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DraftKings Inc. (DKNG) Q4 2022 Earnings Call Transcript

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DraftKings Inc. (NASDAQ:DKNG) Q4 2022 Results Conference Call February 17, 2023 8:30 AM ET

Company Participants

Stanton Dodge - Chief Legal Officer

Jason Robins - Co-Founder, Chief Executive Officer and Chairman

Jason Park - Chief Financial Officer

Conference Call Participants

Shaun Kelley - Bank of America

David Katz - Jefferies

Jason Bazinet - Citi

Carlo Santarelli - Deutsche Bank

Ed Young - Morgan Stanley

Jed Kelly - Oppenheimer

Robert Fishman - MoffettNathanson

Clark Lampen - BTIG

Ben Chaiken - Credit Suisse

Michael Graham - Canaccord Genuity

Bernie McTernan - Needham & Company

Ryan Sigdahl - Craig-Hallum

Dan Politzer - Wells Fargo

Brandt Montour - Barclays

Joe Stauff - SIG

Chad Beynon - Macquarie

Robin Farley - UBS

Joe Greff - JPMorgan

Operator

Good time and convey you for opinionated by. Welcome to nan Fourth Quarter 2022 DraftKings Earnings Conference Call. At this time, each participants are successful a listen-only mode. After nan speakers' presentation, location will beryllium a question-and-answer session. [Operator Instructions] Please beryllium advised that today's convention is being recorded.

I would now for illustration to move nan convention complete to Stanton Dodge, Chief Legal Officer. Please spell ahead.

Stanton Dodge

Good morning, everyone, and acknowledgment for joining america today. Certain statements we make during this telephone whitethorn represent forward-looking statements that are taxable to risks, uncertainties and different factors, arsenic discussed further successful SEC filings that could origin our existent results to disagree materially from our humanities results aliases from our forecast. We presume nary work to update forward-looking statements, different than arsenic required by law.

During this call, guidance will besides talk definite non-GAAP financial measures that we judge whitethorn beryllium useful successful evaluating DraftKings' operating performance. These measures should not beryllium considered successful isolation aliases arsenic a substitute for DraftKings' financial results prepared successful accordance pinch GAAP. Reconciliations of these non-GAAP measures to nan astir straight comparable GAAP measures are disposable successful our net presentation, which tin beryllium recovered connected our website and successful our filings pinch nan SEC.

Hosting nan telephone today, we person Jason Robins, Co-Founder and Chief Executive Officer of DraftKings, who will stock immoderate opening remarks and an update connected our business; and Jason Park, Chief Financial Officer of DraftKings, who will supply a reappraisal of our financials. We will past unfastened nan statement to questions.

I will now move nan telephone complete to Jason Robins.

Jason Robins

Good greeting and convey you each for joining. First off, I americium very excited astir 2023. We are much focused than ever connected disbursal management. Since our erstwhile net telephone successful November, we person made surgical decisions backed by beardown study astir our expenses and person actioned items that totaled an expected $100 cardinal of adjusted EBITDA comparative to our anterior guide.

Including nan effect of nan summation successful our 2023 gross guidance, we person improved our adjusted EBITDA guideline from a scope of antagonistic $475 cardinal to antagonistic $575 cardinal to a scope of antagonistic $350 cardinal to antagonistic $450 million, and notably expect to make much than $100 cardinal of adjusted EBITDA successful nan 4th fourth of 2022.

As you tin see, we are successful a awesome spot and are seeing an acceleration successful our publication profit and adjusted EBITDA. And we will proceed to research ways to thrust efficiencies, some successful our compensation and non-compensation disbursal categories. To beryllium clear, nan apical statement is performing very well, and we person beardown momentum heading into 2023. We grew gross 81% year-over-year successful nan 4th fourth and had an adjusted gross separator complaint of 49%. Jason Park will speak much astir what drove our beardown 4th fourth results.

Turning to our merchandise offerings. DraftKings' mobile sportsbook was nan number 1 astir downloaded sportsbook app successful nan United States since Super Bowl Sunday. For sportsbook, 1 of our cardinal merchandise highlights was nan motorboat of our ain in-house unrecorded same-game parlay product, making america nan first usability to present this capacity extremity to extremity for nan NBA. This continues our attraction connected enhancing our parlay offering, which drives accrued clasp rate.

And for iGaming, we launched DraftKings Jackpot, a unsocial type of progressive jackpot that is shared crossed much than 100 slots successful array booking. We besides received support for our first unrecorded casino crippled developed wholly in-house, which we expect to motorboat successful nan coming months successful New Jersey.

I americium proud of nan squad and civilization we person successful place. In particular, I americium proud of our squad for their relentless attraction connected ratio and disbursal guidance complete nan past 12 months. While our activity present is not done, we consciousness awesome astir our trajectory and nan expertise nan squad has shown successful driving beardown gross growth, while besides managing our expenses amended than ever before.

I besides noted that it is captious for apical guidance to not return their oculus disconnected nan shot successful this area. And I americium personally very focused connected ensuring that goals, compensation and accountability are each aligned toward this very important objective.

With that, I will move it complete to Jason Park.

Jason Park

Thank you, Jason. Yes, fto maine deed connected immoderate of nan highlights, including our Q4 performance, our caller and improved 2023 guidance and immoderate accusation connected our underlying authorities vintages. Please statement that each income connection measures, isolated from for revenue, are connected a non-GAAP adjusted EBITDA basis.

As Jason mentioned, we person awesome momentum coming retired of Q4. In Q4, we posted $855 cardinal of revenue, which represents 81% maturation versus Q4 2021. This brought our afloat twelvemonth gross maturation to 73%. Adjusted EBITDA was affirmative successful October and was affirmative for nan full 4th aft adjusting for nan astir $75 cardinal finance we made successful our caller launches successful Maryland and Ohio.

Our gross was amended than our anterior guidance, chiefly because of structural betterment successful our sportsbook clasp and fundamentally amended customer trends than we expected. Customers are engaging much pinch our products and are little reliant connected promotions. We besides managed retired astir $25 cardinal of expenses successful Q4.

2023 is disconnected to a awesome start. This will beryllium a twelvemonth of continued gross maturation and disbursal management; beardown customer trends, including customer retention, grip per player, clasp complaint and amended promotion reinvestment are enabling america to summation nan midpoint of our gross guidance from $2.9 cardinal to $2.95 billion.

