The quarter fell well short of published expectations. External estimates had clustered around roughly $1.54–$1.56 billion of revenue and about $0.28 of adjusted EPS, versus DraftKings’ $1.443 billion and $0.09 respectively. That makes this a clear top-line and earnings miss, not merely a noisy comparison to last year.
| Metric | Q2 2026 | Q2 2025 | Market expectation / comparison |
|---|---|---|---|
| Revenue | $1,443 million (Income Statement) | $1,513 million (Income Statement) | ~$1.54–$1.56 billion published estimates |
| Adjusted EBITDA | $115 million (Adjusted EBITDA reconciliation) | $301 million (Adjusted EBITDA reconciliation) | — |
| Adjusted diluted EPS | $0.09 (Adjusted EPS reconciliation) | $0.38 (Adjusted EPS reconciliation) | ~$0.28 published estimate |
| Sports consumer volume | $13.1 billion (Segment results — Sports) | $11.5 billion (Segment results — Sports) | — |
| Sports net revenue margin | 6.8% (Segment results — Sports) | 8.7% (Segment results — Sports) | — |
Customer activity was strong, but monetization deteriorated. Sports consumer volume rose 14.5% and monthly unique payers increased 9% to 3.6 million, yet revenue declined 4.6% because average revenue per payer fell 13% to $132 and sportsbook net revenue margin compressed to 6.8% from 8.7%. The filing attributes this to customer-friendly outcomes and heavier promotional spending, but the practical takeaway is that handle and users did not translate into revenue or profit this quarter (Key business metrics; Segment results — Sports).
The earnings miss was amplified by sharply weaker operating leverage. Adjusted EBITDA fell 62% year over year to $115 million, while GAAP operating income swung to a $68 million loss from $151 million of income. The reconciliation also shows $19.9 million of advocacy and related legal spending in the quarter, but even excluding that item, the core margin picture was materially weaker (Income Statement; Adjusted EBITDA reconciliation).
Maintaining full-year guidance prevents a deeper reset, but does not offset the quarter’s shortfall. DraftKings reiterated fiscal 2026 revenue guidance of $6.5–$6.9 billion and adjusted EBITDA guidance of $700–$900 million, unchanged from May 7, 2026 (Guidance section). That signals management views the weak second quarter as partly temporary and expects a stronger back half, helped by Predictions and the NFL season. However, the filing provides no quantitative upgrade to reflect the claimed Predictions momentum, so the unchanged outlook is a hold rather than a positive revision.
Liquidity remains adequate, though capital deployment reduced cash. Operating cash flow was $63 million for the first six months, while the company spent $154 million on share repurchases, $75 million on internally developed software, and ended with $984 million of cash and equivalents versus $1.128 billion at December 31, 2025 (Cash Flow statement; Balance Sheet). Net, the filing reads as a meaningful negative surprise: strong engagement and new-product traction were outweighed by a revenue miss, severe sportsbook margin pressure, and sharply lower profitability.
Read the original 8-K on SEC EDGAR ↗