DraftKings Misses Q3 Revenue Estimates; Shares Slide
DraftKings reported third-quarter revenue of $1.329 billion on Thursday, November 5, up 16% from $1.144 billion a year earlier but short of what analysts were expecting. According to Benzinga data carried by Yahoo Finance, the Street consensus was $1.398 billion, and the adjusted loss of 53 cents per share was wider than the 39-cent loss analysts had forecast.
The shares fell sharply in after-hours trading. Yahoo Finance put the drop at 18.4%, to $19.20, while Investing.com reported a fall of about 20%. The company's own results release attributes the revenue growth to healthy customer engagement and a higher sportsbook net revenue margin.
The market reaction was driven less by the quarter than by the outlook. DraftKings lowered its 2026 guidance, and the reason is the money it is putting into its Predictions product.
What The Quarter Looked Like
Net loss attributable to common stockholders was $468.7 million, against a loss of $256.8 million in the third quarter of 2025. Adjusted EBITDA was a loss of $316.9 million, compared with a loss of $126.5 million a year ago.
Monthly unique payers rose about 13% to 4.1 million, and average revenue per monthly unique payer increased about 3% to $109. Sports revenue, which DraftKings defines to include online and retail sportsbook and prediction markets revenue, rose 31.5% to $783.6 million, with a net revenue margin of 5.6% against 5.2% last year. iGaming revenue grew just 2.1% to $460.9 million, and other revenue fell 12.5% to $84.5 million.
DraftKings says it is live with mobile sports betting in 27 states, Washington, D.C. and Puerto Rico, covering roughly 53% of the US population. iGaming is live in five states, about 11% of the population, and its Canadian products reach provinces representing about 51% of that country's population.
2026 Outlook Cut, 2027 Guidance Introduced
For 2026, DraftKings now expects revenue of $6.35 billion to $6.55 billion, down from a previous range of $6.5 billion to $6.9 billion, per Yahoo Finance. Adjusted EBITDA guidance is $175 million to $275 million, compared with the earlier $700 million to $900 million.
The company says the change mainly reflects increased Adjusted EBITDA investment in Predictions of $650 million to $700 million, and it expects $175 million to $225 million of that investment in the fourth quarter alone. Core-business Adjusted EBITDA for 2026 is guided at $875 million to $925 million, which the company links to a decision to invest further in iGaming growth and to modestly customer-friendly sport results.
For 2027, DraftKings is introducing revenue guidance of $7.35 billion to $7.75 billion, an increase of 17% at the midpoint, and Adjusted EBITDA guidance of $800 million to $1.0 billion. The core business is expected to bring in $6.7 billion to $7.0 billion, up 4% to 9% on the midpoint of 2026 guidance, with core Adjusted EBITDA of $1.15 billion to $1.25 billion. Predictions is guided at $650 million to $750 million of revenue next year, alongside $250 million to $350 million of Adjusted EBITDA investment.
The release also notes that Predictions revenue will be immaterial in 2026 because new-customer promotions will offset most of the gross revenue it generates.
Predictions Is Now The Story
Chief executive Jason Robins described the quarter as a pivotal moment, saying the Predictions offering is now driving meaningful growth and that more than 1.6 million customers have engaged with it so far this year. Chief financial officer Alan Ellingson said the core business generates significant free cash flow that is being used to fund Predictions at what he called attractive payback periods.
The shift puts DraftKings in a category that regulators and rivals are watching closely. Our earlier coverage looked at how fast event contracts are growing on Kalshi and Polymarket, and the same market is now a line item that moves a listed operator's guidance. DraftKings also has a record on player protection to point to, having expanded its responsible gaming tools for the NFL season.
