DraftKings (NASDAQ:DKNG) has delivered a robust financial performance for the fiscal year 2023, with a notable 64% increase in revenue year-over-year. The company also recorded its first two quarters of positive adjusted EBITDA. Looking forward, DraftKings aims to bolster its competitive position in the US online gaming market through product innovation, enhanced customer experiences, and improved operational efficiency. The acquisition of Jackpocket, a digital lottery platform, is a strategic move to expand their market reach and optimize customer acquisition costs and lifetime value.
For the fiscal year 2024, the company forecasts revenue to be between $4.65 billion and $4.9 billion and anticipates an adjusted EBITDA ranging from $410 million to $510 million. DraftKings also projects free cash flow generation of $310 million to $410 million in 2024 and is exploring strategies to optimize capital structure and maximize shareholder returns.
Key Takeaways
- DraftKings reports a 64% increase in revenue for fiscal year 2023.
- The company achieves positive adjusted EBITDA for the first two quarters.
- Plans to acquire Jackpocket to enhance market position and customer value.
- DraftKings expects 2024 revenue between $4.65 billion and $4.9 billion.
- Anticipates adjusted EBITDA of $410 million to $510 million for 2024.
- Projects to generate $310 million to $410 million in free cash flow in 2024.
- Aims to optimize capital structure to benefit shareholders.
Company Outlook
- DraftKings provides optimistic guidance for fiscal year 2024.
- The company is focused on maintaining a competitive edge through innovation and efficiency.
- They are exploring ways to optimize their capital structure for long-term shareholder returns.
Bearish Highlights
- CEO Jason Robins is cautious about the timing of synergies from the Jackpocket acquisition.
- Regulatory and technological challenges exist in expanding into new states.
- Illinois seems unlikely to pursue iGaming legislation in the near term.
Bullish Highlights
- Continuous growth observed in the company's oldest states.
- The parlay mix is trending positively, with expectations for it to increase.
- Product advancements and CRM optimization have led to improved customer retention.
- Synergies expected from the integration of Jackpocket and DraftKings offerings.
- Optimism about potential iGaming legalization in several states.
Misses
- Specific details on new offerings planned for the year were not provided.
- The Jackpocket acquisition is not expected to have a material impact on this year's financials.
- The Super Bowl outcome did not significantly impact hold rates.
Q&A Highlights
- CEO Robins discussed the strategic alignment of the Jackpocket acquisition with the goal of winning in the US market.
- Potential opportunities in Texas and New York were highlighted.
- Robins emphasized a disciplined approach to M&A, focusing on creating shareholder value.
- The company expects a structural hold of 10% to 10.5% for 2024.
- DraftKings sees the expansion of lottery offerings as a great opportunity with lower barriers to entry.
- Marketing spend in 2024 is expected to be more effective, not necessarily higher.
- Robins expressed excitement for the opportunities in 2024 and beyond.
InvestingPro Insights
DraftKings (DKNG) has indeed shown a strong financial performance with significant revenue growth in the past year. According to real-time data from InvestingPro, the company's revenue growth over the last twelve months as of Q3 2023 stands at a robust 76.99%, highlighting the company's expanding market presence and effective business strategies. Despite this impressive growth, analysts are cautious as they have revised their earnings downwards for the upcoming period, which is an important factor for investors to consider.
InvestingPro Tips suggest that while DraftKings has been delivering high returns, with a 149.64% increase over the last year, the stock is currently trading near its 52-week high, at 98.91% of that peak. This could indicate a cautious approach for potential investors, considering the stock's current price level and its volatile nature. Moreover, the company's Price/Book ratio as of Q3 2023 is 26.22, which is relatively high and may suggest that the stock is trading at a premium compared to its book value.
Investors looking for a more in-depth analysis can find additional InvestingPro Tips for DraftKings, which cover various aspects such as debt levels, profitability, and stock price volatility. For those interested in gaining comprehensive insights and making informed decisions, InvestingPro offers a wide array of tips—there are 17 additional tips available for DraftKings on https://www.investing.com/pro/DKNG. To access these valuable insights, investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Key InvestingPro Data metrics to note:
- Market Cap (Adjusted): $21.01B USD
- Revenue Growth (Quarterly) for Q3 2023: 57.38%
- Price, Previous Close: $44.46 USD
DraftKings' forward-looking strategy, as outlined in the article, is supported by these data points, which reflect the company's current market valuation and recent growth trajectory. The real-time metrics and InvestingPro Tips combined offer a nuanced view of DraftKings' financial health and market position as it continues to innovate and expand in the competitive online gaming sector.
Full transcript - Diamond Eagle Acquisition Corp (DKNG) Q4 2023:
Operator: Good day, and welcome to the DraftKings Q4 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. I’d now like to turn the call over to Stanton Dodge, Chief Legal Officer. You may begin.
Stanton Dodge: Good morning, everyone, and thank you for joining us today. Certain statements we make during this call may constitute forward-looking statements that are subject to risks, uncertainties, and other factors, as discussed further in our SEC filings, that could cause our actual results to differ materially from our historical results or from our forecasts. We assume no responsibility to update forward-looking statements other than as required by law. During this call, management will also discuss certain non-GAAP financial measures that we believe may be useful in evaluating DraftKings' operating performance. These measures should not be considered in isolation or as a substitute for DraftKings financial results prepared in accordance with GAAP. Reconciliation of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release and presentation, which can be found on our website and in our annual report on Form 10-K filed with the SEC. Hosting the call today, we have Jason Robins, Co-Founder and Chief Executive Officer of DraftKings, who will share some opening remarks and update on our business, and Jason Park, Chief Financial Officer of DraftKings, who will provide a review of our financials. We will then open the line to questions. I will now turn the call over to Jason Robins.