And our disbursal guidance programs person already identified $100 cardinal of costs savings for 2023, astir $50 cardinal from standard trading efficiencies and different $50 cardinal from people-related costs. These 2 factors, on pinch our higher gross outlook, let america to confidently summation our adjusted EBITDA guidance scope from antagonistic $475 cardinal to antagonistic $575 cardinal to antagonistic $350 cardinal to antagonistic $450 million.

I besides wanted to walk a spot of clip connected foundational authorities economics. At immoderate fixed constituent successful time, our institution results are a reflection of a operation of mature states, newer states and marque caller states. Our states are performing very well, and we are seeing faster paths to affirmative publication profit than we expected.

For example, erstwhile we look astatine our 2018 to 2019 vintages states, which represents astir 10% of nan U.S. population, we are seeing awesome results. In 2022, those states grew nett gross by 50% versus 2021. This continued maturation is owed to respective factors.

We are seeing awesome customer retention, grip for retained subordinate is growing, promotional reinvestment is coming down and clasp percent is going up. And because overmuch of nan nett gross maturation is coming from little promotions and higher hold, our adjusted gross separator complaint successful that vintage was up much than 400 ground points successful 2022 versus 2021.

Finally, our absolute trading dollars successful those states decreased by much than 15%, these are important statistic and they are nan foundational drivers of continued publication profit description and acceleration crossed our states. This summation successful full publication profit, mixed pinch overmuch slower maturation successful fixed costs, results successful an acceleration of our adjusted EBITDA profitability and clear advancement towards achieving our semipermanent adjusted EBITDA goals.

That concludes our prepared remarks, and we will now unfastened nan statement for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first mobility comes from Shaun Kelley pinch Bank of America. Your statement is open.

Shaun Kelley

Jason aliases Jason, I was wondering if we could conscionable drill down a small spot connected immoderate of what you're seeing connected nan benignant of structural clasp improvement. That seems to beryllium a really large communicative and 1 that you called out, yes, operation shift. Can you conscionable springiness america a consciousness astir 2 things? What's nan underlying presumption for benignant of 2023 arsenic you deliberation astir what you saw results wise successful nan 4th quarter? And past secondarily, what's immoderate of nan benignant of merchandise roadworthy map? How do you deliberation you tin benignant of proceed to migrate customers into those types of products successful nan mean and agelong term?

Jason Robins

Great question. So, really, I deliberation it made a ton of advancement successful this area, which I deliberation has been enabled by having migrated towards nan opening of past NFL -- excuse me, nan erstwhile NFL play to our ain platform, and really, I deliberation NFL 2022, pinch nan culmination of a year's worthy of work, which has continued through.

We conscionable launched unrecorded SGP for MBA, which I deliberation was nan first stop. We were nan first usability to do so, and that was an wholly in-house built and traded product. So really, I deliberation we should expect to proceed to spot much and much effort towards driving a amended parlay merchandise offering, and I deliberation that will proceed to thrust much operation shift.

Also, we are making different changes. Certainly, operation displacement is nan largest driver of what we're referring to arsenic structural clasp increase. But we are besides making different adjustments to our models, rolling retired caller and improved models, improving our information situation and doing a batch of different things that are helping america amended our trading performance. So, I do deliberation there's immoderate further upside. We proceed to beryllium capable to execute against those things connected nan merchandise roadworthy map.

Jason Park

Yes. And I would add, Shaun, successful position of your mobility for guidance. As we saw nan empirical structural clasp flow-through successful Q3, precocious Q3 and Q4, we've embedded that into our 2023 gross guidance, which is simply a large portion of nan summation successful our gross guidance that we provided today.

Operator

Thank you. One infinitesimal for our adjacent question. That mobility comes from David Katz pinch Jefferies. Your statement is open.

David Katz

And congrats connected nan quarter. So pinch respect to this benignant of updated operating level aliases nan updates that you've made, if hypothetically, we were to spot -- and I cognize we've talked truthful overmuch astir sports betting, if we were to spot iGaming hypothetically spell unrecorded successful New York, tin you shed a small ray connected really that mightiness effect what nan guideline is, some connected nan nonaccomplishment and nan rate travel side?

Jason Robins

Absolutely. So, I think, obviously, there's a batch of moving parts, really large is nan market, what's nan building astir nan taxation rate, promotional deductions, those sorts of things. I deliberation successful general, what we've said successful nan past is, we presume astir 7% to 8% of nan U.S. organization -- aliases it was 7% to 9% are caller sports betting markets each year, and 3% to 4% for iGaming. So, New York, obviously, would beryllium connected nan precocious extremity of that.

But overall, those assumptions are baked into our 2024 guidance I don't deliberation moreover if New York did walk nan measure this year, I deliberation it's improbable that it will spell unrecorded this year. Remember, they passed nan measure nan twelvemonth earlier they went live. It was early nan pursuing year, but it took until nan pursuing twelvemonth to spell unrecorded for mobile sports betting.

So, immoderate states person been faster, but I deliberation astir person mostly been nan pursuing almanac year. So, I deliberation we're looking astatine 2024, and arsenic I mentioned, we've built successful immoderate presumption astir that, but this would beryllium a bigger iGaming marketplace than we had assumed.

David Katz

And conscionable to travel that up, if I may. Is it a adjacent presumption that nan antagonistic impact, some to net and for illustration New York. So we've acquired hundreds and hundreds of thousands of players successful New York already. I deliberation nan cross-sell opportunity location would beryllium enormous. We cognize that immoderate of these players are going to Connecticut, to New Jersey, to Pennsylvania to do iGaming now. So, I do deliberation location is immoderate incremental customer acquisition spend, but it's not nan aforesaid arsenic a caller marketplace wherever we haven't had hundreds of thousands of customers that we've acquired already. So it's an meticulous assessment, I think.

Operator

Thank you. One moment. We person a mobility from Jason Bazinet pinch Citi. Your statement is open.

Jason Bazinet

I conscionable person a high-level question. You guys, obviously, are making a batch of advancement improving nan operations, and each metric seems to beryllium moving successful nan correct direction. At nan highest level, erstwhile you deliberation astir really these improvements comparison to immoderate of nan semipermanent targets that you've laid retired astatine anterior Investor Days, is nan accusation that nan goals are nan same, but you'll conscionable possibly get location faster? Or do you -- if things support going arsenic well, is location scope for immoderate of those to move up?

Jason Robins

That's a awesome question. We will, later this year, beryllium providing an updated semipermanent outlook astatine an Investor Day. So enactment tuned for that. But speaking to it conceptually, I do deliberation there's immoderate upside there. We surely person immoderate upside connected nan clasp complaint front. I deliberation promotions will astir apt extremity up location successful statement pinch wherever we deliberation they'll beryllium agelong term.

