the especially exactly year, are. we is launched to make do all But those of

we're something so more of hopefully that's that So you. at useful taking disclosures some provide for can a we all look

next question from Our comes of JPMorgan. Joe Greff

that differently. just with Carlos maybe it asked, the question start I'll somewhat ask

look spend how your or can back and can per acquired customers? existing newly spend the VIP much and of maybe lower iGaming versus talk about a you between you some have users might If users, OSB XQ more to delta parse at segments, new of relative longer-term, maybe user

Sure.

state more but the the cohorts. a recently, like it's think do still cohort, maybe obviously, the that So we recent a similar we've in caveat acquiring certainly that QX year been look I to with acquired very users early. not in the first lot customers

is the in but seem some customer the to beyond. first that, So X, it doesn't like seems X, years do seems decline then after in lower LTV, plateau. really X, year to really or be get and story X It it you

So these only customers, that's we're of a kind X month again, basing early, data. very what But we're most this for seeing. on, of or of

we acquiring. out So they're we've NBA But like similar that. how been and who what progresses like to seems quality things as that obviously, tell, we'll plays very it from see can

then bridge? there? And versus at and to revenue guidance Great. what's the delta high respect that million your $XXX low baked the EBITDA What's XXXX the range, into EBITDA contemplated end? What's what's with end

feel environment, forecasting Obviously, models have of in accurate hardest kind our the acquisition levers because We existing we fixed and good at other like to have spend us are is that's biggest The marketing predict for point. controllable. thing just very customer about this those costs been cohorts difference very and the for

new and affecting it's what promotion the up does customer does that new like how really customer So levels. look more volume end much

And Great. question final then here. X

ago Given handle given actually ago, these called versus handle other be expectations your and the would quarter a aforementioned In to relative October, engagement? have XQ months up gone customer-friendly results words, in stronger outcomes change? have might what X

not. down We that that have seen winning really evidence bit at can of it up actually go if or But on customers a are big is handle based whether a little it's all. an or impact number not

but as you similar to levels at see I betting. think continue much more much to to as what they margins, their people the tend been kind need we deposit see at betting some on keep is that And betting the this But more, incremental point. pretty of most level. don't they've just bet a for part, people

on So not payment because side could that, to any they there our some could it upside have depositing something have If people that upside. money of we if Also don't is built assumptions. the cost you be account. be their again need processing in into

it is, things upside. those think if very significant. all So could potentially I it's But create not

we So built into guide. it the haven't

Sachs. Goldman Ben with Our Miller next from comes [Operator Instructions] question

helpful. on versus factors the the that from You against wondering are not pieces color revenue around you guess may of embedded was have would those new in may assumptions or tax And assumptions of guide last mitigating XX% the some I what if any obviously prior there in this on that range some you're expectations. expand Missouri? Illinois. what moving could quarter? It I there some just that are be be Are seems versus Any like EBITDA leave a quarter? unchanged guide,

Yes. Sure.

going QX And we all of towards So into pointing even bit thought, general I little kind is exactly fundamentals of maybe the kind that, performed of we as I in expected. and QX, a better, what sport QX. the outside outcomes, QX, mean, story think are

maybe we feel by sport there optimism. to outcomes. reason stung got more some So is also Obviously,

feel a to the upside. the think between a and upside, there mix us being $XXX in now, fundamentals acquisition, felt some like didn't the some point. this So of interesting we and be, NBA confidence data I last this also story all the key like that was little cautious right But is be But that place the at NFL, over to right could maybe with be do macro off raising more some have, we reaffirmed on very customer parlay do from to billion couple we year-over-year comfortable million we quarters and start with things to see that wanting but guide the so feel was that a give strong us mix XXX to points really feel really the basis we led perspective, that $X number. up real right

the big and competition curious a for or markets, or Great. And from on I'm an standpoint, thoughts betting one, either OSB think as your a just opportunity about how opportunity, Jason. from then an cannibalizing you iGaming? maybe that nonsports prediction and that's product a whether standpoint, picture