Jason Robins: Good morning, and thank you all for joining. Last year at this time, we shared our first end of year letter. In that letter, I described DraftKings as a company that would thrive when business conditions became more challenging. I wrote that our culture and people positioned us well to execute, which effectively made 2023 a proven year for DraftKings. As you've seen, our team rose to the occasion. Revenue increased 64% year-over-year in fiscal year 2023, even with very customer-friendly outcomes in late November. More importantly, we improved adjusted EBITDA in fiscal year 2023 by nearly $600 million year-over-year and posted our first two adjusted EBITDA positive quarters in company history. Beyond our financial highlights, we improved our product and customer experience and also made a number of operational improvements to better serve our customers and operate more efficiently. We gained share, including taking the number one position in combined OSB and iGaming gross gaming revenue share in the US for the third quarter. We focused on our core value drivers and empowered our leaders to set aspirational goals and drive their teams to meet and exceed those goals. We lean heavily on data and analytics, giving us the confidence to cut expenses in some areas and double down in others. This year, our focus will largely be on essentially the same items. We are still in the early innings of the US online gaming industry, and there is still share that can be gained through innovation and operational excellence. We will continue to focus on product and customer experience as key differentiators. We will continue to leverage our scale to invest in important areas, while also focusing heavily on efficiency and optimization. And we will continue to focus on the core value drivers of our business. Having superior lifetime values and customer acquisition costs is the ultimate competitive advantage. And we have a number of initiatives planned to enhance both in 2024 and beyond. We also continue to face new competition as we consistently have over the years. In the past, we've been able to drive growth and gain share, while simultaneously becoming more efficient. But importantly, we do not take any of our recent success for granted. We have the right team in place and are working hard to maintain our edge. Going into 2024, there are three main opportunities on my mind. The first is continuing to foster our entrepreneurial culture and empower our great people to pursue big opportunities. The second is developing our next crop of leaders and giving them opportunities that allow them to stretch, grow, and contribute at higher levels. The third is leveraging our free cash flow which we expect to generate in order to maximize value for our shareholders. We are excited to have an agreement to bring Jackpocket into the DraftKings family and enter the rapidly growing US digital lottery vertical. Importantly, this is not just a new product for our customers to enjoy, but really a way to strengthen our core OSB and iGaming position in the US by optimizing our overall LTV and CAC. We look forward to working together to provide tremendous and differentiated value to the combined customer base. In closing, 2023 is a fantastic year for DraftKings, yet I believe that 2024 will be even better. I am unbelievably excited about the plans we have in place to continue serving our customers and growing our business. Most importantly, I am excited about the quality of the team we have in place, and I have no doubt that we will continue to execute very effectively against our key priorities this year. We will work tirelessly to produce great results and build on the incredible momentum we generated in 2023. With that, I will turn it over to Jason Park.
Jason Park: Thank you, Jason. I'll hit the highlights, including our full year 2023 and fourth quarter performance and our updated guidance for 2024. Please note, that all income statement measures discussed except for revenue are on a non-GAAP adjusted EBITDA basis. As Jason mentioned, the organization is executing very well, and that is showing up in our results. In fiscal year 2023, revenue grew 64% versus 2022, and adjusted EBITDA improved year-over-year by nearly $600 million versus 2022, which resulted in year-over-year adjusted EBITDA flow through percentage of 40%. Adjusted gross margin increased nearly 200 basis points as we delivered higher sportsbook hold percentage and improved our promotional reinvestment for OSB and iGaming. Adjusted sales and marketing expense grew 3% as we reduced marketing in our more mature states and transitioned further into more efficient national marketing. In the fourth quarter, we continued to generate great performance across our core value drivers and produced more than $1.2 billion of revenue and $151 million of positive adjusted EBITDA. Better customer acquisition, retention, and engagement resulted in higher than expected handle for the quarter and positively impacted revenue and adjusted EBITDA by $93 million and $42 million, respectively. Structural sportsbook hold percentage was 10.4% and well ahead of expectations as we continued to improve our parlay mix and optimize our trading capabilities. This trend positively impacted revenue and adjusted EBITDA by $53 million and $38 million, respectively. As you are well aware of by now, sport outcomes were very customer friendly in the fourth quarter, primarily in the final two weeks of November, while December was consistent with expectations. Our actual sportsbook hold percentage for the fourth quarter was 9.2% due to sport outcomes, which were a headwind to revenue and adjusted EBITDA of $175 million and $126 million, respectively, compared to our expectations. Moving on to our full year 2024 guidance, we are poised for a rapid increase in adjusted EBITDA due to continued strong revenue growth coupled with a scaled fixed cost structure. In November of 2023, we guided fiscal year 2024 revenue of $4.5 billion to $4.8 billion and adjusted EBITDA of $350 million to $450 million. Today, we are improving our fiscal year 2024 revenue guidance range to $4.65 billion to $4.9 billion and our adjusted EBITDA guidance range to $410 million to $510 million. Customer acquisition, retention, and engagement in Q4 and Q1 to date has continued to exceed expectations due to ongoing product innovation and marketing optimization initiatives. These trends account for $90 million of the revenue improvement and $35 million of the adjusted EBITDA improvement. Higher structural sportsbook hold percentage as a result of continued year-over-year bet mix improvement, as well as improvements in trading and risk management accounts for $35 million of the revenue improvement and $25 million of the adjusted EBITDA improvement. From an intra-year perspective in 2024, we expect first quarter revenue to increase approximately 45% year-over-year and second through fourth quarter revenue to each grow year-over-year in the 20% to 30% range. We expect adjusted EBITDA to be approximately breakeven in the first quarter, nearly $150 million in the second quarter, and above $300 million in the fourth quarter. Importantly, we are also now guiding free cash flow. We expect to generate between $310 million and $410 million in free cash flow in 2024 based on approximately $120 million of annual CapEx and capitalized software development costs, as well as a modest source of cash from changes in networking capital and interest income. Therefore, we will end the year with approximately $1.6 billion of cash before using approximately $413 million to fund our proposed acquisition of Jackpocket. Looking further ahead, as discussed at our Investor Day and the letter we released last night, we expect to generate positive and increasing free cash flow starting this year and are beginning to explore ways to optimize our capital structure. Our expectation for sustainable revenue growth and adjusted EBITDA margin expansion over the next several years offers us a number of options to maximize long-term returns for our shareholders. That concludes our remarks and we will now open the line for questions.
Operator: Thank you. [Operator Instructions] Our first question comes from David Katz with Jefferies. Your line is open.
David Katz: Hi, good morning, everyone. Thanks for taking my question.
Jason Robins: Good morning.
David Katz: What I wanted to do -- Good morning. And congrats on the quarter. So I wanted to delve a little further into sort of what the next phase really looks like. And if you could talk about the kinds of product advancement, the kinds of features and functionality where your focus is in play, part of what's next for domestic sports betting, where is it all going to come from, I suppose?