And past connected nan costs side, I deliberation there's ever effort that needs to beryllium going. That's something, I think, that really has resonated pinch nan squad is, yes, obviously, we're each cognizant of nan marketplace situation we're in. But we besides understand that to build nan astir profitable semipermanent company, we request to beryllium arsenic businesslike arsenic we perchance can. And that's a connection that everyone connected activity has really taken to.

The Board conducted a thorough reappraisal of guidance incentives towards nan extremity of 2021 and starting successful '22, it's continued to '23, wholly realigned guidance incentives. So, location was an balanced attraction connected EBITDA and profitability to what we antecedently had, had connected revenue. So I deliberation that erstwhile we look astatine nan agelong term, and for illustration I said, we'll supply much circumstantial updates later this year, I do deliberation there's immoderate upside if we tin proceed to find nan efficiencies that we've been uncovering complete nan past 12 months.

Operator

Thank you. And our adjacent mobility comes from Carlo Santarelli pinch Deutsche Bank. Your statement is open.

Carlo Santarelli

Jason, whoever wants to return this one, arsenic you guys deliberation astir benignant of nan structural clasp improvements that you're making and you deliberation astir benignant of nan caller parlay product, comparative to retention and acknowledging, it's early pinch a batch of this stuff, but you evidently had immoderate maturation complete nan people of 2022 pinch your addressable TAM, pinch caller states that person travel online. I judge your monthly unsocial payers, was up precocious 20s this year. I'm not judge if that is successful statement pinch benignant of nan addressable TAM that you brought up, but it seems similar, astatine least. As you deliberation astir for illustration benignant of that retention effort, arsenic holds are rising, really could you benignant of remark astir nan equilibrium betwixt really to clasp and benignant of really to amended ratio connected a per customer basis?

Jason Robins

I deliberation that's an highly important question. And really, successful nan end, it's each astir nan customer. We commencement there. What's bully astir nan parlay merchandise is customers emotion it. It's thing that I deliberation helps pinch retention of nan merchandise offering keeps getting stronger.

So we don't position it arsenic a trade-off astatine all. We look astatine it and commencement pinch nan customer, find nan products that nan customers want and past ideally conception those products successful a measurement that is some really breathtaking and benefits nan customer and besides create charismatic economics for nan Company. And I deliberation parlay is simply a awesome illustration of that.

We've had DFS for years. And while certainly, DFS is simply a accomplishment game, while surely group do win, it's not arsenic common. But erstwhile they win, they person an opportunity successful these large tournaments to triumph very ample prices. And I deliberation nan parlay merchandise functions nan aforesaid way. If personification does a very ample parlay pinch tons of legs, they person an opportunity to move a very mini stake into a ample payday. And I deliberation that's really nan worth prop that's unsocial astir nan parlay merchandise comparative to nan singles bets.

Carlo Santarelli

Great. And past if I could, conscionable 1 follow-up. In position of adjusted income and marketing, I deliberation nan outer trading successful '22 was a small complete $800 million, you guys disclosed. The full was a small complete $1.1 billion. Should we expect, arsenic soon arsenic '23, that, that statement starts to -- that, that disbursal starts to travel down a small spot this year? Or is that comparatively level this twelvemonth and possibly you leverage a small spot of nan gross growth? And past possibly successful consequent years is wherever we commencement to spot that income and trading benignant of spot distant and spell lower?

Jason Robins

I deliberation that's right. I deliberation we'll beryllium comparatively level this year. I deliberation that we're -- obviously, immoderate of this will dangle connected nan cadence of authorities launches. But based connected benignant of a baseline expectation, I deliberation will beryllium comparatively level this year. And arsenic you noted, I deliberation arsenic much and much states mature, arsenic nan marketplace wide matures, you'll commencement to spot it tail down a small bit. But this year, I deliberation we're expecting to beryllium fundamentally level year-over-year.

Operator

Thank you. One moment. Our adjacent mobility comes from Ed Young pinch Morgan Stanley. Your statement is open.

Ed Young

And first of all, conscionable to opportunity convey you for immoderate of nan other disclosure successful nan presentation. It's really very useful and appreciated. I want to inquire astir nan connection you've reiterated really, which is astir producing your first adjusted EBITDA affirmative 4th successful nan 4th fourth of this twelvemonth and past really that group up '24. Given arsenic you mentioned that you were location this Q4, isolated from for nan caller authorities investment, tin you conscionable thief america benignant of deliberation astir that statement? Is that owed to nan cadence of nan costs savings that you mentioned? Is that owed to conservatism astir nan caller authorities launches and not having cleanable statement of show to that? Or is location thing else? Is location a logic peculiarly why that couldn't travel earlier, you conscionable possibly conscionable want to perpetrate yourself to that?

Jason Robins

Yes. I deliberation -- truthful it's a awesome question, Ed. Certainly, there's seasonality of nan business, and location are quarters wherever there's deeper trading finance for illustration Q1 and Q3. I deliberation that, for america correct now, particularly fixed Ohio, Maryland aliases brand-new Massachusetts, we expect to launch, hopefully, sometime successful March, I do deliberation that, that's really nan logic down america staying pinch nan Q4 message.

I deliberation because of those launches, we expect an moreover amended Q4. And what we're seeing is that those states truthful far, Maryland and Ohio, astatine slightest are ramping faster, moreover successful Arizona. Arizona was nan fastest-ramping authorities we had, and immoderate of our much caller states for illustration Maryland and Ohio person really moreover been faster. So, I deliberation nan bully news is that, that's going to lend much publication profit sooner. I conscionable don't cognize if Q2 is excessively soon to expect that.

But either way, I deliberation that we'll beryllium continuing to attraction connected efficiency, continuing to attraction connected trying to get profitable sooner. That's nan extremity of nan Company. And correct now, I deliberation we're comfortable to committing to $100 cardinal positive successful EBITDA successful Q4. But we're trying to get that number up, and we're trying to get each 4th to do amended than what we're reasoning correct now. And there's a number of efficiency-oriented initiatives astir nan Company that I deliberation could perchance lend immoderate upside.

Operator

Our adjacent mobility comes from Jed Kelly pinch Oppenheimer. Your statement is open.

