Slide 1: Q2 2023 Earnings Presentation
Q2 2023 EARNINGS PRESENTATION August 3, 2023 | 1
Slide 2: Legal Disclaimer
Legal Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements about DraftKings Inc. (“DraftKings”,
Slide 3: Q2 and Current Business Highlights
Q2 and Current Business Highlights 1 Q2 top and bottom-line performance exceeded expectations; revenue of $875M increased 88% YoY and Adjusted EBITDA(1) of positive $73M improved by $191M YoY 2 OSB handle and GGR share(2) improved to 35% and 32% in Q2 2023 from 27% and 20% in Q2 2022, respectively;
Slide 4: Raising FY 2023 Guidance Midpoint by 10% for Revenue and $110M for Adjusted EBITDA
Raising FY 2023 Guidance Midpoint by 10% for Revenue and $110M for Adjusted EBITDA(1) Updated FY 2023 Guidance vs. Prior FY 2023 Guidance $ Millions Stronger Customer Retention & Engagement Higher OSB Hold Higher OSB Hold Anticipated May 4th (Including due to Structural due to Favorable Q2 Launch of
Slide 5: 2018-2021 States Are Growing Revenue >70% with Contribution Profit Growing Faster
2018-2021 States Are Growing Revenue >70% with Contribution Profit(1) Growing Faster 2018-2021 OSB and iGaming States(2): Q2 2023 vs. Q2 2022 Percentage; Basis Points >70% >800 bps >10% Increased YoY Revenue Adjusted Gross YoY External Contribution Profit(1) Growth Margin(3) Increase Marketing Decli
Slide 6: Investing in Unique Features and Functionality to Differentiate DraftKings in OSB
Investing in Unique Features and Functionality to Differentiate DraftKings in OSB ■ Powering Our Own Sports Betting Content o Expanded in-house same game parlay (SGP) capabilities by adding live SGPs for MLB; live SGPs are now built in-house for NFL, NBA, CFB, CBB and MLB ■ Differentiating Our Live
Slide 7: Investing in Unique Features and Functionality to Differentiate DraftKings in iGaming
Investing in Unique Features and Functionality to Differentiate DraftKings in iGaming ■ Executing Two Brand Strategy o On track to complete migration of the Golden Nugget Online Gaming brand to DraftKings’ proprietary iGaming technology stack over the next several months o On track to launch Golden
Slide 8: Capturing Additional Share in both OSB and iGaming
Capturing Additional Share in both OSB and iGaming OSB Handle Share(1) OSB GGR Share(1) iGaming GGR Share(2) 35% 32% 27% 27% 21% 20% Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Q2 2023 Source: State gaming reports and DraftKings internal data Notes: Gross revenue is calculated pursuant to each state’s d
Slide 9: Appendix
APPENDIX | 9
Slide 10: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Earnings Per Share and Contribution Profit, which are non-GAAP financial measures that DraftKings uses to supplement its results presented in accordance with GAAP. The Compa
Slide 11: Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses GAAP to Non-GAAP Operating Expense Reconciliation $ Millions 30-Jun-23 31-Mar-23 31-Dec-22 30-Sep-22 30-Jun-22 31-Mar-22 GAAP Operating Expenses Cost of Revenue $510 $522 $485 $373 $313 $313 Sales and Marketing $207 $389 $345 $
Slide 12: Reconciliation of Gross Profit to Adjusted Gross Profit and Adjusted Gross Margin
Reconciliation of Gross Profit to Adjusted Gross Profit and Adjusted Gross Margin GAAP Gross Profit to Non-GAAP Adjusted Gross Profit and Adjusted Gross Margin Reconciliations $ Millions Q2 2023 Q2 2022 Revenue $875 $466 GAAP Gross Profit $365 $153 Depreciation and Amortization $14 $10 Amortization
Slide 13: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA Net Income (Loss) to Non-GAAP Adjusted EBITDA Reconciliation $ Thousands Three months ended June 30 Six months ended June 30 2023 2022 2023 2022 Revenue 874,927 466,185 1,644,579 883,390 Cost of revenue 510,323 312,767 1,032,063 626,146 Sales an
Slide 14: DraftKings KPI Comparison
DraftKings KPI Comparison Key Performance Indicators Millions; Dollars ◼ Monthly Unique Payers (“MUPs”) Three months ended June 30, — We define MUPs as the number of unique paid users per month who had one or more real-money, paid engagements across one or more of our Sportsbook, iGaming, DFS, or Ma
Slide 15: Non-GAAP Adjusted Earnings Per Share Reconciliation
Non-GAAP Adjusted Earnings Per Share Reconciliation Adjusted Earnings Per Share Reconciliation: Three Months Ended June 30, 2023 Dollars $0.06 $0.14 $0.05 $0.19 ($0.17) (1) (3) GAAP Reported EPS Stock Based Compensation Other Non-GAAP Adj.(2) Amort. of Acq. Intangibles Adjusted EPS Note: Weighted av
Slide 16: DraftKings Share Count Detail
DraftKings Share Count Detail Share Count as of June 30, 2023 Thousands Common Shares Outstanding (30-June-23) 463,257 Vested Stock Options @ TSM(1) 23,734 Memo: Vested Stock Options 27,883 Diluted Shares Outstanding (With Vested Stock Options @ TSM) 486,991 DEAC Private Placement Warrants(2) 998 GN