DraftKings Inc.

Good day and thank you for standing by. Welcome to DraftKings' third 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'll need to press star 1-1 on your telephone. You will then hear an automated message advising 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 like to end the conference over to your speaker today. Alan Ellingson, DraftKings Chief Financial 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 the business. Following Jason's remarks, I 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. As you can see in our results, our core value drivers are strong. In the third quarter, we acquired more online sportsbook and iGaming customers year over year, while CAC declined nearly 20%. Structural sportsbook hold percentage continued to increase. Our trajectory here is encouraging, with NFL Parlay Mix tracking up more than 500 basis points year over year. Our promotional reinvestment rate improved by 300 basis points year over year as a percentage of gross gaming revenue, even though we acquire more customers and add higher new customer promotions. These core value drivers collectively contributed to a 300 basis point year-over-year improvement in adjusted gross margin for the third quarter of 2024. While we experienced the most customer-friendly stretch of NFL sport outcomes we have ever seen early in the fourth quarter, which pressures our revenue in adjusted EBITDA in the short term, the overall trajectory of our business is strong. We are excited to reiterate our fiscal year 2025 adjusted EBITDA guidance range of $900 million to $1 billion. and introduced our inaugural fiscal year 2025 revenue guidance, which calls for 31% year-over-year growth at our guidance midpoints. Even more importantly, our sportsbook product is continuing to improve, which positions us well for this NBA season and beyond. This fall, we launched new and exclusive NBA markets, specifically designed to engage customers with key game storylines and expanded our in-house same-game parlay offering to more than 50 new NBA markets. We also appreciate being recognized in a recent third-party report as the number one overall Sportsbook app in the U.S., ranking first in the user experience, betting interface, and features categories. Our apps now rank number one in Sportsbook and numbers one and two in iGaming, with the DraftKings Casino and Golden Nugget Casino brands, respectively. Lastly, I'd like to touch on the ballot initiative in Missouri. Earlier this week, Missouri voters passed a ballot initiative legalizing online sports betting in the states. following a productive and efficient campaign that was backed by a wide consortium of sports teams and gaming operators. Missouri represents approximately 2% of the U.S. population, and we expect to launch our sportsbook product in the state pending market access, licensure, regulatory approvals, and contractual approvals. In closing, our business fundamentals are healthy, and we are excited about our financial trajectory into 2025 and beyond. With that, I will turn it over to our Chief Financial Officer, Alan Ellingson.