Jed Kelly

Great. Maybe pursuing up connected Carlo's question. Can you conscionable talk astir your churn complaint this shot season, I guess, pinch nan higher holds, and you did person a amended shot outcome, too, versus past year? And what's benignant of driving nan underlying churn rate? And past conscionable mobility conscionable connected 1Q. Can you talk astir benignant of immoderate of nan dynamics astir nan first quarter? I deliberation past year, March Madness was a antagonistic aliases little than you thought. So tin you talk astir benignant of immoderate of nan comps we should beryllium reasoning astir for 1Q?

Jason Robins

Yes, I deliberation -- truthful connected nan first question, we've seen really beardown retention rates. Obviously, we've been keeping an oculus connected this arsenic clasp has increased. We person different marketplace comps that we spot astatine moreover higher clasp levels than america that has, I think, had decent retention. So we consciousness assured there's still room to summation clasp without affecting churn. And frankincense far, we've seen only affirmative trends connected nan retention complaint side.

As acold arsenic March Madness, I deliberation it's been a weird past fewer years. You had nan cancellation of March Madness successful 2020. And I deliberation assemblage hoops is really coming backmost successful a large measurement now successful position of popularity. We're seeing much take successful nan regular play than we had successful nan erstwhile mates of seasons.

So, we deliberation it's going to beryllium a awesome March Madness, and I'm really looking guardant to it. It will beryllium -- hopefully, if Massachusetts gets live, it will beryllium nan first clip that residents successful Massachusetts will beryllium capable to stake and stay. So, I deliberation that will beryllium a large opportunity, and past obviously, continuing to study much and get amended connected figuring retired ways to thrust amended stake mix.

That said, assemblage sports, I will say, is 1 of nan tougher ones connected nan stake operation broadside because a number of states don't let subordinate props and besides group are mostly conscionable little acquainted pinch nan players, truthful they're much apt to harvester parlays connected aggregate teams. So, we'll beryllium focusing there, obviously, still trying to thrust nan aforesaid crippled parlay product, too, but I deliberation assemblage sports, multi-game parlay is simply a small spot easier than same-game parlay, fixed immoderate of nan dynamics I described.

Jed Kelly

Great. And past conscionable 1 speedy follow-up. Is location thing to telephone retired from nan World Cup successful 4Q that won't beryllium successful location this year?

Jason Robins

World Cup was great, I mean, nary uncertainty astir it. That said, it was debased azygous digits percent of our revenue. And I deliberation we don't judge that there's thing really that you should set accordingly from World Cup. I deliberation that was a bully small boost, but didn't person a tremendously worldly effect connected our financials past quarter.

Jason Park

And I would conscionable add, Ed -- I would conscionable add, connected World Cup that was evidently already included successful nan Q4 guidance that we provided successful November. And erstwhile we look astatine nan information connected a customer-by-customer level, it felt much arsenic overmuch for illustration a grip displacement betwixt sports that were very prevalent successful Q4 arsenic it was benignant of existent incrementality.

Operator

Thank you. And our adjacent mobility comes from Robert Fishman pinch MoffettNathanson. Your statement is open.

Robert Fishman

You called retired really you're looking for much efficiencies astir not renewing definite squad convention and media authorities going forward. I'm conscionable wondering if you tin grow upon these different relationships and possibly really they've changed complete nan past twelvemonth aliases 2 since you first signed nan deals, now that immoderate of nan different OSB players person pulled back.

Jason Robins

Yes, I deliberation what you're describing is 1 of nan galore efforts astir nan Company aimed astatine becoming much efficient. And obviously, trading being a large disbursal category, squad and convention deals being a large disbursal category, we consciousness there's room there. We've had a number of partners that person been very constructive and person agreed to reductions that would make these deals businesslike successful a measurement that we request them to be. And there's others that we will beryllium discontinuing erstwhile nan deals travel up and person discontinued arsenic they've travel up complete nan past year. So it's really been a mix.

There's been a batch of really awesome partners, though. They recognized that nan market's changed, person said, "Look, we want agelong word to beryllium successful business pinch DraftKings. And we recognize that this is not an businesslike portion of nan portfolio correct now, and we request to rework it." And location person been others that we've had to unluckily discontinue nan deals with. So it will beryllium a operation of things, but it's really portion of an wide effort that we person to beryllium much businesslike arsenic a company. And I deliberation location is an opportunity successful this class to get moreover better.

Robert Fishman

If I could conscionable inquire 1 speedy follow-up. Any update you'd attraction to make astir nan early business pinch Disney? And whether nan narration has changed astatine each since nan early days since Bob Iger is back?

Jason Robins

No. I mean we've continued to person a awesome narration pinch Disney. ESPN, Jimmy Pitaro and his squad person been awesome partners. So, we've really enjoyed that relationship, gotten a batch retired of nan partnership. And we ever talk to our partners astir ways that we tin amended and widen and turn nan relationship. And Disney and ESPN person been a awesome partner frankincense far.

Operator

Our adjacent mobility comes from Clark Lampen pinch BTIG. Your statement is open.

Clark Lampen

I've sewage conscionable 1 for Jason Park. Jason, if we presume you guys are finishing '23 with, I guess, let's conscionable say, it's a wide range, $600 cardinal to $800 cardinal of cash, and you're going to beryllium astatine that point, a batch person to breakeven connected a rate travel basis, does it make consciousness to beryllium a small spot much fierce pinch rate usage aliases research indebtedness financing options successful a marketplace wherever truthful galore of your competitors are now leaning out, astatine slightest connected nan sports betting broadside and you're past nan constituent of having to exemplify to nan marketplace that you won't request to raise superior conscionable to stay a going concern?

Jason Park

Yes, I admit nan question, Clark. Yes, conscionable to clarify, I would not opportunity that we're for illustration $600 cardinal to $800 million. I would say, greater than $700 cardinal ending 2023. So possibly $700 cardinal positive is astir apt a amended measurement to deliberation astir it.

Yes, and look, I deliberation nan astir important point is we're successful a awesome spot wherever we tin conscionable attraction connected operating nan business, uncovering efficiencies, not having to interest astir immoderate type of financing needs.

And successful position of broader questions astir debt's domiciled astatine DraftKings, we'll proceed to measure nan full superior structure, obviously, nan macro situation connected imaginable instruments for illustration that. And we'll travel backmost to you if thing comes to fruition.

Jason Robins

Yes, I'd conscionable adhd that I deliberation that because of our rate position, were location an opportunity to beryllium fierce successful places, we don't request capital, whether equity aliases indebtedness financing. So it's something, I think, if location was immoderate strategical opportunity aliases thing for illustration that, possibly we would explore. But from an integrated standpoint, we don't request to. So I deliberation it's improbable you'll spot america return retired immoderate indebtedness and immoderate -- I mean, immoderate equity superior astatine all. And I deliberation it's virtually intolerable to ideate a script wherever we do truthful for integrated purposes.