Jason Robins: It's a very good question, very big picture. I think it sounds like product is sort of part of your question. I definitely think in play is a huge opportunity, as you noted. Still very early stages of that developing, and I think there's a lot, both on the product side and also on the broadcast side that can be done to make that experience better and more accessible to -- or at least more interesting to a larger audience. I still think there's a lot of room to move on just organic growth of parlays and other sorts of things. I mean, remember we just launched progressive parlay recently, so that product is still very early in its development and should continue to drive strong parlay mix increase. And then there's a number of other initiatives that we have that we'll be rolling out throughout the year that I'm not going to steal my product team's thunder on, but we have lots of good stuff planned. I think really key thing to remember is, it's still super early days. A lot of the things that we think will happen over the coming years will greatly change the way that the product and the customer experience works. It's going to evolve quite a bit. I think it's a pretty exciting time and still very early stages, so lots of room to grow.
David Katz: Thank you. And if I may just follow up quickly, with respect to Jackpocket, seems like a nice business that generates a little bit of return, but more as a customer acquisition vehicle. As we think about these cash allocation decisions going forward are there more things like this that are contemplated or is it more a function of capital structure and returns? And that's it for me. Thank you.
Jason Robins: Yes, I think it's more the latter. There's all sorts of different options that we're looking at for how to maximize shareholder return with the capital we'll be accumulating on our balance sheet. I think what you will see though is, we're going to stay very squarely on strategy. We talked about how priority A is winning in the US and I think Jackpocket is absolutely in line with that. Lottery is the oldest form of gaming in the US. It's been around forever. The audience is massive. And as you noted, it's a very efficient way to acquire customers in mass at extraordinarily lower CACs than what we see in the other forms of online gaming. And we know from overlap analysis that we did that those customers will cross sell very effectively too. And from the overlap analysis we did, we saw that the customers that overlapped were about 50% higher spend on DraftKings OSB and iGaming products than customers who didn't. So lots of reason to believe that not only is there cheap acquisition, but there's also high LTV customers that we can cross over. And I think that's a really core thing that DFS provided for us as an advantage too. So if you look at kind of the playbook that's worked for us, entering new states, having a built-up database, having an active base of customers that we can cross-sell. I think this is doubling down on that.
David Katz: Thank you.
Operator: Thank you. Our next question comes from Shaun Kelley with Bank of America. Your line is open.
Shaun Kelley: Hi, good morning, everyone. Jason or Jason, I was hoping you'd comment a little bit on just how the fourth quarter played out from a promotional activity perspective. So overall, we didn't see quite the sequential improvement in promotions that we saw a year ago between the third quarter and the fourth quarter. So what are we seeing as the business level is off there? And just if you could characterize a little bit, given plenty of nail biting out there strategically about new customers, launches, sport mix changes obviously between NFL and NBA. Just help us kind of characterize the landscape as you saw it and we move through 4Q and into January.
Jason Robins: Yes. So, I mean, there's a couple things to play here. First, for a fixed amount of promotions, obviously lower hold due to sport outcomes. And I mean, we had the worst two-week stretch of sport outcomes from a dollar cost basis that we've ever had as a public company. So that's going to just naturally make up. But if you look at sort of the adjusted for outcomes numbers, it was down to 300 basis points year-over-year. I think also, we had a blowout quarter from a customer acquisition perspective. So you're going to have a little bit higher promotion rate when that happens. And if you isolate to the retention side, to existing customer promotions, those were down even more significantly year-over-year. So we're actually seeing really good trends on that front, playing out pretty much exactly as we expected. And I think where you're seeing some noise is just from some of the outcomes and also a blowout quarter from customer acquisition. But even despite all that, when you adjust just for the outcomes and leave the acquisition numbers in there, it was still 200 bps to 300 bps lower year-over-year.
Shaun Kelley: Very helpful. And just for my follow-up, if we could talk about Jackpocket, the business today, our belief of this is probably is losing a little bit. Just trying to kind of get a sense of contribution as we move out and you actually consolidate this business probably more in 2025. What's your sort of risk tolerance around what you'd be willing to invest or commit to this business, again, from a capital or loss perspective for those couple of years, while you want to ramp it? Because it seems like at least in the forecast that you've given, there's a heck of a lot of organic growth that you can also attribute to this business. So help us balance those two and maybe losses or potential investment in 2025.
Jason Robins: Yes. First of all, regardless of when this closes, if it closes in 2024, it will not have a material impact. It will not cause us to change our guide, so let me be clear on that. We're talking low single digit losses this year, and I think next year will be a positive year. I think the real question is how much, depending on timing of close, synergy can we realize next year and how much upside is there. But I don't expect this to be any sort of drag. If anything, it'll be, I think some pleasant upside, but we're just hesitant to kind of commit to timing of synergies given that we don't have a definitive date of close yet. So really, I think that's the question for 2025 is, is it going to be slightly positive or are we going to be able to capture real meaningful synergies and start to accelerate some of the expected synergies that we have pegged for 2026 currently? And that's currently not something that we really can peg given we're not certain of the closing timing. But just to be completely clear, this will not change our guide regardless of when we close in 2024, and this should be, if anything, a positive, certainly not a drag on EBITDA in 2025.
Shaun Kelley: Thank you very much.
Operator: Thank you. Our next question comes from Stephen Grambling with Morgan Stanley. Your line is open. Our next question comes from Stephen Grambling with Morgan Stanley. Your line is open. Our next question comes from Joe Greff with Morgan Stanley.
Joe Greff: This is Joe Greff with JP Morgan. Good morning, guys. Depending on how you want to answer this, what was the parlay mix in the fourth quarter, if you want to look at it by handle or GGR or a number of bets? What's the assumption for parlay mix growth for 2024? And then maybe another way to answer the question too, if we look at Illinois, the only state that really details parlay activity, no matter how you cut it, you had a huge spike in what was reported for parlay bet mix or parlay handle mix in December versus November. Specifically, what's going on there and is that representative of other states with respect to parlay activity?
Jason Robins: Yes, so for the fourth quarter, we were around 30%. We think there may have been an error in the Illinois report for December that overstated it, so that's something we're still digging into. But it was around 30% for the fourth quarter, and we expect continued increase this year. We haven't put any exact numbers out for what we are forecasting parlay mix to be. I think some of this -- somebody mentioned in-game betting earlier. There's so many moving parts and people have to remember, as different levers for monetization are increasingly being adopted by consumers, you're going to see lots of things moving. In-game betting, of course, is going to have less parlay mix just because of the rapid nature of it and therefore may have lower hold, but it's still a very good thing for monetization. So this is something we have to always keep in mind. Obviously, hold and parlay mix are big levers, but it's not the only lever. Those are not the only levers that we have to increase monetization. But to answer your question, for Q4 is 30%, and we're going to dig in and figure out what's going on with the Illinois data, but that looks a little off to me.