Yes, thing. election that it's of markets, within interesting and during course, presidential that's very I particularly think a elections. The market dominant is

could So a be few really interest the I it of it place attention I last weeks. do on outside customer side. lot And seems from be know but the now a think demand there's there of where over for to demand a that's -- elections,

an licensed potentially different in looking It's as framework. is election definitely will we're to sooner. opportunity something financial be market. it's licensed next of as at So not look betting and a a at advance something It presidential there product,

it's a definitely very thing. So different

it next fits we'll So election something we'll the have on of to sure. at for is plan in looking see list. priority where But ahead it

Grambling Morgan Stephen comes Stanley. Our next with question from

the revenue just season, One I the or to is guidance embedded explicitly that? XXXX. guide? you growth you that going secondarily, customer parlays other next the in acquisition And roll X in increase then over carry to about year? guess, I into try talked for think of the going level I'm user what points driving what here. X basis guess, within on And into in to do football XXX have is the do you sports is

Yes.

question. great So

on on from customer not one, are existing as budgeting also volume but customers I acquisition cautious noted, we perspective, the first counting we think customers. acquire. are we we mostly from of a lot with fairly a that promotional It's

feel that's been about and assumptions. data, years think of I cohort up years good built we those from So really and very

And structural XX% as we year. expect then, be noted, next around we course, hold of to

was another that's have. I think So sorry, assumption what I'm question? key we then that And second your --

-- about basis think you sports, as into specific Does the Just the parlays? carry changes? over other that or increase XXX in of points what's drivers product

Yes. it I of a a It's a features. great so lot -- introduced of mean lot product. is We've new

have SGP live We and markets NFL, now. other across NBA sports

lot of it just a product availability. is product and So

really prepacked think I I and a parlays, into that's our around we've think and creating player player factor. of props increased been props merchandising abilities combinations interesting and

number a things. it's So of

It's of driven a approach. that that marketing it. different pieces Our lot towards moving have objective

sports, in general us, other have as that early it's right, for As as it's SGP some but mix sport, other NBA sport. And encouraging such that's it's definitely big has that heavy in seeing. naturally also that and the oriented does other because in far the a we're player a carryover one, sport signs the big just

and then excited pushed So And We that's really a about of parlay mix that this baseball, being touchdowns very one. year. baseball on big driver a also too. we're

is a in homeruns think for good baseball. analogy I that

So too. different think, lot but obviously, of each is definitely insights, a sport translatable I

how each season So starts to as it see we'll goes. have

Ben from Mizuho. comes with Chaiken question next Our

did year. the opportunity But coming the the Jason, opportunity question is, of year customers 'XX, something you acquire more think the angle. I for How estimating at are you guess to the in that in I conservative hard a how seems taking -- But of I opportunity 'XX just quantify beginning you're And similar you for you that see you plus said maybe makes so, had sense. that you elevated didn't the totally to marketing magnitude again, 'XX a out? predict? know external a

a a we of the -- we really count year huge mean perspective, to terms would it's on I be I try acquisition. because then approach in to, not Yes. customer counting for revenue, cost from think hard it But predict, cautiously. we -- on

of that's hard think, equation, the you anything, and kind be approach to on cautious we So tried both sides to of how predict. when it's I

really The other have the year, big makes big about only half a addition for Jackpocket, a little also were of this jackpots. thing that I'd difference. a half And which no year, note over year, we is there a

I jackpots. $X not Last were that's So there year think normal. billion-plus

we acquisition also to we sure want make that. we lottery some if budget get in the that, big for year, next customer So jackpots some have

remember, marketing year from alone, and just is more And more going that year, full a more half year-ish, also little new to customers. a a a than half even

part So the that's story of well. as

hold held end? Got back-of-the-envelope handle by you. saying some points the to divided And on it fair then right? the say October? by an XXX about I'm light our basis sound that is XXX just you Does math, in estimated basically October of

about are You work. math Good right.

next comes Our from question BTIG. Clark with Lampen

to wanted rates. structural up hold I on follow Jason,

You of that called mix Hopefully, only it XX.X. you and when momentum points conversations out the product XX product, with all seeing that basis positive? feels so quite like are for next had without year, you're think guys XX why myopic, a the packaging shifts around stuff of pacing lot too far that, I we've increase sounding towards expected

Yes.

