Despite a series of unfavorable sports outcomes that contributed to a net operating loss in the first quarter, DraftKings is lifting its full-year financial targets for 2024.

Customer-friendly results in the Super Bowl and March Madness rocked the sports betting industry in the opening quarter, a pattern that leading executives have bemoaned throughout earnings’ season.

DraftKings, nevertheless, raised its full-year revenue guidance this week to a range of $4.8 billion to $5.0 billion, a range that would equate to full-year growth in excess of 30%.

More importantly, the guidance indicates that DraftKings is on track to post its first full year of profitability since becoming a public company. Speaking to analysts Friday on a first-quarter earnings call, CEO Jason Robins is pleased with the company’s emphasis on product innovation as DraftKings continues to sharpen its focus on targeting sticky customers.

DraftKings now projects 2024 Adjusted EBITDA in the range of $460 million to $540 million, up from prior guidance between $410 million and $510 million. DraftKings defines Adjusted EBITDA as the net loss or net gain before the impact of interest income, expenses, and income tax provision, along with depreciation, and amortization.

The company also factors in a litany of non-recurring costs and benefits into its calculation.

“DraftKings’ performance in the first quarter of 2024 was outstanding, reflecting healthy revenue growth and a scaled fixed cost structure that positions us to drive rapidly improving Adjusted EBITDA,” Robins said. “Looking ahead, we remain committed to maximizing shareholder value through continued innovation, operational excellence, and disciplined capital allocation.”

Analysts largely gave DraftKings high marks for the quarter, despite a string of unfavorable sports outcomes on the period. During the Super Bowl, the San Francisco 49ers led for the majority of the game before the Chiefs clawed back to force overtime. Kansas City, the overwhelming choice across numerous markets, prevailed in the extra session to win its second consecutive NFL title.

The unfavorable trends extended into March Madness when another team repeated its title run from 2023. On the futures’ markets, UConn represented the third choice at DraftKings entering the NCAA tournament. The Huskies also received a whopping 60% of the handle to win the East Regional, contested in Boston, a site within two hours of the Storrs campus.

Nearly every top U.S. sportsbook has discussed the trends this week during first-quarter earnings’ calls.

— Pat Forde (@ByPatForde) April 19, 2024

The outcomes in late March and April resulted in a headwind of $60 million to DraftKings’ revenue outlook, DraftKings said.

In terms of Adjusted EBITDA, the results led to a negative impact of approximately $42 million to DraftKings’ fiscal-year outlook, the company added.

Robins also touted DraftKings’ product offerings, as the company expands its Progressive Parlay feature into new sports and additional states. With Progressive Parlays, the product typically contains a higher leg count than an average parlay, Robins explained. For the quarter, DraftKings recorded a hold percentage around 9.5%, he added.

Moreover, handle per customer remains healthy, Robins noted, as the company looks to drive an increased parlay mix. DraftKings’ metrics on handle and spend per customer rose on the quarter, he emphasized. For the year, DraftKings now anticipates its structural sportsbook hold rate to approach 10.5%.

DraftKings also projects a full-year Adjusted EBITDA flow-through of 53%, said CFO Alan Ellingson. The percentage is reflective of strong performance across the company’s core-value drivers, according to Ellingson.

DraftKings remains focused on exerting discipline with its cost structure, in line with meeting targets on long-term returns relative to customer-acquisition costs. The company defines EBITDA flow through as the year-over-year change in Adjusted EBITDA divided by the year-over-year change in revenue.

Generally speaking, the metric serves as a gauge of how much additional revenue generated from one period is kept as profit.

Other highlights from DraftKings’ first-quarter earnings’ report:

Not all of the assessments, however, were rosy. Despite generating more than $1.1 billion on the quarter, DraftKings lost more than $110 million in cash from its balance sheet, according to a financial analyst.

At the same time, DraftKings repurchased approximately $33 million in share buybacks during the period. MGM Resorts, a DraftKings’ rival, has also engaged in a period of share buybacks to return money to shareholders.

— Blackmrprophet74, CPA (@Blackmrphophet) May 2, 2024

On the quarter, DraftKings reported a net loss attributable to common shareholders of $143,249, compared with losses of $395,661 in the year-ago quarter. DraftKings also reported a loss of $0.30 per share, narrowly missing analysts’ expectations of -$0.28 per share.

Following the release of first-quarter financial results on Thursday afternoon, DraftKings gained 1.75% in the after-hours session to $43.78 a share. The company increased the gains in Friday’s pre-market session as it traded at $45.15, up approximately 5%.

As of Thursday, DraftKings’ shares outperformed the gaming sector by approximately 22% year-to-date, JMP Securities analyst Jordan Bender wrote in a research note.

Last May when DraftKings released first-quarter earnings, the company traded near $25 a share. DraftKings tested the single-digits in December 2022 as global inflation battered growth stocks in multiple industries. DraftKings still remains far below levels from 2021 when it traded at an all-time high, around $74 a share.