### DraftKings Faces Revenue Setback Due to NFL Game Outcomes

DraftKings shares took a hit, dropping as much as 7% in after-hours trading after the company revised its fiscal 2024 estimates downward. The changes were prompted primarily by NFL game outcomes that favored bettors, according to CEO Jason Robins. This shift has resulted in a substantial $250 million revenue headwind for the popular gaming company.

For the quarter ending September 30, DraftKings reported revenue of $1.1 billion, aligning with consensus estimates. However, the company posted a per-share loss of $0.60, which fell short of the average estimate of $0.42. Consequently, the downward adjustment of fiscal 2024 revenue and EBITDA estimates came as a blow. Robins explained that the NFL results, particularly games won by favored teams, contributed to the revenue challenges.

"This quarter and the fourth quarter are heavily impacted by the NFL season, which traditionally brings in the most betting activity and associated volatility," Robins noted in a letter to shareholders. "NFL outcomes were very customer-friendly early in the fourth quarter, resulting in headwinds of $250 million and $175 million to our fiscal year 2024 revenue and adjusted EBITDA guidance, respectively."

On a brighter note, the company's average monthly users jumped to 3.6 million for the quarter, up 57% from the previous year and more than double the number from 2022. However, the average revenue per monthly user fell to $103, down 10% from the previous year’s $114, but still a slight increase from $100 in 2022. DraftKings's marketing expenses climbed slightly, reaching $340 million for the quarter—9% higher than the $313.3 million spent in the same quarter last year.

Notably, DraftKings introduced its fiscal 2025 revenue guidance for the first time, projecting next year's revenue to range between $6.2 billion and $6.6 billion, outpacing consensus estimates around $5.86 billion. Despite this optimistic outlook, the company is making strategic shifts to improve profitability. Robins highlighted that customer acquisition costs dropped nearly 20% in the quarter, and efforts are underway to optimize promotional costs and drive expense efficiency.

"We have made significant progress identifying customers with lower lifetime values, especially in high-tax states, and are improving our expectation for promotions for the remainder of fiscal year 2024 accordingly," Robins stated. These promotional optimization and expense-efficiency efforts are expected to enhance the company's fiscal year 2024 Adjusted EBITDA by $55 million.

In a recent win, DraftKings successfully supported a ballot measure to legalize sports betting in Missouri, a state previously without legal sports betting. DraftKings and FanDuel invested a combined $41 million in the campaign, and Missouri's decision to approve the measure will undoubtedly benefit the gaming giant as it navigates through its financial headwinds.

While DraftKings stock has seen a 12% rise this year, it remains down about 20% from its peak in late March. The recent revisions and strategic changes aim to stabilize the company as it continues to balance growth and profitability amid the dynamic sports betting landscape.