And we the view really commit we our to it's commitment right to have how to I what want of sight now. think of that's what feel, we more line we achieve. than

higher will goals certainly be that. internal Our than

committed think right what we something even confident only as we But sure just based now. what want that yet, highly that being make we into to we guide, we not really and XXXX are to to on know about in wanted

and integration roll micro-betting, when some starting that's of guess, guess, pipeline also I at curious to in us the of factor I see, the might if if perhaps maybe into give on product update all, start I'm year? simple out? does the next sort an How to you could we that, of sort bet

great question. a It's Yes.

ours So partner been of for I Bet's mean, a a while. Simple

to in-house, really So and take a lot cost the it of a able this bringing two, to level. about was, next being one,

think on of what lot really now, have betting be to I us lot year into separate will us will the going top think live and of do really at micro-betting going differentiate we develop I we're offerings the next a side. of the a market but So and

And with. just Simple that there all betting help micros, it derivative are Bet markets will live sorts and won't be of us

very we're excited that. So about

I live hold does betting think as lower hold, have think rates. you about impact on the

live we we mix on more as into some But incremental betting, will highly lowering have it average So naturally impact overall believe it's obviously, hold. volume. the

good that's thing. So a

And do hold places at the time, the is same opportunity believe have up. that the lever we there's that other we betting to move rate live

a as even the to not hold while to actually any where we with the able today. be betting So and it's offset shift live within it in the might whole enough high pockets it's lower, of mix offset higher rates maybe positive having

those certainly up, all And it betting really live on pre-match I go parlay as things the structural mix. to think pre-match we we'll help on And performance expect, continue of and then will to us So push obviously, Bet but kind noted, Simple the think hard with. a overall be on side. hold overall, are side, will we mix I of

Our Susquehanna.. Stauff next comes with from question Joe

today so number more and of versus iterations have market forth your question. maybe you a significantly product what between, if the a say, of ask OSB, and describe levels could and you I customer. And you share look reason seems that have and is, casino had given competitive. advantage an that they certainly amount within larger finite the a certainly and like OSB the Maybe I and retention competitive casino

about say, was I of those curious does levels cohorts? both just between, what And look retention so customer like

iGaming is of the perspective, as top too you not little might actually It's market. naturally better, Yes. The our retention from different in we as think. a sports it's And bit different. as not our betting view offering but

have think apps iGaming we've quality ranked And and -- for the is product. best brands, clearly and respectively. DraftKings #X #X app head Golden our Nugget We been the shoulders the rated we and noted and product

it's I more think competitive. you're bit So do that right, a

not iGaming, than our in And And at share some more But to as upside product. share it's little so look naturally, to if the a in expect bit lower that we we you much fragmentation. sports there's that improve our continue too betting. have

comes from Our Fargo. next Wells question with Dan Politzer

focus year, lot has of back XXXX of one billion. looking But of at the actually was I your you things on know I the Investor been $X.X Day a XXXX last at the forecast revenue guide.

and maybe this to the think that those So be relationship of the as given targets of look to XXXX, but about should forward? as kind leverage you path stale and kind point, we about revenue, maybe that the think through of maybe forward seems you could we at think just flow there about on going of should kind upside that prior be how exceed outside

And that, along a you marketing, deals soon. off guys probably sales XXXX, of did lot and rolling XXXX, with in

opportunity an we So we that also I of mean, about is think as kind the as flow-through XXXX? move past

brought you last your Day. point, glad opportunity. Investor an I I'm think, is up And to the do Yes. that

