DraftKings Revenue Rises 16% as Predictions Spending Grows

DraftKings reported third-quarter revenue of $1.33 billion for 2026, up 16% from $1.14 billion a year earlier, supported by stronger customer activity and a higher sportsbook net revenue margin.

Monthly unique payers increased about 13% to 4.1 million, while average revenue per payer rose 3% to $109. Sportsbook net revenue margin improved from 5.2% in Q3 2025 to 5.6%.

The company also reported an Adjusted EBITDA loss of $316.9 million. Revenue came below analysts’ expectations of about $1.39 billion, while adjusted loss per share reached $0.53 compared with expectations for a $0.25 loss.

“The third quarter marked a pivotal moment for DraftKings, as the Predictions offering we have been building is now powering meaningful growth for our business,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “More than 1.6 million customers have engaged with Predictions year-to-date, and combined with the strength of our core, we believe we are set up for an exceptional 2027.”

Predictions Spending Weighs on 2026 Outlook

DraftKings now expects full-year 2026 revenue of between $6.35 billion and $6.55 billion, with Adjusted EBITDA ranging from $175 million to $275 million.

The updated outlook reflects $650 million to $700 million in expected Adjusted EBITDA investment in Predictions. Of that amount, $175 million to $225 million is scheduled for the fourth quarter.

Management expects Predictions revenue to remain immaterial in 2026 because customer promotions will absorb most of the gross revenue generated.

The product’s annualized total trading volume reached $56.8 billion by October after growing fivefold from July. Consumer volume accounted for $10.1 billion.

DraftKings reported an 11.1% take rate and said it captured 65.6% of gross revenue. October annualized run-rate adjusted gross profit reached $350 million, with an 18% promotion rate.

“Our core business continues to generate significant free cash flow, which we are deploying to fund growth in our Predictions business at attractive payback periods,” said Alan Ellingson, DraftKings’ Chief Financial Officer, in the company’s press release. “We are introducing 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.”

DraftKings expects its core business to generate 2026 Adjusted EBITDA of between $875 million and $925 million.

Sports Revenue Leads Quarterly Growth

Sportsbook and Predictions consumer volume reached $13.9 billion during Q3, up 22% year-on-year.

Combined sports betting and Predictions revenue rose 31.5% to $784 million. DraftKings’ sportsbook is live in 27 states, Washington, D.C. and Puerto Rico.

Its win margin for the first nine months of 2026 remained at 6.7%, unchanged from the same period last year.

iGaming revenue increased 2.1% to $460.9 million in Q3. For the first nine months of 2026, online casino revenue was up 6.1%.

The quarter also included DraftKings’ launch of sportsbook and iGaming operations in Alberta. The company currently offers iGaming in five US states.

2027 Guidance Includes Larger Predictions Contribution

DraftKings expects 2027 revenue of between $7.35 billion and $7.75 billion and Adjusted EBITDA of $800 million to $1 billion.

Core revenue is projected at $6.7 billion to $7 billion, with core Adjusted EBITDA expected to reach $1.15 billion to $1.25 billion.

Predictions revenue is forecast at $650 million to $750 million next year, while planned Adjusted EBITDA investment in the product ranges from $250 million to $350 million.

The company’s Q3 operating margin was negative 37.1%, compared with negative 23.8% a year earlier. Free cash flow fell to negative $82.13 million from positive $283 million.

DraftKings shares fell 23% to $18.08 immediately after the report.