DraftKings Quarterly Loss Widens Despite Sports-Led Revenue Growth

DraftKings reported on November 5, 2026, that revenue for the three months ended September 30, 2026 rose 16% to $1.329 billion, while its net loss attributable to common stockholders widened to $468.7 million from $256.8 million. The operator also increased its planned Predictions investment, making the business central to its updated 2026 guidance and inaugural 2027 outlook.

Sports Revenue Leads as Losses Widen

DraftKings attributed the $185 million revenue increase from $1.144 billion primarily to continued healthy customer engagement and a higher Sportsbook net revenue margin. Sports Revenue, covering online sportsbook, retail sportsbook and prediction markets, rose 31.5% to $783.6 million. iGaming revenue increased 2.1% to $460.9 million, while Other Revenue fell 12.5% to $84.5 million, leaving Sports as the clear driver of the quarter’s expansion.

Sports Consumer Volume, defined as settled customer wagers and trades excluding market-maker volume on prediction markets, increased 21.9% to $13.9 billion. Sports Net Revenue Margin improved to 5.6% from 5.2%, allowing Sports Revenue to grow faster than settled customer activity. Monthly Unique Payers rose approximately 13% to 4.1 million, and Average Revenue per MUP increased approximately 3%, or $3, to $109.

DraftKings linked the payer increase to retention and new-customer acquisition across Sportsbook, iGaming and Predictions, and the higher average revenue primarily to the improved Sportsbook margin. Those gains did not prevent a deeper operating loss of $493.1 million, compared with $271.9 million a year earlier. Basic and diluted loss per share increased to $0.94 from $0.52.

Sales and marketing expense climbed to $605.7 million from $360.4 million. The resulting $245.3 million increase, calculated from those reported figures, exceeded the quarter’s $185 million revenue gain and helps explain why stronger sales coincided with a deeper loss. Adjusted EBITDA was a loss of $316.9 million, versus a $126.5 million loss a year earlier. DraftKings defines that measure as net income or loss before interest, taxes, depreciation and amortization, with further adjustments including stock-based compensation and specified legal and non-operating items.

Predictions Reshapes Both Outlooks

Chief executive Jason Robins said more than 1.6 million customers had engaged with Predictions during 2026. “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,” he said.

DraftKings now expects fiscal 2026 revenue of $6.35 billion to $6.55 billion and Adjusted EBITDA of $175 million to $275 million. The revision primarily reflects an increased Predictions Adjusted EBITDA investment of $650 million to $700 million, including $175 million to $225 million planned for the fourth quarter. Core-business Adjusted EBITDA is forecast at $875 million to $925 million, reflecting further iGaming investment and modestly customer-friendly sports outcomes.

Predictions revenue is expected to be immaterial in 2026 because new-customer promotions will offset most of the gross revenue generated. Chief Financial Officer Alan Ellingson said the core business continues to generate significant free cash flow, which DraftKings is deploying to fund Predictions at what he described as attractive payback periods.

For fiscal 2027, DraftKings introduced revenue guidance of $7.35 billion to $7.75 billion and Adjusted EBITDA guidance of $800 million to $1.0 billion. The revenue range represents 17% year-over-year growth at the midpoint and includes $300 million of Predictions Adjusted EBITDA investment at the midpoint.

Within that outlook, core-business revenue is forecast at $6.7 billion to $7.0 billion, with core Adjusted EBITDA of $1.15 billion to $1.25 billion. Predictions is expected to contribute $650 million to $750 million of revenue, alongside a $250 million to $350 million Adjusted EBITDA investment.

The two outlooks establish the financial trade-off: Predictions is expected to move from immaterial revenue in 2026 to a substantial contributor in 2027, while its guided investment range falls below its 2026 range. The central test is whether Predictions can convert early engagement into material reported revenue while its investment burden declines, allowing the core business’s larger Adjusted EBITDA contribution to flow through to the group result.