DraftKings Revenue Dips in Q2 as Bettors’ Wins Cut Into Sportsbook Margin

DraftKings (DKNG ) closed its second quarter with a pair of numbers pointing in opposite directions: customers wagered $13.1 billion through its Sportsbook and Predictions products in the three months ended June 30, 2026, up 15% year over year, while revenue fell 5% to $1,443 million from $1,513 million. In its second quarter earnings release, published August 6, 2026, the company attributed the decline to customer-friendly sport outcomes and heavier promotional spending tied to new customer acquisition on both offerings.

The GAAP bottom line swung to a net loss of $67.6 million, or $0.14 per diluted share, against net income of $157.9 million in the same quarter of 2025. Adjusted EBITDA, the company’s preferred measure, which strips out stock-based compensation, depreciation, and items it classifies as non-recurring, landed at $114.6 million, down from $300.6 million a year earlier. Sales and marketing expense rose to $322.5 million from $233.2 million, and the reconciliation shows $19.9 million in advocacy and legal spending in the quarter, which the release describes as work on iGaming legalization and a sportsbook ballot measure.

Even so, the company held its full-year outlook. “Our core business remains on track to generate approximately $1 billion of Adjusted EBITDA this year, providing us with financial flexibility to invest behind the significant opportunity that we are seeing in Predictions,” said Alan Ellingson, DraftKings’ Chief Financial Officer, in the release. The guidance ranges, $6.5 billion to $6.9 billion of revenue and $700 million to $900 million of Adjusted EBITDA for fiscal 2026, are unchanged from what the company set on May 7, 2026.

DraftKings’ quarter by the numbers

• Sports Consumer Volume: $13.1 billion, up 15% from $11.5 billion in Q2 2025
• Revenue: $1,443 million, down 5% from $1,513 million
• Sports net revenue margin: 6.8%, down from 8.7%
• Sports revenue: $891.9 million, down 10.6%
• iGaming revenue: $461.9 million, up 7.5%
• Monthly Unique Payers: 3.6 million, up approximately 9%
• Average revenue per monthly unique payer: $132, down approximately 13%
• Adjusted EBITDA: $114.6 million, down from $300.6 million
• Net loss: $67.6 million ($0.14 per diluted share), versus $157.9 million net income a year earlier
• First-half revenue: $3,089 million, up 5.8% from $2,921 million

How customer-friendly outcomes turn handle growth into a revenue decline

The release’s own definitions tie the whole quarter together. Sports Consumer Volume is the total of settled customer wagers and trades across Sportsbook and Predictions; Sports Revenue is what those wagers produce for the house; the margin between them is the net revenue margin, which fell to 6.8% from 8.7%. When favorites cover, the operator pays out more of the pool, and a quarter can post record volume alongside falling revenue. That is the arithmetic DraftKings reported: 15% more money wagered, nearly two percentage points less of it kept, before the added cost of the promotions driving that new volume.

The per-customer metrics move the same way. Payers rose 9% to 3.6 million, with the release crediting retention in the Sportsbook and acquisition from Predictions, which launched in December 2025, while average revenue per payer fell 13% to $132. New customers recruited on promotions bet before they pay off, and the release assigns the drop to the same two forces: outcomes and promotional reinvestment.

DraftKings’ first half, and where Predictions fits

The second quarter breaks a profitable run. DraftKings reported net income of $21.1 million on revenue of $1,646 million in the first quarter of 2026, driven it said by efficient customer acquisition, healthy engagement, and higher Sportsbook net revenue margin. One quarter later the same factor runs the other direction: the two quarters together leave the company with a first-half net loss of $46.5 million on revenue up 5.8%.

Predictions sits inside the new volume line for the first time. The product, event contracts traded under federal commodities oversight, launched in December 2025, and the company has folded its trades into Sports Consumer Volume, which in prior years measured sportsbook handle alone. Chief Executive Officer Jason Robins said in the release that Predictions “is already growing faster than we anticipated,” and that the company aims to “win the category this NFL season.” The promotional spend behind that push, and behind the Sportsbook acquisition the company credits for its payer growth, is a stated driver of the revenue decline. The competitive stakes around that category are rising across the industry: IG Group agreed to buy rival Underdog in a $1.3 billion deal in July 2026, and BetMGM has pushed back its profit target as prediction markets pressure the incumbents’ economics.

The footprint numbers in the release are unchanged in kind: mobile sports betting live in 27 states, Washington, D.C., and Puerto Rico, covering approximately 53% of the U.S. population; iGaming in 5 states covering approximately 11%; and, following the Alberta launch, sportsbook and iGaming in Canadian provinces representing approximately 51% of the country’s population.

What comes next for DraftKings

Management takes questions on the results in a conference call and audio webcast on August 7, 2026, from 8:30 a.m. to 9:15 a.m. ET, with the replay available on the company’s investor relations site through September 30, 2026. The quarterly report on Form 10-Q, which carries the full note detail behind the condensed statements, will post alongside the call materials. The fiscal 2026 guidance the company maintained, $6.5 billion to $6.9 billion of revenue and $700 million to $900 million of Adjusted EBITDA, has now been maintained in both of this year’s earnings releases.