draftkings-usatsi.png
Imagn Images

DraftKings reported $1.41 billion in revenue in the first quarter of 2025, up 20% from its $1.175 billion mark in the first quarter of 2024. The $1.41 billion in revenue spearheaded $102.6 million in adjusted EBITDA for the first quarter, which is a whopping 358% increase year over year. This is the most profitable quarter ever for the company on record, and it comes despite a customer-friendly college basketball tournament season where the men's bracket saw four No. 1 seeds advance to the national semifinals. Of the last 16 teams in the men's field, 12 were top-4 seeds in their respective regions.

Super Bowl 59 and the college basketball tournament were driving forces for a 16% jump in sportsbook handle to $13.9 billion but the favorable outcomes in the bracket reduced DraftKings' retention after paying out bettors to 9.5%. Additionally, 82% of higher seeds won during the college basketball tournament, which resulted in DraftKings lowering its 2025 full-year revenue forecast by $200 million at the midpoint. There was also a $100 million reduction in adjusted EBITDA.

Despite these reductions, the growth of live betting was a positive for the company. DraftKings CEO Jason Robins said live wagers accounted for more than 50% of the platform's handle for the first quarter. It's the first time in company history live betting has topped 50% of the handle. MLB live betting was a big driver of this growth, up 36% year over year. DraftKings acquired SportsIQ and SimpleBet last year, and those additions were also responsible for this uptick in live betting.

DraftKings also saw a rise in monthly unique payers to 4.3 million, largely due to its acquisition of Jackpocket. DraftKings expects Jackpocket, which is an online lottery company, to generate $60-100 million in adjusted EBITDA by the end of the 2026 fiscal year. Jackpocket recently exited Texas and New Mexico, which is expected to result in a slight financial hit. However, the biggest adjustment to DraftKings' projections still came from customer-friendly betting outcomes, which took about $170 million off revenue and $111 million off adjusted EBITDA.

The company has raised internal projections for gross margin for the 2025 year. With Missouri set to launch mobile sports betting, DraftKings said it expects to have operations up and running in the state shortly.