DraftKings Inc.

Good day, and thank you for standing by. Welcome to DraftKings' fourth 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 will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to 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 annual report on Form 10-K 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. 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. Today, I'm excited to share our strong 2024 results, our areas of focus for 2025, and why I'm enthusiastic about the next few years. We just wrapped up our 13th year at DraftKings, and I am more confident than ever in our growth trajectory and ability to capitalize on the substantial opportunity ahead of us. My confidence begins with the year we had in 2024. For the year, revenue increased 30% year-over-year to $4.8 billion. Adjusted EBITDA approved $332 million year-over-year to $181 million, and free cash flow was positive for the first time in our history. We acquired 3.5 million new customers at record low customer acquisition costs and increased our total customer base 42% year-over-year to 10.1 million. I am also proud that our business is demonstrating strong operating leverage. While revenue grew 30% in fiscal year 2024, Our adjusted operating expenses increased only 5% year-over-year when normalizing for costs related to our acquisitions. We expect this to continue as our revenue growth remains strong while our expenses approach scale as we continue to exert discipline and leverage new technologies across the organization. Looking further ahead to the future, I'm excited about a number of vectors that could even further accelerate our growth. Our structural sportsbook hold percentage is continuing to increase, and the long-term ceiling could prove higher than we forecast. Additional online gaming legalization in the U.S. appears inevitable and more a question of when, not if. And our newer verticals, such as Digital Lottery Courier, are only in their infancy. DraftKings is at the epicenter of a megatrend. Real money online gaming is a large and growing industry with secular tailwinds behind it. We believe we are well-positioned to capture significant share, and we haven't even begun to expand outside the U.S. and Canada, which we could explore as a longer-term opportunity. In 2025, one area of focus is extending our lead in live betting. Our recent acquisitions of Simplebet, Sports IQ Analytics, and Mustard Golf provide us with proven technology and analytical tools that will accelerate our product roadmap and bring the live betting experience to another level. We will also focus on growing and further integrating our emerging verticals. For instance, Jackpocket, the number one digital lottery courier app, has proven to be an efficient acquisition channel for the DraftKings ecosystem. The app recently cracked the top five in the entertainment category of the App Store when the Mega Millions jackpot reached $1.2 billion. Jackpocket is positioned to benefit from larger prices, more space, and an expanded product offering that includes scratcher games. Lastly, we are focused on how we can intelligently deploy capital as our balance sheet grows. Now that we are generating significant positive free cash flow, we have more options available to us to maximize shareholder returns. This includes optimizing our capital structure by exploring opportunities in the debt markets while maintaining a prudent approach to leverage. We will continue to prioritize returning capital to our shareholders while considering all options available to us in targeting the highest risk-adjusted returns. In closing, I'm very excited about our trajectory in 2025 and beyond. With that, I will turn it over to our Chief Financial Officer, Alan Allen.