for users                                    184,117     (128,363) 
   Cash paid for income taxes                      5,268        8,341 
 
 

Non-GAAP Financial Measures

This press release includes Adjusted EBITDA and Adjusted Earnings (Loss) Per Share, which are non-GAAP financial measures that DraftKings uses to supplement its results presented in accordance with U.S. generally accepted accounting principles ("GAAP"). The Company believes Adjusted EBITDA and Adjusted Earnings (Loss) Per Share are useful in evaluating its operating performance, similar to measures reported by its publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share are not intended to be substitutes for any GAAP financial measures, and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

DraftKings defines and calculates Adjusted EBITDA as net income (loss) before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; and other non-recurring and non-operating costs or income, as described in the reconciliation below.

DraftKings defines and calculates Adjusted Earnings (Loss) Per Share as basic earnings (loss) per share attributable to common stockholders before the impact of amortization of acquired intangible assets; stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; and other non-recurring and non-operating costs or income, as described in the reconciliation below.

DraftKings includes these non-GAAP financial measures because they are used by management to evaluate the Company's core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share exclude certain expenses that are required in accordance with GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of amortization of acquired intangible assets, depreciation and amortization, remeasurement of warrant liabilities and stock-based compensation), or non-operating items which are not related to the Company's underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs).

The unaudited table below presents the Company's Adjusted EBITDA reconciled to its net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, for the periods indicated:

 
                          Three Months Ended 
                             December 31,       Year Ended December 31, 
                         ---------------------  ------------------------ 
(amounts in thousands)      2024       2023        2024        2023 
                                      -------                -------- 
Net loss                 $(134,851)  $(44,621)  $(507,285)  $(802,142) 
Adjusted for: 
   Depreciation and 
    amortization(1)         66,099     55,198     270,854     201,920 
   Interest (income) 
    expense, net            (8,019)   (18,104)    (44,299)    (55,739) 
   Income tax (benefit) 
    provision(2)           (11,133)     6,860     (86,341)     10,170 
   Stock-based 
    compensation(3)        110,060    113,517     381,367     398,463 
   Transaction-related 
    costs(4)                 2,053      1,954      26,386       3,060 
   Litigation, 
    settlement, and 
    related costs(5)        40,674     23,910      81,246      34,500 
   Advocacy and other 
    related legal 
    expenses(6)              9,746         --      16,049          -- 
   (Gain) loss on 
    remeasurement of 
    warrant 
    liabilities             (3,337)    12,716       4,945      57,543 
   Other non-recurring 
    and non-operating 
    costs (income)(7)       18,162       (412)     38,385       1,190 
                          --------    -------    --------    -------- 
Adjusted EBITDA          $  89,454   $151,018   $ 181,307   $(151,035) 
                          ========    =======    ========    ======== 
 

_________________________

 
(1)    The amounts include the amortization of acquired intangible 
        assets of $38.6 million and $29.3 million for the 
        three months ended December 31, 2024 and 2023, respectively, 
        and $159.8 million and $117.3 million for the years 
        ended 2024 and 2023, respectively. 
(2)    The Company recorded a discrete income tax benefit 
        of $11.3 million for the three months ended December 
        31, 2024, and $87.3 million for the year ended December 
        31, 2024. The benefit was attributable to non-recurring 
        partial releases of the Company's U.S. valuation allowance 
        as a result of the purchase accounting for the acquisition 
        of Jackpocket and Simplebet, Inc. ("Simplebet"). 
(3)    Reflects stock-based compensation expenses resulting 
        from the issuance of awards under incentive plans. 
(4)    Includes capital markets advisory, consulting, accounting 
        and legal expenses related to the evaluation, negotiation, 
        and consummation of transactions and offerings that 
        are under consideration, pending, or completed, as 
        well as integration costs related to acquisitions. 
(5)    Primarily includes external legal costs related to 
        litigation and litigation settlement costs deemed 
        unrelated to our core business operations. 
(6)    Reflects non-recurring and non-ordinary course costs 
        relating to advocacy efforts and other legal expenses 
        in jurisdictions where we do not operate certain product 
        offerings and are actively seeking licensure, or similar 
        approval, for those product offerings. This adjustment 
        excludes (i) costs relating to advocacy efforts and 
        other legal expenses in jurisdictions where we do 
        not operate that are incurred in the ordinary course 
        of business and (ii) costs relating to advocacy efforts 
        and other legal expenses incurred in jurisdictions 
        where related legislation has been passed and we currently 
        operate. 
(7)    Includes the change in fair value of certain financial 
        assets, as well as our equity method share of investee's 
        losses and other costs relating to non-recurring and 
        non-operating items. For 2024, this amount includes 
        a $12.9 million loss related to the changes in fair 
        value of certain financial instruments as well as 
        $27.8 million in expense related to the discontinuance 
        of our Reignmakers product offering, $7.5 million 
        in expenses related to the termination of a market 
        access agreement, and a $5.8 million loss on the sale 
        of Vegas Sports Information Network, LLC ("VSIN"), 
        offset by $20.9 million received related to gaming 
        tax refunds as a result of audits and appeals related 
        to prior periods. 
 
 

The unaudited table below presents the Company's Adjusted Earnings (Loss) Per Share reconciled to its basic earnings (loss) per share attributable to common stockholders, which is the most directly comparable financial measure calculated in accordance with GAAP, for the periods indicated:

 
                         Three Months Ended       Year Ended 
                            December 31,         December 31, 
                         -------------------  ------------------ 
                          2024     2023        2024     2023 
                                   -----                ----- 
Basic loss per share 
 attributable to common 
 stockholders            $(0.28)  $(0.10)     $(1.05)  $(1.73) 
Adjusted for: 
   Amortization of 
    acquired intangible 
    assets(1)              0.08     0.06        0.33     0.25 
   Discrete tax benefit 
    attributed to 
    acquisitions(2)       (0.02)      --       (0.18)      -- 
   Stock-based 
    compensation(3)        0.23     0.24        0.79     0.86 
   Transaction-related 
    costs(4)                 --       --        0.05     0.01 
   Litigation, 
    settlement, and 
    related costs(5)       0.08     0.05        0.17     0.07 
   Advocacy and other 
    related legal 
    expenses(6)            0.02       --        0.03       -- 
   (Gain) loss on 
    remeasurement of 
    warrant 
    liabilities           (0.01)    0.03        0.01     0.12 
   Other non-recurring 
    and non-operating 
    costs (income)(7)      0.04       --        0.08       -- 
                          -----    -----       -----    ----- 
Adjusted Earnings 
 (Loss) Per Share*       $ 0.14   $ 0.29      $ 0.24   $(0.41) 
                          =====    =====       =====    ===== 
 

(MORE TO FOLLOW) Dow Jones Newswires

February 13, 2025 16:15 ET (21:15 GMT)