Joe Greff: Thank you.
Operator: Thank you. Our next question comes from Robin Farley with UBS. Your line is open.
Robin Farley: Great. Thanks. I wanted to go back to the Jackpocket acquisition for a moment. Just to kind of understand the opportunity, it sounds like there is already pretty significant overlap between the two customer bases. So is the idea that it's the opportunity to penetrate even more than that significant amount or is it more in new states where Jackpockets operating and you're not there yet, although that would seem like a relatively small number of states? So just wondering if you could help us think about, since there's already so much overlap, where the incremental comes from. Thanks.
Jason Robins: Yes, it's a great question. I mean, first, the fact that there's overlap shows us that the customers are very similar type of customer. And we looked at a number of different data points to verify that from demographic data to other behavioral and psychographical stuff. I think the idea is that overlap was with zero CRM or actual effort put towards cross sell. And it's nowhere near the cross sell that we've been able to achieve from OSB to iGaming. So we think there's a ton of upside there with real meaningful effort put towards that. And that's something we do best. We feel like we have the best in the industry cross-sell rates. And I think whether it's BFS to OSB and iGaming or OSB to iGaming or any of the above, we've been able to achieve much higher cross-sell rates through our efforts. So I have to imagine there's a ton of upside there. And the other thing is, if we're seeing natural overlap with our audience, probably many of those are still using competitor products and not us. So I think there's also an opportunity to market more effectively to customers in our database that may still be playing OSB and iGaming, but with competitors, maybe in the Jackpocket database, I should say. So I think that's number one. And then number two is, you're right, absolutely, every new state that opens, this is just like DFS has been for us. We have this built-in customer base. We know that there's tons of people around the nation that play lotteries. One of the great things about this, too, is unlike OSB and iGaming, you don't need legislative action in most states in order to get lottery, courier lottery, digital courier lottery launch. You need to get usually some kind of approval through the lottery director and the executive branch, but you don't need legislative action, which makes it a much lower hurdle to get up and running in new states. And this is something, of course, that every state lottery we think would want. It'll grow the lottery market, bring new customers in. So I think it's a great opportunity to get a product potentially in the vast majority of US states. And you're absolutely right. I think as time goes on, if you like us believe that more and more states will continue to launch OSB and iGaming then it'll be the gift that keeps on giving.
Robin Farley: Okay. Thanks very much and just a follow-up in terms of your acquisition philosophy overall. Are you more likely to do things related to technology for your product, or are you looking more for things like this that have to do with customer acquisition? Thanks.
Jason Robins: I think we feel pretty good about our technology stack. I think that there may be small bolt-ons here and there that we think are helpful to enhance. But I really think it's more about these kind of strategic moves that are going to help us win in US online gaming. And you know I think we're going to be super disciplined on M&A. I don't think you'll see us go in this rash of buying companies left and right. This is one we did a ton of diligence on. We underwrote it very carefully with very conservative, I think, assumptions. And we feel like it has high potential to be a real home run. So I think you're going to see us pursuing things like that that really make a lot of sense when you think about it. And I think you're going to see us continue to be super disciplined and you're going to see us look at all sorts of different ways to take the capital that we're accumulating, create shareholder value. This is -- M&A is not the only way to do it, there are many others. So, I think that's the best way I'd describe it. And I think it fits with how we're disciplined in general as a company. If you look at the deals we do on the business development and partnership side, it's the same thing. We use a lot of discretion. We're very careful and we underwrite with a very strong analytic process and that's exactly how we approach this M&A deal.
Robin Farley: Great. Thanks very much. Thanks.
Operator: Thank you. Our next question comes from Dan Politzer with Wells Fargo. Your line is open.
Daniel Politzer: Hey, good morning, everyone, and thanks for taking my questions. First one, just wanted to touch on structural hold. I think you guided the 10% to 10.5% for 2024, And I think that's about 50 basis points up year-over-year versus over 200 basis points in 2023. Now, I get you're coming off a higher base, but I guess to what extent does this reflect some degree of conservatism? And are you seeing more casual bettors come into your system just as another competitor has launched and recently you talked about growing the market there?
Jason Robins: I think, first, I'm glad that you feel that there's some upside there. I do too. I noted this earlier, I think one of the reasons that we're a little cautious with holes is that, there are other things you can do to improve modernization, like pushing live betting more that might actually not increase hole but still be very good from an LTV standpoint. So we want to make sure that we leave some flexibility for all sorts of different levers. And at the same time, I do think you're right, there's probably some upside there. Really for us, we've always had a nice mix of customers across the spectrum. And I do think in the last few months, there's been more casual customers coming in, but there's been more customers of all sorts of spend and sort of across the spectrum of spend. So really not seeing anything tremendously different other than just really strong customer acquisition across the board, but I can't look at it and say it's skewing more cash flow or anything like that. It just seems like overall customer acquisition is just really strong right now.
Jason Park: I would just add Dan, our philosophy on guiding to hold rate has been that we should commit to something that we have empirically realized. So as you saw, structural hold in Q4 was better than we thought, and that gave us conviction to increase the embedded hold rate in our 2024 guide. But to Jason's point, we've got a lot of work going on to improve that, but our philosophy has been only to commit to what we've empirically actualized.
Daniel Politzer: Got it. That's helpful. And then just for my follow-up, you alluded to some comments in the prepared remarks on optimizing capital structure. I mean, how should we interpret that? Are you kind of referring to maybe incurring some debt and maybe long-term as you think about the company and maturing and becoming cash flow positive, how do you think about a healthy leverage ratio and what that might look like?
Jason Robins: Yes, I mean, that is something that we're actively looking at right now. So we're still doing our work, but we'll have more to say on that in the coming months.
Daniel Politzer: Thanks so much.
Jason Park: Yes, I would just add. I mean, if you look at our cash balance that we forecasted, $1.6 billion at the end of this year, including the $400 million, roughly, for the acquisition of Jackpocket, and then our multi-year plan that we outlined in November, we're obviously going to be accumulating cash very quickly. So it's a great position to be in and we're exploring all those options in.
