DraftKings Cuts 2026 Outlook to Fund Predictions

The Tip Desk · November 6, 2026 · 3 min read

Third-quarter revenue was $1.33 billion, up 16% from a year earlier, after a 5% year-over-year decline in the second quarter.

DraftKings Inc. (DKNG) reported third-quarter revenue of $1,329 million, up 16% from $1,144 million a year earlier, reversing a 5% year-over-year decline in the second quarter.

The digital sports and gaming company said the increase was driven primarily by continued healthy customer engagement and a higher Sportsbook net revenue margin. Sports revenue rose 31.5% to $783.6 million from $596.1 million a year earlier. Sports Consumer Volume increased 21.9% to $13.90 billion, and Sports Net Revenue Margin expanded to 5.6% from 5.2%.

iGaming revenue was $460.9 million, up 2.1% from $451.3 million a year earlier. Other revenue fell 12.5% to $84.5 million from $96.6 million.

Monthly Unique Payers increased approximately 13% to 4.1 million, after a 9% increase to 3.6 million in the second quarter. The company said the rise reflected unique payer retention and new customer acquisition across Sportsbook, iGaming and Predictions. Average Revenue per MUP increased approximately 3%, or $3, to $109, after a 13% decline, or $19, to $132 in the prior quarter, primarily due to an improvement in Sportsbook net revenue margin.

GAAP net loss attributable to common stockholders widened to $468.7 million, or $0.94 a share, from $256.8 million, or $0.52 a share, a year earlier. Adjusted EBITDA was a loss of $316.9 million, versus a loss of $126.5 million a year earlier. Sales and marketing expense rose to $605.7 million from $360.4 million.

Chief Executive Officer Jason Robins said the third quarter marked a pivotal moment as the Predictions offering began to power growth. More than 1.6 million customers had engaged with Predictions year-to-date. Chief Financial Officer Alan Ellingson said the core business continues to generate significant free cash flow, which the company is deploying to fund growth in Predictions.

DraftKings cut fiscal year 2026 revenue guidance to $6.35 billion to $6.55 billion and Adjusted EBITDA guidance to $175 million to $275 million, from the $6.5 billion to $6.9 billion revenue and $700 million to $900 million Adjusted EBITDA ranges it had maintained after the first and second quarters. The company said the update primarily reflects increased Adjusted EBITDA investment in Predictions of $650 million to $700 million, with $175 million to $225 million expected in the fourth quarter. Predictions revenue is expected to be immaterial in fiscal year 2026, as new customer promotions will offset most of the gross revenue generated.

The company expects fiscal year 2026 Adjusted EBITDA from the core business of $875 million to $925 million, which it said reflects a decision to invest further in iGaming growth as well as the impact of modestly customer-friendly sport outcomes.

DraftKings introduced fiscal year 2027 revenue guidance of $7.35 billion to $7.75 billion, an increase of 17% year-over-year at the midpoint, and Adjusted EBITDA guidance of $800 million to $1.0 billion, which includes $300 million of Adjusted EBITDA investment in Predictions at the midpoint. It expects fiscal year 2027 revenue from the core business of $6.7 billion to $7.0 billion and Adjusted EBITDA from the core business of $1.15 billion to $1.25 billion. Predictions revenue is expected at $650 million to $750 million, with Adjusted EBITDA investment in Predictions of $250 million to $350 million.

Mobile sports betting remains live in 27 states, Washington, D.C., and Puerto Rico, representing approximately 53% of the U.S. population. iGaming is live in 5 states, representing approximately 11% of the U.S. population. Sportsbook and iGaming offerings are live in provinces representing approximately 51% of the Canadian population.