DraftKings Results Presentation Deck
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Net Income (Loss) to Non-GAAP Adjusted EBITDA Reconciliation
$ Thousands
Adjusted EBITDA
We define and calculate Adjusted EBITDA as net 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.
Revenue
Cost of revenue
Sales and marketing
Product and technology
General and administrative
Loss from operations
Other income (expense):
Interest income
Interest expense
Gain (loss) on remeasurement of warrant liabilities
Other income, net
Loss before income tax provision (benefit) and loss from equity method
investment
Income tax provision (benefit)
(Gain) loss from equity method investment
Net loss attributable to common stockholders
Adjusted for:
Depreciation and amortization (¹)
Interest income, net
Income tax provision (benefit)
Stock-based compensation (²)
Transaction-related costs(3)
Litigation, settlement and related costs (4)
Advocacy and other related legal expenses (5)
Loss (gain) on remeasurement of warrant liabilities
Other non-recurring and non-operating (income) costs (6)
Adjusted EBITDA
$
$
Three months ended March 31
2023
2022
769,652
521,740
389,133
88,088
160,476
(389,785)
11,795
(655)
(17,035)
19
(395,661)
1,368
119
(397,148)
48,213
(11,140)
1,368
117,400
2,563
17,035
98
(221,611)
$ 417,205
313,379
321,452
81,352
216,606
(515,584)
801
(653)
12,681
37,882
$ (464,873)
469
2,351
(467,693)
32,225
(148)
469
187,077
3,774
1,950
(12,681)
(34,482)
(289,509)
(1) The amounts include the amortization of acquired intangible assets of $29.8 million and $19.2 million for the three months ended March 31, 2023 and 2022, respectively.
(2) Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans.
(3) Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with pending or completed transactions and offerings, including costs relating to the DraftKings' acquisition of Golden Nugget Online Gaming, Inc. in 2022.
(4) Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.
(5)
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. For the three months ended March 31, 2023 and
2022, we did not incur any such costs. 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.
(6) Primarily includes the change in fair value of certain financial assets, as well as our equity method share of the investee's losses and other costs relating to non-recurring and non-operating items.
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