DraftKings (NASDAQ:DKNG) kicks off 2025 with Q1 revenue of $1.409 billionup 20% year-over-yearthough missing consensus by $20 million and generating adjusted EBITDA of $103 million.

The company saw sportsbook handle climb 15% to $13.9 billion, driven by NCAA tournament activity and higher structural hold (10.4%, +50 bps). Despite customer-friendly sports outcomes that shaved an estimated $170 million from revenue and $111 million from EBITDA, management highlighted efficient promotional deployment and product enhancements that boosted net hold and improved adjusted gross margin to 45% (+100 bps).

Warning! GuruFocus has detected 4 Warning Signs with DKNG.

CEO Jason Robins pointed to a resilient balance sheet with $1.1 billion in cash and a 3.7 million-share buyback, affirming DraftKings' 2025 revenue guidance of $6.2 billion$6.4 billion (?32% growth) and adjusted EBITDA of $800 million$900 million.

CFO Alan Ellingson said adjusted gross margin should expand another 300 bps to 46% for the full year, while Q2 revenue is projected to grow ~25% with EBITDA above $200 million. Regulatory headwindsincluding a $30 million tax drag in Marylandare offset by efficiency gains and an evolving sports calendar.

Why It Matters: The mix of solid top-line growth, margin expansion and disciplined cost controls underpins DraftKings' ability to navigate outcome volatility and regulatory shifts.

This article first appeared on GuruFocus.

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