DAVY VIEW

DraftKings reported Q2 revenue of $1.104bn, up 26% year-on-year (yoy), driven by above-expected levels of customer acquisition, retention and engagement. New FY24 guidance was issued, with FY24 revenue increased to $5.15bn while aEBITDA was downgraded by $120m to $380m (both at the midpoint). However, the group reiterated its aEBITDA expectations of $900m-1.0bn in 2025 with potential upside from passing on tax to customers. The company also announced authorisation of a $1.0bn share repurchase. These results represent something of a mixed bag from DraftKings – the full year downgrade will not be well received, albeit some of this relates to better customer acquisition. On the positive side, the buyback programme and reiteration of the 2025 guidance provide an offset.