Daniel Politzer: Appreciate all the detail. Thanks.
Operator: Thank you. Our next question comes from Robert Fishman with MoffettNathanson. Your line is open.
Robert Fishman: Good morning. I'm curious, can you talk about the recent hiring of Marie Donoghue as Chief Business and Growth Officer? I'm wondering, how does her prior experience at Amazon (NASDAQ:AMZN) Sports potentially impact DraftKings appetite to explore sports rights down the road?
Jason Robins: Yes, we're really excited that Marie on board, I mean she not only was at Amazon, she's at ESPN for many years and has an incredible reputation and really strong relationships throughout our ecosystem and industry. So very excited to bring her on. I wouldn't say this is any way a signal that we're looking at live sports rights. That's not something that right now is on our mind. But I think she brings a number of different experiences and skill sets that will help us understand all parts of the ecosystem. And we do a lot of business with folks who own live sports rights. So having that understanding from the other side of the table, I think, will be very helpful in future opportunities that we explore and future negotiations. So very excited to bring her on, and I think she's going to bring a lot of real depth of experience as well as a unique perspective to the team.
Robert Fishman: Cool, and maybe just switching gears, can you discuss any more detail around the growth that you mentioned in increased bet frequency versus the bet size averages in 2023? And how you're prioritizing one over the other to drive the 2024 results? Thank you.
Jason Robins: We really look at both. I mean, for us, it's about how do we first engage the customer? If we have the customer engaged, that's table stakes. You can't do anything if you don't have that. So we start there, and then we really try to meet them where they're at. If they're looking for new types of bets, and that makes it more interesting than great. If they're looking to try new sports, then we try to provide that to them. And really, I think for us, it's about taking that customer and personalizing the experience, so they're sticky and they feel like it's easy and comfortable to use the app. So if you're always betting on basketball, we're going to show you basketball, but we might also show you other interesting basketball bets that we think you might find intriguing. So it's really something that I think starts with the customer. And there's all sorts of different levers that you can pull. And the important thing is not to force anything, to try to just get the right products in front of the right customers. And I think we've done a good job doing that.
Robert Fishman: Great. Thank you, guys.
Operator: Thank you. Our next question comes from Joe Stauff with SIG. Your line is open.
Joe Stauff: Thanks. Good morning. Jason, I was wondering if you could size or discuss the North Carolina opportunity. Do you see that similar to maybe in Ohio or Massachusetts, or do you see it maybe at one of the maybe smaller new state launches? And then the second question I had was, I'm wondering if you could discuss just the differences in parlay penetration, right, between the new and, say. older states? And especially with that parlay penetration being lower in the older states, how easy is that to ratchet that higher and is it reasonable that it can get to those same levels that you see in the newer states? Hopefully that makes sense.
Jason Robins: Yes, so on the first question, I mean, I think you're right, North Carolina will be similar. It's a little smaller population-wise in Ohio, but it's a top 10 state, and we expect it to be a great launch and contribute in a meaningful way. And it'll be pretty standard. I mean, at this point, our playbook's honed, so we're not going to approach North Carolina any differently, other than a few optimizations that we always make around the edges. But I think you're going to see North Carolina be a very similar state launch to the ones that you mentioned that we did last year. And as far as parlay mix, yes, you're absolutely right, newer states. I think it's always easier when you have a product that you're introducing customers to for the first time to get them to try new things and harder to get them if they've been using the product in a certain way for years to change behavior. So it's more of a grind, but the trends are absolutely continuing every single year in the oldest states that we have. From a parlay mix perspective, the trends are continuing to move in the right direction. So I think that's another one that'll just be a continuous tailwind for us over time and eventually it'll converge what we're seeing in the new states. It'll just take a little longer.
Joe Stauff: Thanks a lot.
Operator: Thank you. Our next question comes from Stephen Grambling with Morgan Stanley. Your line is open.
Stephen Grambling: Hey there, can you hear me?
Jason Robins: We can hear you.
Stephen Grambling: Excellent. Thank you. Apologies for that. So on [Jackpot] (ph), I guess 1 question. Is that going to stay a single app or be folded into the DraftKings app or both? And does the ramp to $60 million to $100 million in 2026 assume any new states get approved?
Jason Robins: So for us, a lot of the questions around branding and product were still in the early stages. But the current plan is to keep it as its own brand and app. I think they've built a strong audience and a good brand, and I think that we want to keep it, but obviously we're going to explore opportunities to integrate ecosystems, have all products available across all brands, just like we do with GNOG. And I think Jackpocket has a casino that they -- so there's a lot to do there, I think, with their brand, and we'll see how that all evolves over time, but that's the current plan. And then I'm sorry, what was the second question?
Stephen Grambling: Does the target -- as you look out to 2026 on [Multiple Speakers] including states.
Jason Robins: Yes. So no new OSB and iGaming states are included in our synergy or any other assumptions. So we're just assuming current footprint. So a lot of upside if there's more OSB and iGaming states and cross-selling more customers, we do assume that some more lottery states launch. As I noted earlier, it's a lot more seamless to launch a lottery state. You don't need to go through the legislative process. It's really more of going and working out a deal directly with the state. So I think that, that's something that we feel a lot of confidence in and if you look at their ramp over the last few years, they've launched a number of different states. And I think the hardest part really is -- because there's no legislative process. The hardest part is, one they've already solved, which is, building a technology solution that will scale and we'll be able to service multiple states and lots of customers at the same time. And of course, remember, there's already states that they're in, that are big states. I mean, Texas is a huge revenue state for them. And as we know, Texas came very close last year to passing OSB, and we're very hopeful they will this year. New York is a huge state for them. I think New York could do iGaming in the next year or so. So that's another big opportunity. So really, I think the best is yet to come. And as I said earlier, this is an asset that we believe will just continue to increase in value, because if you're a believer, which I hope we all are, that there will be more and more OSB and iGaming states, none of that is baked into any of our synergy assumptions, that's just all upside.
Stephen Grambling: That's super helpful. And maybe looping in Jason Park here on free cash flow. As we look further out, how do you generally anticipate free cash flow conversion evolving?