As acold arsenic leaning successful more, we are trying to beryllium surgical, and that intends not conscionable cutting and being businesslike successful places that we cognize we request to beryllium much efficient, but besides leaning in, successful places wherever we person nan information and nan conviction. That said, you asked nan incorrect feline successful Jason Park. I don't deliberation he's met a costs he's liked successful nan past year. So sometimes we person to show Jason, you can't trim everything. But definitely, nan squad is, I think, arsenic a consequence of having a awesome analytically driven civilization and a awesome magnitude of data, very assured that location are places that, yes, we surely are cutting, but we besides request to beryllium leaning into arsenic well.

Operator

Thank you. Our adjacent mobility comes from Ben Chaiken pinch Credit Suisse. Your statement is open.

Ben Chaiken

On nan SG&A side, nan guideline for '23 suggests possibly up 10% aliases 12% year-over-year, '23 versus '22. I'm benignant of bucketing everything betwixt publication profit and EBITDA. Does that maturation complaint proceed -- and that's comparative to a 40% maturation complaint betwixt '22 and '21. Does that maturation complaint proceed to decelerate moreover arsenic you adhd caller states?

Jason Robins

The maturation complaint of fixed costs?

Ben Chaiken

Just nan full SG&A bucket, truthful everything betwixt publication profit and EBITDA that's increasing successful 10% 12% range.

Jason Robins

No. Yes, I deliberation there's really very small fixed costs effect of launching caller states. There's immoderate customer work sometimes, but we're besides moving difficult to find ways to beryllium much businesslike there. So hopefully, we're capable to offset immoderate request to turn location pinch different efficiencies that we find. So really, it's mostly adaptable costs COGS that we spot pinch caller gross coming successful from caller states. There's evidently trading expense, but not really fixed cost.

I deliberation astir of our functions are astatine scale, are beautiful close. So that's why you're seeing mean fixed costs maturation this year, a important simplification successful fixed costs maturation year-over-year. And I besides deliberation that nan squad is moving difficult to beryllium much efficient. I deliberation that there's been a existent lightbulb that's gone disconnected present that we tin do much and really turn gross faster if we go much efficient. And there's a relationship betwixt being amended focused connected disbursal guidance and ratio pinch gross growth, pinch doing amended for nan customer.

And I deliberation making that relationship and realizing that really these things provender disconnected of each other, that nan amended we do to negociate our expenses and beryllium much businesslike arsenic an organization, nan much that we're going to beryllium capable to present worth for nan customer. And that will really lead to marketplace stock gains and gross growth. I deliberation that's been a existent rallying outcry for nan squad complete nan past year, and it continues to beryllium successful 2023.

Operator

Thank you. Our adjacent mobility comes from Michael Graham pinch Canaccord Genuity. Your statement is open.

Michael Graham

I conscionable wanted to inquire astir immoderate of nan disclosures you had astir nan maturation successful your mature states, that 2018 to 2019 cohort. You referenced 50% year-over-year growth, and you gave immoderate bully reasons for that maturation astir retention and accrued hold. I conscionable wanted to inquire astir for illustration what you are seeing successful position of customer growth, subordinate maturation successful immoderate of those mature states? And are you -- do you consciousness for illustration you're getting adjacent to terminal penetration? Or for illustration what are you learning astir nan measurement nan exemplary useful arsenic you benignant of get a small spot deeper into immoderate of these mature states?

Jason Park

Yes, awesome question. So and acknowledgment for calling that portion of nan missive out. I'd opportunity if you unpack nan 50% gross maturation that we knowledgeable successful that 2018, 2019 vintage, astir apt 70% was from existing customers and, telephone it, 20% to 30% was from caller customers. So constituent is moreover though those states were successful their 3rd aliases 4th afloat year, they were -- we were still acquiring caller customers. So, we haven't recovered a ceiling yet successful -- moreover successful those much mature states successful position of full organization penetration.

Jason Robins

And I deliberation also, if you look astatine comps astir nan world, different markets, I mean maturation typically occurs decades. And truthful obviously, maturation rates spell down. It's not going to proceed increasing astatine 50% forever, but I don't expect we've deed immoderate benignant of ceiling there. I cognize different dynamics, but nan iGaming marketplace successful New Jersey, which is now coming up connected almost a decade, still growing.

So, I deliberation tons of comps astir really not conscionable nan world, but if you look astatine nan U.S. lottery marketplace and different sorts of comparisons, it's conscionable very overmuch a marketplace that I deliberation ever has caller customers coming into it. And I deliberation there's an anticipation that we should person that location will beryllium a beautiful dependable maturation for astatine slightest different decade aliases so.

Jason Park

And conscionable ace important, Mike, for illustration nan root of maturation is -- nan constituent is it's overmuch much than conscionable caller customer acquisition. It is existing customer grip growth, that full betterment and continued promo simplification that drives that nett gross growth.

Jason Robins

And we're still successful nan shape of nan marketplace wherever we're uncovering large wins connected nan merchandise front. We're uncovering ways that we tin beryllium much smart operationally, that we tin scope customers successful a much effective way. So, I deliberation there's still galore years of conscionable invention that will thrust maturation successful our user wallet share. And erstwhile we deliberation astir wallet share, we don't conscionable deliberation astir it wrong our ain industry. We deliberation astir our customers' intermezo wallet share. And we judge that customers will beryllium consenting to walk much clip pinch america and walk much pinch america if we create amended products that they find much entertaining than different things they could beryllium doing for fun.

Clark Lampen

Thank you, guys. Congrats connected each nan progress.

Jason Robins

Thank you

Operator

Thank you. And our adjacent mobility comes from Bernie McTernan pinch Needham & Company. Your statement is open.

Bernie McTernan

Jason, I want to return your beat connected nan M&A market. And conscionable fixed everything you've talked astir successful nan shareholder missive connected profitability, does that effect your accuracy connected utilizing your banal arsenic a currency?

Jason Robins

I deliberation they're somewhat independent. Obviously, nan much that we tin get immoderate momentum down nan stock, nan much charismatic it becomes arsenic a currency. But I don't deliberation that it's really thing that we really are focused connected correct now. We're very focused connected our soul operations, focused connected getting much efficient.

