DraftKings has reported a loss for the first quarter of the year because of favorable bets, but it still shows a favorable outlook. The March Madness event, in particular, was able to offset the Super Bowl, yet DraftKings still had revenue of $1.41 billion, a 20% increase from the same time last year.

Sports-betting platform DraftKings posted a narrower-than-expected loss in the first quarter, driven by strong customer engagement and platform improvements. However, the company cited 'customer-friendly sport outcomes in March' - a reference to bettor-favored results during the NCAA Men's Basketball Tournament - as a key reason it refrained from raising its full-year revenue forecast. Despite this, shares rose 1.8% in after-hours trading.

DraftKings shares and revenue rise

DraftKings reported a first-quarter loss of 7 cents per share, slightly better than the 8-cent loss projected by analysts. Revenue for the quarter hit $1.41 billion, a 20% increase from the same period last year, though it narrowly missed the $1.43 billion consensus forecast by FactSet.

The company attributed its growth to an expanding user base and improved retention of betting dollars. Additionally, DraftKings credited its recent acquisition of Jackpocket, a digital lottery app, for helping to drive top-line performance. Chief Executive Officer Jason Robins emphasized that platform enhancements and solid consumer activity helped boost results despite macroeconomic challenges.

Our continued focus on product innovation and user experience is paying off, Robins said. Customer metrics such as deposits, engagement time, and betting frequency remain strong, even as broader economic conditions evolve.

DraftKings says sports outcomes played significant role

Still, Robins acknowledged that March's sports outcomes - especially during the NCAA tournament - played a role in muting the company's full-year optimism. "If not for customer-friendly sport outcomes in March, we would be raising our fiscal-year 2025 revenue and adjusted EBITDA guidance," he said.

The 2025 March Madness tournament, marked by the dominance of favored teams and a relative lack of upsets, led to a higher-than-usual number of successful bets by customers. This dynamic reduced the company's overall profitability for the period, effectively offsetting what executives described as a "favorable" Super Bowl outcome, where sportsbooks had generally benefited from the underdog Philadelphia Eagles' surprise win.

In its letter to shareholders, DraftKings explained that March's bettor-friendly environment "more than offset" gains from the Super Bowl, impacting its ability to revise its fiscal forecast upward.

DraftKings' expectations and reactions from investors

DraftKings now expects full-year revenue in the range of $6.2 billion to $6.4 billion - slightly down from its previous outlook of $6.3 billion to $6.6 billion. However, analysts at Bank of America had already signaled that the market had priced in potential headwinds from March Madness, suggesting that investor reaction was tempered by adjusted expectations.

Despite the modest pullback in guidance, DraftKings remains optimistic about its positioning. The company said it is "well-positioned" to navigate current economic conditions and highlighted the resilience of online gaming, noting that similar platforms demonstrated stability during the global financial crisis. "We are beginning to realize efficiency as broader corporate demand softens in areas such as advertising," the shareholder letter added, pointing to tightening budgets in non-core areas.

Confidence in DraftKings continues

Over the past year, DraftKings shares have fallen 19.7%, with a 5% decline so far in 2025. However, Thursday's after-hours uptick suggests investor confidence remains intact, especially as sports betting continues to mature and expand across the US.

Looking ahead, DraftKings will likely continue focusing on operational efficiency, user growth, and navigating the variance that inevitably comes with the sports-betting business - where sometimes, even winning results can feel like a loss on the balance sheet.