DraftKings Inc. Q3 2026 Earnings Recap

DraftKings fell 21.3% after earnings, with the clearest likely pressure point being the increased 2026 investment in predictions: management raised the expected spend to $650 million–$700 million while forecasting only $800 million–$1 billion in 2027 adjusted EBITDA. The outlook depends on predictions growth and future payback, despite continued growth in the core business.

Key Takeaways

• Third-quarter revenue increased 16% year-over-year; monthly unique payers rose 13% and sports consumer volume rose 22%.
• Management increased its 2026 adjusted EBITDA investment in predictions to $650 million–$700 million, and expects that investment to step down to $300 million at the midpoint in 2027.
• For fiscal 2027, DraftKings expects revenue growth of 17% at the midpoint and adjusted EBITDA of $800 million–$1 billion; it projects $700 million of predictions revenue and $1.2 billion of core adjusted EBITDA, both at the midpoint.
• Sportsbook net revenue grew 36% year-over-year, with net revenue margin up about 120 basis points to 6.4%; handle growth was 12%.
• Predictions engagement is scaling: more than 1.6 million customers have used the offering year to date, and October annualized consumer volume reached $10.1 billion. Management says the 2026 cohort is running at about $350 million in annualized gross profit and expects it to pay back in approximately 20 months.