Day we were a are I growth. of around share. that little we industry the X% the in in think CAGR and I overall flat conservative Investor terms believe

as continued that XXXX we're in actually be is the just customer with what growth stronger And seeing we'd where in much is growth. and acquisition to be going you So thought noted, stronger. we're we XXXX much

there there. think I So is upside some

a flow-through thought is that we TAM seeing we But is And we'd noted, that to signs years. to the ahead in than really the going And Day. you year did Investor of right encouraging already growth the as as that where now, think be. bigger have we're probably thought when the slows obviously, I catch means the we up down outer we're

question with next Montour from Barclays. Our comes Brandt

there sports. leg by or you count there's mix versus Jason, the I'd that like to terms lift improvement? bit -- parlay anniversarying little a across average differences your today? hold in mix product number in you're just about XX seeing And average of Understanding how parlay think that dig bps get XX% you number. of lift could do more on the in parlay

a last it a little And What to what with see what know possible, is then even they hole part or the that that Is something of this get you and bit your they're that like XX% take? that competitor XX%? that take question main next to the a regards doing do, I would to year? closer to would

get first And on there's I we really can albeit, think transfer your mix into. question, which likely based sports shifts To some there around mix Yes. obviously, assumptions it's they're to driven. we're just seeing, the

be not heavy. sports next are college less therefore, because expecting nearly to oriented we the example, player they in parlay and, year shift mix For tend less

on to really with XX% is seeing. But can other mean the mitigation, of things I we're do percent on your mix-driven. modeling, think, margin of mix. And I things, kind aside, based sharp your but there the yes, XX-plus risk shift we improve of mix just XX%, the like is the I that, that path nuances improve there's get always can course, that to think you

continuing we're going there's that the aren't big next clear a higher great counting that. know into actually we business to success a year, It's real been this feel on point maybe of people that a path that to rate. we exciting is on. much getting lever year. plan of drive think And upside on We focus to it's it like higher. even have great And So a hold

question Jed with comes Oppenheimer. next Our from Kelly

Great.

parlay the of a do was the Court of some about that's social last talk you the where about thought it then 'XX? I sort talk -- over trended the any -- King of sort to learnings just couple or you And good. can of promotional going ability quarters, velocity, you a the into iGaming, social promotion on type that's on Can engagement again? how Just had promotion. and of really

Yes.

something can King very So results. Court We're build been point, your things. of think, I And the success a different do future. mean, -- pleased to trying it's We've big the for been the the always us. real on promotion, in we with I for on it's

Sometimes to they what principles try works. sometimes don't, we but work, on they build of

if So don't are try ask with certain mechanics. say, ourselves see of we similar promotions other types comp run working, same promotion." "Hey, We the promotions and why we with just to

season. seen number of other confidence working, that is it this into things really and we the of running So creation had a a going high had we

So huge a far, it's been success.

was And sorry, that question then, asked? what first the you

velocity? promotional IGaming

year-over-year. pretty been it's Yes, steady

noted. has acquisition been customer we New as up,

customers less pretty you're been same year, Sportsbook, going Each see it's out, of decline. as mix, have percentage continue just and overall decline to you we year-over-year. adjusted less naturally that as an see steady a because to though, with as So the new

Our question Truist comes from next with Securities. Barry Jonas

eyeing iGaming? states you're wanted comments others. for maybe even from your to thoughts on door Seminoles get Florida OSB And for OSB, or Missouri I curious approving With specifically, what opening next given recent the maybe the

it's always sessions upcoming at their of the kind from mean is turning attention next the I Everybody year. point. now election finally legislative predict to this to hard states

year can but got big discussions. But bills starting kind same Hoping to Senate. look a X And a off some so some if House think those I where close last hurdles we path of in of we got that obviously, and lot there, the that through through you thing, left hoping there's Texas, goal line at a close, still figure Minnesota Georgia, very last path. got have out of year. got the to there. the

X that get can we that across hoping this year. So

obviously Maryland some some think or big And then are on, the are momentum. we're get I have New Carolina. and York and year I potentially then side, others think Illinois keeping on X the I could next potentially iGaming And and think could that North an eye in ones there X

and think some are ones a out, having it few, real those of at. always good all you But we're of to and that a looking you the chance up didn't some the inevitably, getting states see going maybe and about then So pan felt coming end line. going that into it's don't then be success there's and over you

early. it's So

off where momentum set those of sessions, the an of are I some to eye came the kind last session of last and where keep on. election. -- the we based ones Just think was were the on But

any And Florida? on Great. thoughts

Very encouraged Seminoles spending and a to a to hear have time job fantastic respect those Jim for comments. his has him We Allen really of and done for the and Rock and and team. know getting enjoyed Hard ton

and want far product state we'd But not up a We'll something how if excited offer what So be to very a we'll think really, the And talk anything point, along. that out. path all I Obviously, we'll plays a there. that to but be speculation lot see they big is discussions have But able customers very to to And and press, this material, obviously, to were our there stage. to see it's really us. Florida say at there's about there's if it's do that in pretty wouldn't come it. the I been progress. early how of