Jason Park: Yes. So we outlined that for 2024, the free cash flow -- the delta between adjusted EBITDA and free cash flow, net impact of CapEx, cap software plus some cumulative good guides across working capital and interest income. It's about $100 million. So that's a free cash flow yield on the adjusted EBITDA. I think about the components between adjusted EBITDA and free cash flow as being more steady over time. So as adjusted EBITDA grows, the free cash flow conversion percentage is going to go up, Stephen.
Stephen Grambling: Perfect. Thanks so much. We are going to be back in.
Jason Robins: You got it.
Operator: Thank you. Our next question comes from Bernie McTernan with Needham & Company. Your line is open.
Bernard McTernan: Great. Thanks for taking the question. Just to start, Jason, in the letter, you said 87% customer retention over a five year period on average. I think that was better than what was quoted in the Investor Day a couple of years ago. Is that true that retention is improving that much? Or the numbers not apples-to-apples?
Jason Robins: Yes, I think that is true. I mean I'm not sure if it's exactly apples to apples, I have to go back and check. But absolutely, retention is improving.
Bernard McTernan: Okay. Any drivers to call specifically.
Jason Robins: Yes. I mean I think it's largely product. That's the biggest one. I also think that you're just seeing more and more natural organic growth as customers adopt more sports and things like that, which just keeps them more sticky and active on the product. But it's really just the product advancement more than anything else. We also are constantly optimizing our CRM. So that's a big lever too. I should mention we're testing all the time and finding wins. So I think between the product improving greatly over the last couple of years and our marketing and team continuing to test and learn the biggest drivers. But there's a lot of things, right? I think our customer service has improved. We're -- I think there's so many different dimensions across the products and across the entire customer experience that have helped us improve our retention.
Bernard McTernan: Great. And I know it's early days, but just wanted to get your thoughts on [Barstool] (ph) and what that could be as a customer acquisition and retention vehicle for you guys.
Jason Robins: We're very excited about that when we worked with Barstool many times over the years and really thrilled to be working with them again. It's a partner that we know very well and I have a ton of data on. So we felt really -- I mean, this is about as good as it gets in terms of us having historical data and being able to underwrite this deal. So it's really exciting, and we believe it will be a strong performer for us.
Bernard McTernan: Great. Thanks, Jason.
Operator: Thank you. Our next question comes from Chad Beynon with Macquarie. Your line is open.
Chad Beynon: Good morning. Thanks for taking my question. With respect to the gross margin guidance improvement for 2024, should we think about the 250 basis point to 450 basis point improvement, more of just kind of a factor of the scale and the growth that you're going to have? Or are some of the, I guess, variable fees coming down and we should expect for that to continue just given some of your partnerships and what you're able to do with payment processing and the like. Thanks.
Jason Robins: Yes. I mean I think it's a number of different things that come with scale. Certainly, their discounts that come with volume and scale and things like payment processing. Also, promotional mix continues to trend down as we increase the ratio of existing to new customers. And -- those things, I think, are the largest drivers.
Jason Park: Yes, I agree. I think it's all of the above, Chad, where the improving promotional reinvestment rate due to our mix of existing versus new customers, our improving hold rate and then just ongoing optimization of our COGS vendors are all driving that improvement in gross margin rate.
Chad Beynon: Okay. Great. Thanks. And then we'll probably see the public release, at least from New York, I believe, later today. With respect to the Super Bowl outcome and kind of the hold rates there, but could you maybe give us a little preview in terms of how that fit into the Q1 guidance? How you guys did in the Super Bowl from a hold standpoint?
Jason Robins: Yes. So I think this speaks to the power of our work that we've done over the last few years to build out the same game parlay product and improve player props and really diversify the bets that despite the fact that the game outcome did not go our way at all with the cheese winning, we ended up actually holding right in line with what we thought we would from a hold rate perspective. So that was really, I think, a testament to the great work the team has done over the last few years to drive more diversified bets and more parlays.
Chad Beynon: Impressive. Thank you very much. Appreciate it.
Operator: Thank you. Our next question comes from Barry Jonas with Truist Securities. Your line is open.
Barry Jonas: Thanks. Can you talk about whole trends in iGaming? Do you think there's maybe a path to hire structural hold over time there?
Jason Robins: Yes. I think iGaming is a little bit different because it's so high frequency. It's really -- whole rate matters, of course, if you look at the math. But if you think about kind of a customer and how they behave. Most people sit and they play for some period of time, and they have a budget and I think that hold rate generally doesn't move more than 100 bps or 200 bps up or down in any given day, it's much more stable than sports hold rate because it's not outcome dependent at all. So it's always something to look at, but I think it's just a fundamentally different product. And it's same thing with like live betting and game. If somebody is betting on every play of a game, taking a super high margin doesn't necessarily make that person stick for as long as he can. So it's very different than, I think, somebody who's making one or two bets pregame or maybe they're making a lot of bets pregame, but they're getting sort of on a much longer cycle and the money isn't churning as quickly.
Barry Jonas: That makes sense. Then just a follow-up on Jackpocket. I guess, I'm trying to understand the risks to Jackpocket and the broader courier model. How do you see the potential for more states to legalize iLottery over time, which would effectively remove the need for service fees.
Jason Robins: Well, I think that the real question is, what can Jackpocket contribute to the overall lottery ecosystem. And regardless of how it evolves, I think their products, their customers are going to have a role to play. And this is something that any lottery would want, right? I mean it would certainly make any -- I would think -- I shouldn't say any. I'm sure there's some around the country that, for whatever reason don't, but it increases the lottery market and increases sales. So it should be a no-brainer, I would think, for the vast majority of state lotteries. And I think Jackpocket is very well positioned for however it evolves in iLottery and other things. I mean they have an incredible customer base, a brand. This is, I think, something that actually could be a real tailwind for them depending on how it evolves. But whether it continues to be the current model or whether it changes, I think that Jackpocket is extremely well positioned and is a very unique asset.
Chad Beynon: Thanks so much.
Jason Robins: Yes. One other thing worth noting too is, iLottery requires legislative action unlike what Jackpocket does. So I think while it could happen, it's going to be a much slower burn. And I think the ability to get the digital lottery products that Jackpocket offers up and running in a number of states quickly is just much more seamless.
Operator: Thank you. Our next question comes from Jordan Bender with Citizens JMP. Your line is open.
Jordan Bender: Great. Thanks for taking my question. So the Barstool partnership kind of highlights it seen a past years of using your marketing budget and your ad spend. Can you maybe help us think about some of the higher cost legacy partnerships that are going to roll off this year versus some of the opportunity for incremental marketing agreements like a Barstool maybe into 2024 and into 2025. And the positive ROI you might see off of those? Thank you.