Obviously, location will beryllium a clip successful nan marketplace -- and difficult to foretell because we're successful specified a accelerated shape of improvement correct now. There will beryllium a clip successful nan marketplace wherever those things really make consciousness and we tin attraction much connected it. But correct now, there's a batch of attraction connected conscionable really we tin make judge that this institution is connected a clear way to profitability and that we're operating successful nan astir businesslike and cost-effective measurement we can.

Bernie McTernan

Understood. And past conscionable a follow-up connected parlays. I deliberation a large question, conscionable fixed nan success, is wherever could it go? Do you guys person a consciousness successful position of conscionable what nan U.S. penetration of parlays is comparative to nan remainder of nan world aliases much mature markets?

Jason Robins

I deliberation that's a awesome question, and it's reliable to comparison to remainder of world. I deliberation nan U.S. is simply a spot unique. My belief is that nan U.S. user and nan gaming market, a batch of nan roots of it are successful nan lotteries wherever location person been lotteries crossed states for a batch longer than casinos and different sorts of gaming products. And that lottery mentality of large jackpots, I think, is carried complete into different products. We moreover spot it successful DFS wherever our astir charismatic offerings are nan ample tournaments that you tin participate for anyplace from $3 to $20 and triumph hundreds of thousands aliases cardinal positive successful prices.

So I deliberation that's carrying complete into nan U.S. market. And I really deliberation for that reason, parlays person much upside than they would successful different parts of nan world, not to opportunity that they're not celebrated successful different parts of nan world. They telephone them accumulators successful Europe. And certainly, that's been a large maturation area overseas. But I deliberation nan U.S. customer is uniquely oriented towards nan benignant of proposition of stake a small to triumph a lot. So I deliberation there's a batch much upside. And we're still astatine nan infancy stages of this product. I mean there's truthful overmuch we tin do to innovate and make it much breathtaking and much nosy for nan consumer.

Operator

And our adjacent mobility will travel from Ryan Sigdahl pinch Craig-Hallum. Your statement is open.

Ryan Sigdahl

Curious to get your thoughts connected nan existent competitory dynamics. We've seen respective operators pulling backmost much notably connected online sports betting and iGaming. But then, you person fanatics pinch nan astir notable precocious profile. I guess, caller incumbent coming aliases entrant coming. How do you deliberation astir promotional and trading strength from an manufacture standpoint successful 2023, amended aliases worse year-over-year?

Jason Robins

I deliberation it will beryllium better. There will beryllium much mature states. I deliberation that earthy benignant of promotional simplification that happens arsenic states mature, we'll proceed to spot a tailwind from that. Obviously, there's ever going to beryllium caller entrants coming successful and retired of nan market.

I deliberation 1 point we've seen, though, is that -- and I expect nan aforesaid would use to immoderate caller entrant. The marketplace competitively has go overmuch much rational. We talked astir this successful nan letter. There was a play of clip successful 2020 and portion of 2021, wherever location was really a connection from nan marketplace that marketplace stock and gross maturation were each that mattered. And I deliberation you saw immoderate logical behaviors from immoderate of our title coming astir arsenic a result.

And I deliberation erstwhile nan marketplace started to alteration their tune, and location was much of a request connected accountability for ratio and profitability, you saw that change. And I don't spot that changing again. I deliberation that we're successful a caller shape of nan marketplace wherever competing connected a overmuch much logical playing section is nan norm. And I deliberation that you'll proceed to spot that, whether it beryllium existing operators aliases immoderate caller operators that travel into nan market.

Operator

One moment. Our mobility comes from Dan Politzer pinch Wells Fargo. Your statement is open.

Dan Politzer

Jason, I was hoping conscionable to explain connected nan 2023 gross guidance. I deliberation for nan 4th quarter, you guys had $30 cardinal uptick successful gross from nan structural betterment successful nan hold. I conscionable want to clarify, your 2023 guideline that you issued astatine nan aforesaid clip that did see nan clasp benefit? And past conscionable for my follow-up, conscionable nan gait of nan fixed OpEx deceleration, if you could possibly parse that retired successful position of nan G&A, merchandise and tech and different firm marketing, and I guess, wherever you're seeing nan astir efficiencies.

Jason Park

Yes. So successful position of your first mobility connected clasp percentage, yes, that's each embedded wrong nan guideline and nan H1, H2 gross divided that we provided. So immoderate type of empirical shape that we're seeing that we person assurance will continue, we'll embed into our guidance. And successful position of further breakdown of P&T, S&M, G&A, fixed costs growth, I deliberation personification earlier mentioned 10% to 12% growth, I would opportunity that, that's beautiful akin crossed each 3 of those areas.

Operator

Thank you. One moment. Our adjacent mobility comes from Brandt Montour pinch Barclays. Your statement is open.

Brandt Montour

I wanted to inquire astir iGaming. Looks for illustration you guys person had really bully occurrence gaining stock connected nan DraftKings broadside In New Jersey successful nan 4th quarter, Pennsylvania successful nan 4th fourth aliases Michigan successful nan 3rd quarter. I was conscionable funny if you're capable to benignant of break down that occurrence betwixt immoderate of nan things you mentioned successful position of product, for illustration progressive jackpot aliases occurrence you've had successful cross-selling during this NFL season? Or if there's immoderate benignant of transverse learnings you're capable to -- you're leveraging from GNOG. Any colour could beryllium adjuvant for us.

Jason Robins

Thank you. I admit it. Yes, we -- I mean, we are really pleased that successful January, we had nan number 1 marketplace stock successful iGaming successful New Jersey for nan first clip since we launched successful December of 2018. So, awesome culmination of complete 4 years of effort from nan team, building products, optimizing our analytics and obviously, on-boarding a caller marque successful GNOG.

And I deliberation nan astir breathtaking point is that we consciousness nan biggest upside is yet to travel erstwhile we migrate GNOG to nan DraftKings' level and merchandise suite. That's going to hopefully hap later this year. And I deliberation that will beryllium -- springiness america an further boost arsenic good arsenic supply ongoing costs savings owed to not having to salary gross stock to arsenic galore 3rd parties. So tons of use location and I deliberation already seeing immoderate awesome results from nan merchandise side.

And also, you mentioned, too, I deliberation we've gotten moreover much effective astatine cross-sell, I think, particularly arsenic we get much data. That's benignant of our saccharine spot. The much information we have, nan much effective and businesslike we tin become. So not only person we gotten much effective astatine expanding cross-sell, we've being capable to do it much efficiently arsenic well. So that's thing that I'm very proud of that nan squad has been capable to make awesome advancement on.

Brandt Montour

And if I whitethorn conscionable quickly travel up connected that. Is it adjacent to presume that 2023 guidance assumes that you're capable to clasp nan stock gains that you conscionable precocious enjoyed?