Our next McTernan Needham question from with comes Bernie & Company.

year? Maybe use buybacks free 'XX, of just flow to for start how with of should particularly for investors cash, $XXX the next the about million of expectation think cash

impact on Is the hold. how what outcomes total disaggregate to a certain with and player with between how props can negatively quarter? outcomes just then with track team possible game that impact follow-up on And We was all happens going hold. versus what favorites in winning, the it can that hold on

Yes.

the what and guess Alan question. your of We're that on you a at touch then first breaking can it's take probably have not hold. is latter both. time I'll But quickly mix down me this Let the

the And favorites customer. players the So it's it's big-name typically, good typically, for and win, for score of when yards customer. good when lots the touchdowns, get

in tightends when in are So low-scoring in get where house. for games runningbacks the you the typically, underdogs that's the see the zone end backup winning, and good

to So it that hard way, saw that It type you're was when going of was it. that's it a we the way other other quarter, too. if the start about see the I could because And bad. the result think to has it be to it But how mix. swing swings

in time left left of lot of and, lot a quarter obviously, a season. the So the in time

on in to that $XXX And how free thinking touch that? Alan, do million about cash you flow want we're and

responsibly. quarters cash we eyes $XXX expecting to as markets, more more But in you with about positive flow, keeping have our but expect active should really repurchases you feel the just million flow We're to future we XXXX, cash the us liquidity. on good mentioned in free into expect We be in as and that not free we're Yes. our XXXX. act scale having we

comes Michael Our Graham with Canaccord. from next question

of slides in about wanted your the deck. to ask I X just

not of spend, or said there You reactivating you of quarter X.X just things Is it I you have wanted on could your matter end X.X us a the million other is customers. have engaged and million promotional just there MUPs you're who ask strategies at total recently. -- doing? update if to are customers for the

obviously the out retaining and term, a question. getting very winning. core great Obviously, monetization to great thing and as just long But retention base over retention, the the important a is as keys gameplay really customers. gets is it's it's important bigger. as I'd It's about important of usage too. ultimate activation, your acquisition say And view we

So of an X definitely at look important topic. I it dimensions. kind along

So types treatments one to are either reactivate. tactics can CRM going we are recent to or just if the trigger them particular of see lead retargeting will get constant we we different go in to treatments that customers, lapses and that of always-on believe where type things and try attrition to

more And then the other I is factor, say, around would like really event-driven activation. seasonal

start So NFL example, as like Bowl. an think or of season Super

but only as the market reactivation so of how that those get not of thinking natural to a about going lot be much in to know really use the you're also make moments And getting additional natural do possible. you you when as sure there's activation to reactivation

X start the people point a to at the season in think they as signed maybe of season. for book of going I start of decide want who are where than lot NFL of up playing one more kind to

not obviously, season just they that their about come tend want to after favorite think season, apps. do you sure So as you it's make to with it back to and you. And

CRM. of do a to try win that's incremental our share really big moments to through use of lot the try drive those to activation what activation and is we So also

Beynon Our next Chad with from question comes Macquarie.