Jason Robins: Sure. I mean, as you know, our relationship with ESPN ended late last year, so that is certainly one. But I wouldn't say there's like any one thing. We're constantly optimizing it out. And actually, most of our spend is not committed. Most of our spend is done through buying that we can pull in and out of at any various points of time. So there's a ton of different levers that we can pull as we think about funding different agreements. And right now, I think given sort of the pace and cadence of what we expect state launches to be in 2024 barring some big surprise. I don't think you're going to see an increase in marketing this year. It's going to be much more of a focus on deploying our dollars much more effectively. And I think Barstool is a great example of that.
Jordan Bender: Great. And then on the follow-up on Jackpocket, with CAC going down and LTVs going up, does the acquisition help your margin targets long term just for the core business, I think it's around 30% still. Like should we expect any incremental lift through this acquisition?
Jason Robins: It's a great question. At this point, we haven't dug in as much on that, but I think it's certainly something that you could see. I think that what we get with Jackpocket is the ability to acquire a lot of customers at a fraction. It's about 10% to 15% of our current customer acquisition costs. And that's something that, obviously, will provide a lot of levers for being able to optimize margin over the long run, assuming that we can continue to do that, which I have no reason to believe we can. And I think on the other side of it, being able to cross-sell, it will provide some revenue lift. We don't view this necessarily. It's more like DFS, right? DFS is a nice little product, makes money for us. But it's not something that is going to drive the massive top line growth. That's really the OSB and iGaming, and it's more of a vehicle to be able to continue to acquire customers and engage customers in states that don't have that yet. And I think Jackpocket, much like DFS, will do the same thing. And also, I think in states that do have OSB and iGaming, it will provide us another vehicle to acquire cheaply. And one of the cool things, I think, is if you look at sort of where a lot of customer acquisition happens now, it's during these big moments, whether that's the Super Bowl or March Madness coming up or any of those things. It's those big tentpole moments. And what Jackpocket does is, it creates more of those big mass, cheap customer acquisition opportunities during the year. And it could be any time, right? It could be the middle of August when there's suddenly a $1 billion jackpot and we're the only ones who are able to actually acquire in mass right before the NFL season starts. So it's those types of advantages, I think, that you're going to see really pay off over time.
Jordan Bender: Great. Thanks, Jason.
Operator: Thank you. Our next question comes from Jed Kelly with Oppenheimer & Company. Your line is open.
Jed Kelly: Hey, great, great. Thanks for taking my question. Has your structural holds improve, theoretically, you're going to be able to promote at a higher incremental gross dollar. So can you talk about what that does for retention? And then my follow-up is, we're seeing these new streaming services start to pop up. Can you talk about where the category leading gaming companies are going to be in terms of in this new streaming wave and sort of helping around the distribution. Thanks.
Jason Robins: Great question. So I think on the first one, it gives you the ability to do that. It doesn't mean we will. I think for us right now, we feel there's a lot of room to just continue to drive engagement through product and customer service and other things. But certainly having a little bit more cushion to be able to find other new sorts of promotions that works is another advantage. And doesn't necessarily mean that, that's going to be something we're looking to do. But I do think it provides an ability to do so, which is certainly an advantage over time. And then on the streaming side, I think it's early to say. There's a lot of moving parts right now. And at the same time, we know, obviously, that there's a lot of disruption going on in sports media. Obviously, we've seen a ton of disruption and have seen kind of how the evolution of non-sports media and sports is still very much right in the thick of the evolution that's occurring and it will be interesting to see how it plays out and no doubt there'll be opportunities created, and we're always looking for new partners and interesting ways that we can take advantage of any disruption happening in an adjacent market to us.
Jed Kelly: Thank you.
Operator: Thank you. Our next question comes from Brandt Montour with Barclays. Your line is open.
Brandt Montour: Hey, good morning, everybody. Thanks for taking my question. So the first one, another one on Jackpocket. I'm just thinking about the non-overlap portion of the database. I mean I think we think about lottery and think of sort of a very wide diversified range of demographic and income levels. And I'm just curious if you've done any work on the nonoverlapping piece, give us a sense on who those folks are. Is it older people? Is it men or women. And is that a richer cross-sell opportunity for iGaming or OSB in your mind? And how do you compare that?
Jason Robins: Yes, great questions. I mean, so we did a ton of work on the overall customer base and also on the general lottery market. And what we find is that, the people that are buying lottery tickets on Jackpocket, they're using mobile devices to do so. They're younger. They're a more tech-savvy customer, it's a different demographic, I think, than the average lottery customer, and that's part of why it's growing the market, which is great. So similar to kind of the online better versus the retail better, it's just -- it's a different person that's willing and also that has an iPhone and that sort of thing. And I think really, that's kind of what the appeal is, is that, this is a disruptive new thing in a market that really -- the customer wants this, right? I mean people don't buy lottery tickets today, sometimes, I think, due to convenience. And just like being able to make a bet on your phone, shooting, I mean if you look at anywhere right now that's legalized betting, online betting makes up a much larger portion of the handles than retail betting. It just makes sense when you give people a digital and mobile option that you're going to grow the market and also reach a new demographic of person. So that's really what we found when we dug in there. And I'm sorry, what was the second part of the question?
Brandt Montour: iGaming or OSB
Jason Robins: iGaming or OSB. So actually another interesting thing we saw, I had gone in thinking this was going to be much more propensity to cross-sell to iGaming this type of customer. But when we did the overlap analysis, it was actually quite similar -- the overlap between OSB customers and iGaming customers. So that gave us great confidence that -- which makes sense in some ways, right, because the overlap between iGaming and OSB and the cross-sell rates are so high. So it kind of makes sense when you think about it, but I would have gone in and probably think it would skew a little more iGaming and it was actually very similar.
Brandt Montour: That's really interesting. Thanks for that. And then maybe more on the sort of maybe competitive landscape. This is a disruptive technology service that is growing based on penetration. And I think this is the number one player in the space, but you guys mentioned that regulatory -- the regulatory structure wasn't exactly high problem. And so, maybe we wonder about barrier to entry and if that's sort of low. And so -- are there sort of second, third, fourth sort of apps out there nipping at the heels of this one? And what's the competitive landscape look like?
