DraftKings Q3 2026 Earnings Weaken on Predictions Spend
DraftKings Q3 2026 Earnings saw revenue growth but a wider adjusted-EBITDA loss after Predictions investment, narrowing 2026 outlook and pressuring flows.
KEY TAKEAWAYS
- Q3 revenue rose 16.0% to $1.3 billion, led by sportsbook margin gains and higher engagement.
- Adjusted EBITDA loss widened to $317 million as Predictions investment drove a sharp profitability decline.
- Company cut 2026 revenue and adjusted EBITDA guidance while issuing ambitious 2027 targets assuming lower investment intensity.
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DraftKings Inc. (DKNG) reported third-quarter 2026 revenue of $1.329 billion, a 16.0% increase year over year, but its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) loss widened sharply as the company increased spending on its Predictions product. On November 5, 2026, DraftKings narrowed its 2026 outlook while setting higher targets for 2027.
Revenue, Profitability, and Customer Growth
For the quarter ended September 30, 2026, DraftKings cited stronger customer engagement and an improved Sportsbook net-revenue margin as drivers of the revenue gain. Sports-related revenue, which includes online and retail sportsbooks plus prediction markets, rose 31.5% year over year to $783.6 million. The sports net-revenue margin expanded to 5.6% from 5.2% a year earlier.
Monthly unique payers increased 13.0% to 4.1 million, while average revenue per monthly unique payer rose 3.0% to $109.
Adjusted EBITDA showed a loss of $316.9 million, compared with a $126.5 million loss in the year-earlier quarter. The company attributed the wider loss primarily to increased investment in Predictions. DraftKings posted a GAAP net loss of $468.7 million, or $0.94 per diluted share, with an adjusted loss per share of $0.53.
Sales and marketing expenses climbed to $605.7 million from $360.4 million in the prior-year quarter, with most of the increase linked to Predictions-related spending.
Predictions Investment and Outlook
More than 1.6 million customers had engaged with Predictions year to date, according to the earnings-call transcript. CEO Jason Robins said, “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.”
Management expects 2026 Predictions revenue to be $650 million to $750 million on a gross basis but immaterial on a net basis because customer promotions will offset most gross revenue. The 2026 customer cohort is tracking toward a payback period of about 20 months, below the company’s two-year target.
DraftKings raised its planned 2026 adjusted-EBITDA investment in Predictions to $650 million–$700 million, including $175 million–$225 million expected in the fourth quarter. The company linked this increased spending to the quarter’s profitability decline.
The company lowered its 2026 revenue guidance to $6.35 billion–$6.55 billion and cut adjusted-EBITDA guidance to $175 million–$275 million. It also forecast core adjusted EBITDA of $875 million–$925 million for 2026.
For 2027, DraftKings issued initial guidance of $7.35 billion–$7.75 billion in revenue and $800 million–$1.0 billion in adjusted EBITDA. This outlook assumes a reduction in investment intensity, significant gross-profit contribution from customers acquired in 2026, and includes $250 million–$350 million of adjusted-EBITDA Predictions investment.
The company filed a Form 8-K dated November 6, 2026, incorporating the November 5 earnings release as Exhibit 99.1.
