TLDR
- DraftKings stock fell 25% after hours Thursday to $17.60.
- Q3 revenue of $1.33 billion missed estimates, and the loss was wider than expected.
- The 2026 revenue outlook dropped to $6.45 billion from $6.7 billion.
- Spending on the Predictions exchange drove the lower outlook.
- Sportsbook revenue grew 36%, and the stock was down 20% premarket Friday.
DraftKings (DKNG) stock sank 25% in after-hours trading Thursday, landing at $17.60. The drop came after the company cut its 2026 revenue outlook alongside third-quarter results.
That price sits close to the 52-week low of $18.35. It also erased much of a recent run.
The company posted a loss of 94 cents per share on revenue of $1.33 billion. FactSet analysts had expected a loss of 41 cents and revenue of $1.39 billion.
On an adjusted basis, the loss was 53 cents, against an estimate of 36 cents. Revenue still grew 16% from a year ago.
Management now sees full-year revenue of $6.45 billion, the midpoint of a $6.35 billion to $6.55 billion range. Last quarter, it held that figure at $6.7 billion.
Analysts had been looking for about $6.65 billion. The 2027 adjusted EBITDA outlook of $800 million to $1 billion also trailed the roughly $1.12 billion they expected.
The Predictions Price Tag
DraftKings is spending heavily on its Predictions exchange. Adjusted EBITDA expenses for that segment are projected at $650 million to $700 million this year.
Third-quarter adjusted EBITDA was a loss of $316.9 million. A year earlier, the loss was $126.5 million.
CEO Jason Robins called DraftKings the clear number three predictions exchange by total volume. Kalshi and Polymarket sit ahead of it.
He expects $700 million in predictions revenue next year. For 2026, he said it will be “immaterial” because new customer promotions will absorb most of it.
The company writes its own event contracts and owns the exchange they trade on. Flutter, the parent of FanDuel, uses contracts from Crypto.com.
Robins said non-sports contracts, especially crypto-linked ones, have driven much of the growth. New-customer sign-ups rose 13% year over year.
What Held Up Before the Sell-Off
Net sportsbook revenue rose 36% from a year earlier. iGaming revenue rose 7%.
iGaming is live in five states, compared with 29 for mobile sports betting. It still produced 35% of quarterly revenue.
The stock had climbed about 20% in the six weeks before the report. Investing.com tied that run to election results in Texas and hopes for lighter regulation.
The Supreme Court has been asked to review a dispute over oversight of sports event contracts. Freedom Capital Markets analyst Nick McKay wrote that a ban would let the sportsbook business flourish again.
Robins closed his shareholder letter with the line, “We have never had more ways to win.” In premarket trading Friday, DraftKings stock was down 20%.