I XX% dialed wonder you you be beginning has if into. anything the changed to areas a for have in with need just of growth lot to terms 'XX, focus Obviously, of that markets, But look other right the is in markets more as start here or growing to international America? top there's line considering North at slow importantly, begin to if might when in time legislation some no Jason,

mean It's is an definitely at thing feel a I of this don't it point. more need. like Yes. opportunistic

But So that opportunity we about, it's like it's don't wouldn't pursue not I international strategy. we right expansion the need. think say came if an a to feel

new of even year, We growth a and XX next with still are ton still Rule EBITDA of without a -- XX% launching noted XX% company margin. easily you states around a well growth, we're and over into

think So and staying along, it. we're things, growth definitely but the to we really patient open from and perspective about would need be to opportunity good look also if thing. we don't feel I waiting comes right are right a those where the to for And

with comes from Stantial question Jeff Stifel. next Our

driving call. it user Jason, both early a down I signup I retention drill were acquired volume in wanted as comment optimization and improvement? the said XXX about structural promotional you that on you users reinvestment, per latter to hold the that bps both though you year-on-year, year-on-year. the caught in expansion of into made down note, correctly, was If offer the and up mostly acquired Is that's bonusing

informed by sign-up about current as it more user acquisition is much being maybe opportunistic how should higher mostly Or strategically, offering? the in what we then offer competitors think environment? the nominal are And certain

Sure.

side. shifted more volume, to. customer we did new the mix I'd two, of an of on mix though, increase seen yes, some retention the see growth the new actually because universe. of just have point of So things year-over-year One, definitely improvement the excuse customer And a me, customers -- couple existing the in retention even towards year-over-year side

we see base. So shift think, I more is which both, an great, a but customer towards a did also mature increase,

up in rate And so those combinations well. ended into overall as some decline netting promotion

those the are So factors. big

to promotion year. even think our it I will that each or, a where see will reach industry, of conservative the more a customers in standpoint, to for we most overall increasing continue really rapidly shift us, kind But don't actually mature don't we a from new and the more that think it level still a aggressive, to at estimates, expectation even users do going mix existing in guess, level, if be we is continue more not is towards

state an subsequent So a sway. short-term existing basis, to being we down maybe year, the promotion But California expect don't a new that rate obviously that opened if that should case. we see from state drive the up large each barring continue like up opening Texas, see could in or to a

per Great. another the of there biting? leaning to And then the Or levels part acquired, the reason in that when fish of just are per in opportunistically of just is raise question, kind that user the second terms offer? is user offer

we're user offer new promotion around gone new in But we're our of based say. up. and test different shifting changing the rate has things users No, I overall and always out play. of . overall mean on not what kind and experimenting results for offers always

JMP. with Bender Our comes from Jordan question Citizens next

The margin to guidance original XX% gross for XX%. 'XX was

on be gross game So outcomes and which onetime a are bridge, to hand, one offset, you've is as we noted be margin. should positive Jackpocket actually think should some negative, there through Illinois the

anything gross I'm margins are struggling in that in essentially together. just blending 'XX place why to Is So of missing there get the else same we're those kind factors here?

margin we improvement the it's margin. quite we That's mean remember, to year-over-year been driving really growth. that's where basis new of overall gross QX, in a level see the wanted. seen the a thing I hadn't promotion user we gross been point XXX level point improvement did But

So it right the trending is in direction. definitely

Craig-Hallum from Group. with question Capital comes next Sigdahl Ryan Our

can outcomes promotion because we strategy have forward? customer-friendly to sports you optimization promote run as retention, an actual was just didn't much of of them, that to the structural quite and in and much the How change with versus of $XX going playbook million promo

mitigation an really it's are some lower from with X the made sense tax identifying a increase. perspective. we've It's things. One, customers And really sport real promotion outcomes. in order from two, of of in that nothing lower to that make do recently No, LTV to Illinois needed LTV level some progress

optimizations So some we made there.

resulted say that adjusted did to drive EBITDA. actually to but revenue, change it no happy that very basically And significant in

on more should eye something really adjust an that what keep think we'll be But and and we permanent. test that's to accordingly. happens So continue it obviously,

call turn remarks. closing any for Robins the questions showing Jason to at back like I'm time. no further this I'd to

Great. on about looking beyond. your for Thank again you look speaking soon. finish really and for we XXXX call. to optimistic strong Thank XXXX you really us support, forward a are and all We're you forward to and excited and joining today's continued in with

today's does this presentation. gentlemen, and conclude Ladies

may You now day. disconnect, and wonderful a have