DraftKings — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the three months ended September 30, 2026, was $1,329 million, an increase of 16% year-over-year compared to $1,144 million in the same period in 2025.
• Total revenue for the nine months ended September 30, 2026, was $4,418 million, an increase of 9% year-over-year compared to $4,065 million in the same period in 2025.
• Sports revenue for the three months ended September 30, 2026, was $784 million, up 31.5% year-over-year; Sports Net Revenue Margin was 5.6% compared to 5.2% in 2025.
• iGaming revenue for the three months ended September 30, 2026, was $461 million, up 2.1% year-over-year.
• Other revenue for the three months ended September 30, 2026, was $85 million, down 12.5% year-over-year.
• Net loss attributable to common stockholders for the three months ended September 30, 2026, was $469 million, compared to a loss of $257 million in 2025.
• Net loss attributable to common stockholders for the nine months ended September 30, 2026, was $515 million, compared to a loss of $133 million in 2025.
• Adjusted EBITDA for the three months ended September 30, 2026, was a loss of $317 million, compared to a loss of $126 million in 2025.
• Adjusted EBITDA for the nine months ended September 30, 2026, was a loss of $34 million, compared to a profit of $277 million in 2025.
• Cash and cash equivalents were $1,101 million as of September 30, 2026, down from $1,128 million as of December 31, 2025.
• Total liabilities were $4,432 million as of September 30, 2026, up from $3,900 million as of December 31, 2025.
• Convertible notes, net of issuance costs, were $942 million as of September 30, 2026, down from $1,259 million as of December 31, 2025.
• Term B Loans, net of issuance costs, were $1,251 million as of September 30, 2026, up from $577 million as of December 31, 2025.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $63 million, compared to $342 million in 2025.
• Net cash used in investing activities for the nine months ended September 30, 2026, was $177 million, compared to $116 million in 2025.
• Net cash provided by financing activities for the nine months ended September 30, 2026, was $179 million, compared to $152 million in 2025.
• Stock-based compensation for the nine months ended September 30, 2026, was $234 million, compared to $236 million in 2025.

Guidance and Future Outlook:

• Fiscal year 2026 revenue guidance is updated to a range of $6.35 billion to $6.55 billion.
• Fiscal year 2026 Adjusted EBITDA guidance is updated to a range of $175 million to $275 million, reflecting an Adjusted EBITDA investment in Predictions of $650 million to $700 million.
• Fiscal year 2026 core business Adjusted EBITDA is expected to be $875 million to $925 million.
• Fiscal year 2026 Predictions revenue is expected to be immaterial as new customer promotions will offset gross revenue.
• Fiscal year 2026 Adjusted EBITDA investment in Predictions is expected to be $175 million to $225 million in the fourth quarter.
• Fiscal year 2027 revenue guidance is introduced at $7.35 billion to $7.75 billion, representing a 17% year-over-year increase at the midpoint.
• Fiscal year 2027 Adjusted EBITDA guidance is introduced at $800 million to $1.0 billion, including $300 million of Adjusted EBITDA investment in Predictions at the midpoint.
• Fiscal year 2027 core business revenue is expected to be $6.7 billion to $7.0 billion, an increase of 4% to 9% year-over-year compared to the midpoint of fiscal year 2026 guidance.
• Fiscal year 2027 core business Adjusted EBITDA is expected to be $1.15 billion to $1.25 billion.
• Fiscal year 2027 Predictions revenue is expected to be $650 million to $750 million.
• Fiscal year 2027 Adjusted EBITDA investment in Predictions is expected to be $250 million to $350 million.

Business Segments and Product Lines:

• Monthly Unique Payers (MUPs) increased approximately 13% to 4.1 million in the three months ended September 30, 2026, compared to the same period in 2025.
• Average Revenue per MUP (ARPMUP) increased approximately 3% to $109 in the three months ended September 30, 2026, compared to $106 in 2025.
• The Predictions offering has engaged more than 1.6 million customers year-to-date.
• DraftKings is live with mobile sports betting in 27 states, Washington, D.C., and Puerto Rico, representing approximately 53% of the U.S. population.
• DraftKings is live with iGaming in 5 states, representing approximately 11% of the U.S. population.
• DraftKings is live with Sportsbook and iGaming offerings in Canadian provinces representing approximately 51% of the Canadian population.
• DraftKings owns Jackpocket, the leading digital lottery courier app in the United States.
• DraftKings owns and operates DraftKings Network, a multi-platform content ecosystem.

Market and Competitive Landscape:

• DraftKings is the only U.S.-based vertically integrated sports betting operator.
• DraftKings is an official sports betting and daily fantasy partner of the NHL, PGA TOUR, and WNBA.
• DraftKings is an official daily fantasy partner of NASCAR, an official sports betting partner of the NBA, and an authorized gaming operator of MLB.
• DraftKings' daily fantasy sports platform is available in 44 states, Washington, D.C., and certain Canadian provinces.
• DraftKings' wholly-owned subsidiary GUS III LLC operates DraftKings Predictions, offering federally regulated event contracts under CFTC oversight.

Risks and Challenges:

• Risks include the ability to manage growth and execute business plans, including growth in the prediction markets category.
• Potential litigation involving DraftKings is a stated risk.
• Changes in applicable laws or regulations, particularly regarding gaming and the regulatory status of prediction markets and event contracts, pose risks.
• General economic and market conditions impacting demand for offerings are a risk factor.
• Risks related to tariffs, import/export, trade restrictions, inflation, rising interest rates, and banking system instability are noted.
• The company notes that actual results could differ materially from forward-looking statements due to known and unknown risks.

Management Commentary and Tone:

• CEO Jason Robins stated that the third quarter marked a pivotal moment with the Predictions offering powering meaningful growth.
• Management believes the combination of the core business strength and Predictions sets the company up for an exceptional 2027.
• CFO Alan Ellingson noted that the core business continues to generate significant free cash flow, which is being deployed to fund growth in the Predictions business at attractive payback periods.

Other Key Points:

• DraftKings repurchased convertible notes for $300 million during the nine months ended September 30, 2026.
• The company purchased treasury stock under its Stock Repurchase Program for $154 million during the nine months ended September 30, 2026.
• The company purchased treasury stock for RSU withholding for $62 million during the nine months ended September 30, 2026.
• Proceeds from Term B Loans, net, were $688 million during the nine months ended September 30, 2026.
• Cash paid for internally developed software costs was $113 million during the nine months ended September 30, 2026.
• Shares issued for contingent consideration were $15 million during the nine months ended September 30, 2026.
• Stock-based compensation capitalized to internally developed software costs was $19 million during the nine months ended September 30, 2026.
• The company hosts a conference call and audio webcast on November 6, 2026, to discuss results.
• The non-GAAP effective tax rate used for Adjusted Earnings Per Share calculations is 27% as of the third quarter of 2026.