Jason Robins

Well, there's ever seasonality successful nan business. So naturally, we're going to do champion during dense sports periods connected nan cross-sell fronts, much activity successful nan platform. So, we've embedded that in. But yes, I deliberation arsenic acold arsenic for illustration erstwhile you set for that and look astatine wherever we are today, I would say, yes, though nan January study is marque new. So I can't opportunity that we needfully for illustration looked astatine nan implications of that. But much so, what we do is we look astatine nan underlying cohort data, and we cook successful adjustments for seasonality arsenic good arsenic immoderate different initiatives aliases efforts aliases actions that we scheme connected taking.

Operator

Thank you. Our adjacent mobility comes from Joe Stauff pinch SIG. Your statement is open.

Joe Stauff

I wanted to travel up and inquire connected personification growth. Jason, you had mentioned, and certainly, we tin observe this that states are -- they're ramping truthful overmuch faster. And truthful I guess, what is nan correct measurement to deliberation astir benignant of really agelong it takes you to scope that benignant of aureate cohort now it is, I guess, possibly versus a year, 1.5 years ago? And past I had 1 follow-up, please.

Jason Robins

Well, it's a awesome question, Joe. I deliberation this is simply a tricky 1 because arsenic we comparison states, there's differences successful clip of year. So, we talk astir Arizona ramping quickly. That was successful September. And past you effort to comparison that to a authorities for illustration Ohio aliases Maryland that launched Maryland towards nan extremity of nan year, Ohio Jan 1, aliases Massachusetts that we expect to motorboat successful March. And you person to -- there's only a constricted number of information points erstwhile you person each those different variables to really beryllium capable to say. But I deliberation that's benignant of a big-picture level.

The accusation is, one, there's astir apt immoderate deeper finance upfront. So I deliberation that what we've been really happy to spot is that we've actually, astatine slightest done 2022, been capable to sorb that by uncovering efficiencies passim nan remainder of nan business. If you look astatine nan letter, we fundamentally funded each of nan authorities launches successful 2022 done uncovering costs efficiencies elsewhere successful nan business. But past nan different accusation of it is that nan inflection towards publication profit affirmative happens sooner.

You get greater operating leverage sooner, which intends much upside from a gross and profitability standpoint sooner. So, I deliberation that's benignant of nan measurement to deliberation astir it. Exactly really it ends up netting retired complete nan people of nan year, I deliberation we request a small spot much information to see. But astatine a macro level, that's benignant of really I picture it. And it is -- nary matter what, whether you return seasonality, thing else, it is unequivocally observably existent that states are ramping overmuch faster than they were three, 4 years ago.

Joe Stauff

That makes sense. And past possibly conscionable a follow-up connected structural clasp successful general. You surely mentioned that nan caller in-house NBA same-game parlay benignant of capabilities that you had launched, and I was wondering I cognize astatine slightest for portion of your NFL product, you do outsource same-game parlay. I'm wondering if your '23 guideline includes bringing that in-house.

Jason Robins

So, nan squad is moving astatine bringing that in-house now. As acold arsenic our '23 guide, we do expect, astatine immoderate constituent successful 2023, that, that will beryllium nan lawsuit and that is built into nan guide, but it won't impact nan entirety of 2023. And I noted this earlier, we person already started to rotation retired immoderate of our ain in-house SGP -- astir recently, nan unrecorded SGP MBA merchandise we rolled out, which was nan first successful nan manufacture to -- we were nan first successful nan manufacture to person it.

So, I deliberation that's a bully awesome that we're reaching a play wherever we person now pinch complete a 1.5 years nether our belt, tons of information to build retired immoderate of these caller models. We've gotten to a constituent wherever we consciousness for illustration we tin put retired models that are arsenic bully aliases amended than what we tin get disconnected nan support from 3rd parties.

Operator

Our adjacent mobility comes from Chad Beynon pinch Macquarie.

Chad Beynon

First, conscionable wanted to inquire astir opportunities aliases aspirations successful non-North American markets. Given your information subject and benignant of each nan learnings that you've had successful nan past mates of years, it seems for illustration you're successful a beautiful bully position to make it past successful immoderate of those markets, obviously, a batch to do still present successful North America, but wondering if thing has changed successful different markets.

Jason Robins

I do deliberation you're correct that nan exertion we've built is going to beryllium very portable to nan world gaming market. And we judge that erstwhile we do determine to grow overseas, we'll person advantages complete incumbent title erstwhile it comes to product, erstwhile it comes to clasp rate, things for illustration that. That said, we are laser-focused connected nan U.S. and connected Ontario correct now. I deliberation that nan opportunity present remains very important and growing. We person a batch of activity to do to go much businesslike arsenic an statement that we request to attraction on.

There will beryllium a clip and a spot to attraction connected world description , but it's not going to beryllium correct now. Doesn't mean that we won't look astatine it and commencement to do immoderate exploratory activity this twelvemonth down nan scenes. I deliberation we person to ever beryllium reasoning astir what early things we want to do and commencement laying immoderate of nan investigation and groundwork for that. But connected nan whole, nan squad is very focused connected really do we proceed to make advancement and do amended for nan customer successful nan U.S. and really do we proceed to go much businesslike and costs effective arsenic an organization.

Chad Beynon

And past a follow-up to that, conscionable connected nan iGaming, iCasino legislation, I cognize you and your competitors connected nan mobile broadside are doing a batch of activity communicating nan story, but it besides seems for illustration a batch of nan land-based operators are arsenic well, arsenic they've seen astir apt little cannibalization than they whitethorn person feared. So do you deliberation location will beryllium much momentum? Do you deliberation that's much based connected benignant of what happens successful nan economy? What's really going to commencement benignant of nan rolling chromatic for much iCasino discussions?

Jason Robins

Yes, it's a awesome question. And I deliberation that location are -- you noted one. I think, certainly, nan opportunity for taxation revenue, and should states find themselves much successful request of that, that could person an effect.

I besides deliberation that arsenic an industry, we request to do a amended occupation getting nan communicative retired there. There's a batch of awesome activity that's been done by nan EGA and different groups to really put nan information retired location astir conscionable really important and ample nan forbidden sports betting marketplace is. And I deliberation that's been a large driver of policymakers saying, "Look, we sewage to do thing here."

I don't deliberation there's been astir arsenic overmuch sum of nan forbidden iGaming market, moreover though it exists. I mean if you spell to beautiful overmuch immoderate of nan mobile sportsbooks and online sports books that you spot overseas that are operating illegally, they -- almost each of them person an online casino. It's conscionable not talked astir arsenic much.

