DraftKings — Third Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for the three months ended September 30, 2026, was $1,329.1 million, an increase of 16% (or $185 million) compared to $1,144.0 million in the same period in 2025.
• Revenue for the nine months ended September 30, 2026, was $4,418.4 million, an increase of 8.7% compared to $4,065.3 million in 2025.
• GAAP net loss for the three months ended September 30, 2026, was $468.7 million ($0.94 per share), compared to a net loss of $256.8 million ($0.52 per share) in 2025.
• GAAP net loss for the nine months ended September 30, 2026, was $515.3 million ($1.04 per share), compared to a net loss of $132.7 million ($0.27 per share) in 2025.
• Adjusted EBITDA for the three months ended September 30, 2026, was a loss of $316.9 million, compared to a loss of $126.5 million in 2025.
• Adjusted EBITDA for the nine months ended September 30, 2026, was a loss of $34.4 million, compared to income of $276.8 million in 2025.
• Sports Consumer Volume increased 21.9% year-over-year to $13.9 billion for the quarter.
• Sports Revenue increased 31.5% year-over-year to $783.6 million for the quarter, with Sports Net Revenue Margin improving to 5.6% from 5.2% in 2025.
• iGaming Revenue increased 2.1% year-over-year to $460.9 million for the quarter.
• Monthly Unique Payers (MUPs) increased approximately 13% to 4.1 million for the quarter ended September 30, 2026.
• Average Revenue per MUP (ARPMUP) increased approximately 3% to $109 for the quarter ended September 30, 2026.
• Cash and cash equivalents were $1,100.9 million as of September 30, 2026, down from $1,127.5 million as of December 31, 2025.
• Total liabilities were $4,431.8 million as of September 30, 2026, compared to $3,899.3 million as of December 31, 2025.
• Convertible notes, net, were $942.1 million as of September 30, 2026, down from $1,259.1 million as of December 31, 2025.
• Term B Loans, net, were $1,251.3 million as of September 30, 2026, up from $576.5 million as of December 31, 2025.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $63.0 million, compared to $342.4 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.
• Fiscal Year 2026 Adjusted EBITDA investment in Predictions is expected to be $650 million to $700 million.
• Fiscal Year 2026 Adjusted EBITDA from the core business is expected to be $875 million to $925 million.
• 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.
• Fiscal Year 2027 core business revenue is expected to be $6.7 billion to $7.0 billion, a 4% to 9% increase year-over-year compared to the FY2026 midpoint.
• 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.
• Fiscal Year 2026 fourth quarter Adjusted EBITDA investment in Predictions is expected to be $175 million to $225 million.

Business Segments and Product Lines

• The Predictions offering is driving meaningful growth, with more than 1.6 million customers engaging year-to-date.
• Predictions revenue is expected to be immaterial in fiscal year 2026 as new customer promotions offset the majority of gross revenue.
• DraftKings is live with mobile sports betting in 27 states, Washington, D.C., and Puerto Rico, covering approximately 53% of the U.S. population.
• DraftKings is live with iGaming in 5 states, covering 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.
• The company is investing further in iGaming growth.

Market and Competitive Landscape

• The company describes itself as 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, and an official daily fantasy partner of NASCAR.
• DraftKings is an official sports betting partner of the NBA and an authorized gaming operator of MLB.
• DraftKings owns Jackpocket, the leading digital lottery courier app in the United States.
• DraftKings owns and operates DraftKings Network, a multi-platform content ecosystem.

Risks and Challenges

• Risks include the ability to manage growth and execute business plans, including growth in the prediction markets category.
• Potential litigation involving the company is a stated risk.
• Changes in applicable laws or regulations, particularly regarding gaming and the regulatory status of prediction markets and event contracts, are cited as risks.
• General economic and market conditions impacting demand for offerings are noted as potential risks.
• Risks related to tariffs, import/export, trade restrictions, inflation, rising interest rates, and banking system instability are identified.

Management Commentary and Tone

• CEO Jason Robins stated the third quarter marked a "pivotal moment" for the company, citing the Predictions offering as a driver of meaningful growth.
• Management expressed confidence that the company is "set up for an exceptional 2027."
• CFO Alan Ellingson noted 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

• The company repurchased convertible notes for $300.4 million during the nine months ended September 30, 2026.
• The company purchased treasury stock under its Stock Repurchase Program for $154.2 million during the nine months ended September 30, 2026.
• The company incurred $12.8 million in advocacy and other related legal expenses for the three months ended September 30, 2026, primarily related to legislative efforts for legalizing iGaming and supporting ballot measures.
• The company capitalized $19.2 million in stock-based compensation to internally developed software costs during the nine months ended September 30, 2026.
• The company recognized a gain on the repurchase of convertible notes of $18.6 million during the nine months ended September 30, 2026.
• Shares issued for contingent consideration totaled $14.6 million during the nine months ended September 30, 2026.