Jason Robins: Well, no doubt, I think there will be more. And I think what, you really have to think about is -- you're right, from a regulatory perspective, there are other -- it's not as hard. But I think that what really is hard is the technology side. It's a very complicated fulfillment process, and every state is a little bit different. So you have to build a solution that can be flexible and it's actually quite similar to what we've built in terms of our multistate regulatory structure in OSB and iGaming. But I think the added piece for them is the fulfillment, and that's very complicated to do that at scale in a cost-effective manner and have a technology system, they have patents as well on various pieces that they've created -- to have a technology system that can support rapid launch of states is not something that you can build right overnight. So no doubt there will be more competition over time, but I think these guys have a big head start. And while the barriers to entry may not be super high, I think that head start is real.
Brandt Montour: Helpful. Thanks, Jason.
Operator: Thanks you. Our next question comes from Ryan Sigdahl with Craig-Hallum Capital Group.
Ryan Sigdahl: Thanks. Good morning, guys. Just staying on Jackpocket. Curious get all the cross synergies you mentioned. But are there any features that Jackpocket has that could potentially be useful, whether it be OSB or iGaming. Thinking pool play, where they split winnings? There's an auto play feature, so on?
Jason Robins: Yes. I haven't really thought as much about that. They do have a lot of interesting things they've worked. I know they have a bingo product that were -- that they recently launched. So there could be some leverageable things there for sure. Definitely, I've thought about it more is they're building out a great lottery experience and by plugging in the iGaming experience that we've been able to build out in the OSB experience that we've been able to build out, to the lottery experience they've been able to build out. I think that's where the real power is. But there also might be -- you're right, some good nuggets there in terms of features and other things that are repurposeful across other products. So that's something that we'll have to look into a little bit more.
Ryan Sigdahl: Great. And then just as a follow-up on DFS, any early metrics and thoughts on the [Pix6] (ph) product? And then how should we think about the take rate, gross margins, et cetera, relative to your traditional DFS business?
Jason Robins: Well, that's a product we're very excited about. We haven't talked as much about it because it just launched, but it's something that we think could really reinvigorate DFS growth in a real meaningful way. Right now, we're seeing really good early signal, very strong retention numbers, good monetization. The fees that we take, they are guaranteed price pools are actually higher than the average DFS fee. So that's good, too. So a lot of things to like about that product, and I think it's something that we could really see be a meaningful contributor in the future.
Ryan Sigdahl: Thanks, Jason. Good luck, guys.
Jason Robins: Thank you.
Operator: Thank you. Our next question comes from John DeCree with CBRE. Your line is open.
John DeCree: Good morning, everyone. Thanks for taking my questions. Your covered a lot of ground, but maybe a high-level question on iGaming. So a lot of success for you over the past year. Can you talk a little bit about if we talk sports and Jackpocket. But about some of the stuff you have planned for iGaming, I think your proprietary content has been a big driver of some of your success. But as we think about 2024 and where you're going in iGaming, high level, what should we think about?
Jason Robins: Yes. I mean, first, we are just in the process of completing the migration on GNOG. So that's going to be a real exciting one and really just at the very early stages of deploying our multi-brand strategy and I think that's going to be a real tailwind for us. We also have a number of product features and new games that we're working on as well as things that we're working to increase and build out like our jackpots offering, which I think, is a real differentiator for us. So there's a lot going on in that space. We're working on a lot of new gamification stuff. There's a lot. And I think really front and center is that GNOG migration and having those products become on the same platform, I think, will allow us to really get even more leverage out of each additional feature and game that we launch.
John DeCree: Got it. Thanks. You touched on a little earlier, iGaming, your view on New York perhaps getting close and we probably feel the same way. There's quite a few bills circulating out for gaming this session. But curious if you have a view or if your team has a view on, at least directionally, over the last couple of months or quarters, if you've seen greater progress at the state legislative level or if there's maybe anything out there that people aren't thinking about it's not major headlines like New York that might be interesting over the next kind of one or two years on the iGaming regulatory front?
Jason Robins: Yes. There's a few states that I think are getting momentum on iGaming now, and it will be hard to say, but I think we're going to get at least one or two this year, if I had to guess. Some of the states, I'm hearing some momentum in include Maryland, Wyoming is one. So I think there's a few states that could consider it. I think a dark course is Illinois. Really, what I think you saw and there's kind of two things that I think are playing out here. One is, a number of different states wanted to do OSB first and see how that went, and that's still ramping for them. And so the draw for that reason of new tax revenues from online gaming isn't as strong if you just launched online sports betting and you're waiting to see how it's ramping and you're still getting more and more accustomed to and comfortable with it. The second thing is that, we talked a few years ago about post-COVID and how that was going to be a real catalyst given states would need tax revenue. What we ended up seeing was that, so much federal money was pumped into the state's coffers that that really dragged -- over the next few years, it kind of extended that time line a bit. But now that's, I think, coming to an end in many states, they're starting to see budgets that really look a lot like the budgets four or five years ago in many states and the surpluses in some of these states are no longer there. And so I think that's going to also just sort of change the dynamic in the coming years between people getting comfortable that regulatory and responsible gaming pieces that we can put in place are robust and really do a great job protecting, people understanding there actually isn't a legal online casino market, iGaming market and that much like with sports betting, disrupting that illegal market that had no consumer protections, paying no tax revenue, actually a real priority that states should have. And then, of course, the amount of programs, whether it be educational or otherwise, that the revenues can find, I think, are also going to be real catalyst behind. And it's kind of as we expected, maybe not exactly as we expected, but we thought there'd be a lot of momentum initially on OSB. I was actually pleasantly surprised as many states as they did ended up doing iGaming at the same time. And I think as OSB legislation continues to move through the states, I think you're going to see a wave of iGaming legislation start to materialize over the course of the next year or two.
John DeCree: Thanks, Jason. We agree. That's all helpful commentary. And congratulations to you and the team on a great 2023.
Jason Robins: Thank you so much. Really appreciate it.
Operator: There are no further questions at this time. I'd like to turn the call back over to Jason Robins for any closing remarks.
Jason Robins: Well, first, thank you all for joining us on today's call. Really, 2023 was an excellent year for DraftKings, and we're so excited about the opportunities in 2024 and beyond. I think 2024 is going to be even a bigger year for us. I hope everyone stays safe and well and look forward to chatting with you in the future. Thank you.
Operator: Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.
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