DraftKings Inc.

Good day, and thank you for standing by. Welcome to DraftKings' first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1-1 on your telephone. You will then hear an automated message device, and your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised, today's conference is being recorded. I would now like to end the conference over to Speaker Day. Stanton Dodge, Chief Legal Officer, please go ahead.

Good morning, everyone, and thank you for joining us today. Certain statements we make during this call may constitute forward-looking statements that are subject to risks, uncertainties, and other factors as discussed further in our SEC filings that could cause our actual results to differ materially from our historical results or from our forecasts. We assume no responsibility to update forward-looking statements other than as required by law. During this call, management will also discuss certain non-GAAP financial measures that we believe may be useful in evaluating DraftKings operating performance. These measures should not be considered in isolation or as a substitute for DraftKings financial results prepared in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release and presentation, which can be found on our website and in our quarterly report on Form 10-Q filed with the SEC. Hosting the call today, we have Jason Robbins, co-founder and chief executive officer of DraftKings, who will share some opening remarks and an update on our business, and Alan Ellingson, chief financial officer of DraftKings, who will provide a review of our financials. We will then open the line to questions. I will now turn the call over to Jason Robbins.

Good morning, and thank you all for joining. DraftKings is off to an outstanding start in 2024, and we're excited to be raising our outlook for the year. There are five important takeaways as we reflect on our first quarter results and the rest of the year. First, our revenue growth is strong as we continue to efficiently acquire new customers, deepen our engagement with existing customers, improve our structural sportsbook hold percentage, and optimize promotional deployment. Revenue grew 53% year-over-year in the first quarter, and our increased revenue guidance midpoint implies 34% year-over-year growth for fiscal year 2024. Secondly, we delivered successful sportsbook launches in Vermont and North Carolina. We acquired customers efficiently and at population penetration rates consistent with prior launches. We expect both states to contribute positively to adjusted events for the second half of 2024. Third, we continue to focus on driving product innovation and customer centricity. Our platform and overall customer experience are rapidly improving, and as a result, we are achieving excellent customer retention and participation across sports and gaming. Fourth, we continue to focus on driving operational efficiency across the organization. We expect adjusted EBITDA flow-through percentage of 53% for fiscal year 2024 due to our largely at-scale fixed cost structure and our continued optimization of marketing and promotion. Fifth, we are continuing to explore capital allocation options given the strong trajectory of our free cash flow. Beyond our financial highlights, there are two important topics I'd also like to briefly discuss. The first is responsible gaming. There have been several recent headlines on responsible gaming, a topic that has always been very important to DraftKings. Building products that our customers can enjoy responsibly is rooted in our DNA, and we believe that we are at the forefront in responsible gaming initiatives, including technology, processes, industry affiliations, and internal leadership. We will continue to drive these initiatives in conjunction with our regulatory partners and industry participants to responsibly grow this industry to its full potential. Second, we continue to innovate on our products while focusing differentially on proprietary technology solutions. In Sportsbook, we made substantial progress on our efforts to shift our highest impact content into our in-house technology and modeling platforms, while also expanding unique offerings like our Progressive Parlay products across all states and all major sports. We are also launching Cash Out for Same Game Parlay, which is a critical addition to our offering. In iGaming, with the completion of the migration of the GNOG platform onto our in-house technology stack, we achieved important milestones touching both content and technology expansion. We launched Must Hit by Jackpot, another popular variant powered by our proprietary Jackpot platform. And we also continued to expand our homegrown casino games portfolio with the launch of eight new unique to DraftKings titles in the first quarter of 2024, including Rocket 2, the sequel to our popular original Rocket game. In closing, 2024 is shaping up to be another fantastic year for DraftKings. With that, I will turn it over to Alan Ellingson.