Draftkings Stock Earnings Reports

DraftKings reported Q3 2025 revenue of $1.144 billion (up 4% YoY) and negative $127 million adjusted EBITDA. Management lowered FY2025 guidance to revenue of $5.9B–$6.1B and adjusted EBITDA of $450M–$550M (previously $6.2B–$6.4B revenue and $800M–$900M adj. EBITDA). The revision is driven primarily by pronounced customer‑friendly sports outcomes in Sept/Oct that reduced revenue by an estimated >$300M, partially offsetting a very strong Q2 that benefited from favorable outcomes. Despite the guidance cut, management emphasized accelerating underlying metrics: Sportsbook handle and engagement growth (NFL handle +13% season‑to‑date; NBA +19% S2D), parlay mix surging (up ~800–1,000 bps Y/Y for NFL/NBA), October sportsbook handle +17% YoY, and iGaming net revenue growth accelerating to +25% YoY in Q3. Strategic positives include new exclusive marketing partnerships with ESPN and NBCUniversal, upcoming Spanish‑language app functionality ahead of the 2026 World Cup, the planned launch of “DraftKings predictions” into many non‑OSB states (viewed as incremental TAM), and an increased share repurchase authorization (program raised from $1B to $2B; 9.3M shares repurchased to date). Management reiterated that sport outcome variance is cyclical and should normalize over time, and they will be measured and data‑driven in rolling out prediction markets (shorter payback expectations vs OSB/iGaming). Key investor considerations: (1) near‑term volatility from sport outcomes can materially swing quarter results, (2) core operating metrics and margins are improving due to bet mix and product engagement, (3) new media partnerships and product launches could be substantial long‑term growth drivers, and (4) prediction markets introduce incremental opportunity but also regulatory/monetization uncertainty—management plans conservative, analytics‑driven investment.