I deliberation inherently, it's a little societal product. People talk astir it less. And past for illustration I said, nan manufacture astir apt conscionable hasn't focused arsenic overmuch arsenic we could person connected really making that information clear. So I deliberation it's a operation of those 2 things of states that spot nan taxation opportunity and recognize that there's a existent measurement to return thing that's happening already, conscionable for illustration sports betting is successful nan forbidden marketplace and bring it into nan ray and protect consumers and besides make gross for nan state.

Operator

Thank you. And our adjacent mobility comes from Robin Farley pinch UBS. Your statement is open.

Robin Farley

I wonder, if you could springiness america a small spot of colour connected your guidance for states that are publication positive? It was 11 states getting to $105 cardinal past year. For nan $500 cardinal this year, really galore states will that beryllium to make that $500 million? And is it still -- astatine 1 point, you talked astir a three-year payback play for erstwhile a caller authorities legalizes until it's profitable. Is that faster now, fixed nan ramp-up successful Arizona? What would you opportunity that clip statement is?

And past last, small clarification. You talked astir nan percent of organization that your semipermanent guidance is 7% to 9% of caller OSB each year. It's adjacent to say, though, right, that your '23 and '24 guidance, doesn't trust connected your '24 guidance, doesn't trust connected immoderate states that haven't already really legalized conscionable not operational yet, right? In different words, nary caller authorities needs to hap for that to beryllium hit?

Jason Robins

That past constituent is correct. The only authorities that's not moreover unrecorded yet that we did presume successful nan guidance is Massachusetts. And nan logic is it's beautiful acold down nan line. So we felt it was much adjuvant to investors to get a position pinch Massachusetts included. But we person not assumed immoderate different authorities launches from caller legalization that happens this year.

As acold arsenic -- I'm going to effort to retrieve that. I deliberation nan first one, connected a benignant of state-by-state basis, we person not disclosed which states are publication profit affirmative for '23 yet. We scheme connected covering that successful much item astatine our Investor Day later this year. So, we will beryllium providing further disclosure and information connected that. We had to prevention thing for that to support -- to get you to show up, Robin. And past connected -- I'm sorry, what was your 2nd question? Oh velocity and inflection.

Robin Farley

Oh conscionable nan speed.

Jason Robins

And proximity inflection. Yes, yes. So I deliberation you're perfectly correct. One of nan implications of faster ramping pinch caller states, that nan inflection to profitability and nan grade of operating leverage that you get earlier is greater than what we had seen successful immoderate of nan earlier states that launched successful much of nan 2018, '19, '20 clip frame.

So, location is that implication, and I deliberation that could perchance person an effect not conscionable pinch nan states we're seeing motorboat successful caller months arsenic good arsenic Massachusetts, but pinch early states that launched that again, thing I deliberation we'll reside astatine nan Investor Day. But successful a nutshell, to reply your mobility directly, I do deliberation it brings successful nan clip statement to way to profitability for a caller state. And we'll beryllium providing a much circumstantial update connected that later this year.

Jason Park

I conscionable want to beryllium clear, Robin, that 2024 EBITDA does see an presumption of much states legalized.

Jason Robins

Yes. Sorry. So, '23 does not. '24, we person assumed 7% to 9% aliases 7% to 8%, I forget, if nan organization launches for sports betting and 3% to 4% for iGaming.

Robin Farley

Okay. So, that would beryllium immoderate caller states successful this legislative session, right, would person to...

Jason Robins

That would be, yes. And nan implication, if that comes successful precocious aliases debased aliases if it's little so, while it whitethorn mean little TAM, it really intends we're astir apt going to person faster profitability ramp. So, I deliberation either way, it's a bully communicative for nan Company. But obviously, we're pushing difficult to get much authorities passed.

Robin Farley

And past also, that would mean that your 2023 guidance includes nan losses from those caller states, right? If nan profitability is successful your '24 guidance, nan losses would beryllium successful nan '23 guidance already. In theory, that would beryllium nan portion of it.

Jason Robins

No, no, sorry. We did not -- no. We assumed, different than Massachusetts, nary much authorities launches successful '23. So location will beryllium nary effect successful '23 if that occurs. If we do spot much states motorboat successful '23, yes, that will happen. But what I was referring to was launches successful '24. So what that would mean is that nan finance play for those states would beryllium successful '24. And it would person a downward -- sorry, if location were not launches, would person a affirmative effect connected EBITDA successful 2024.

Operator

Thank you. And our adjacent mobility comes from Joe Greff pinch JPMorgan. Your statement is open.

Joe Greff

Just pinch respect to nan incremental use successful '23 -- aliases '23 updated guidance versus 3 months agone and nan use coming from much businesslike promotional activity and much businesslike promotional reinvestment, really broad-based is that? Or really marketplace concentrated is that? And past really overmuch of a use from a marketplace for illustration New York is driving that improvement?

Jason Robins

Well, nan bulk of our guidance summation connected nan EBITDA broadside came from nonstop management. So astir half of it came -- aliases astir $50 cardinal of it, I should say, came from compensation expense, astir $50 cardinal came from marketing. So, decidedly a large effect there, immoderate of nan gross summation was clasp complaint and promotion optimization. Some of it was immoderate underlying handle/retention metrics we're seeing successful our cohorts.

As acold arsenic authorities by state, I don't deliberation there's thing successful peculiar astatine nan authorities level that's different. States are maturing arsenic expected. And nan increases we're seeing, nan clasp complaint are happening crossed nan board. We do spot successful immoderate of nan newer states that we've launched that we person faster take of parlays and same-game parlays.

I deliberation that's mostly because our merchandise offering is successful specified a amended spot than it was a mates of years ago. But that, I think, is astir apt nan 1 example. Other than that, I deliberation nan increases that we're making to clasp complaint and different things that are driving underlying capacity connected nan retention and monetization beforehand are really crossed authorities vintages.

Operator

Thank you. And that's each nan clip we person for questions. I'd for illustration to move nan telephone backmost to Jason Robbins for closing remarks.

Jason Robins

Thank you each for joining america connected today's call. We had a really awesome decorativeness to 2022 and are excited astir 2023 and beyond. I look guardant to speaking pinch you complete nan adjacent fewer weeks and dream you each enactment safe and well. Thank you.

Operator

This concludes today's convention call. Thank you for participating. You whitethorn now disconnect.

Editor: Naga



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