DraftKings Inc. (DKNG) · Nov 6, 2026 · Earnings
Miss — Adjusted EPS $(0.53) vs approximately $(0.36) consensus
DraftKings earnings missed on revenue and adjusted EPS, while heavier Predictions spending drove a sharp 2026 guidance cut despite stronger core-business EBITDA.
DraftKings is trying to evolve from a sportsbook and iGaming operator into a broader event-contracts platform, using its established business to fund rapid expansion in Predictions. The shift was already part of the plan: earlier fiscal 2026 guidance called for $6.5-$6.9 billion of revenue and $700-$900 million of Adjusted EBITDA, with Predictions investment already embedded.
The quarter missed the market’s operating bar. Revenue reached $1.329 billion, up 16% year over year, but fell short of published expectations around $1.39 billion; adjusted EPS was a $0.53 loss versus consensus near a $0.36 loss. The underlying mix was uneven: Sports revenue grew 31.5%, while iGaming rose only 2.1% and Other revenue declined 12.5% (Segment results). The filing says, “For the three months ended September 30, 2026, DraftKings reported total revenue of $1,329 million, an increase of $185 million, or 16%, compared to $1,144 million during the same period in 2025.”
| Figure | Reported / guide | Prior year / prior guide | Consensus / other |
|---|---|---|---|
| Revenue (Financial Highlights) | $1.329B | $1.144B | ~$1.39B |
| Adjusted EPS (Adjusted EPS reconciliation) | $(0.53) | $(0.26) | ~$(0.36) |
| Adjusted EBITDA (Adjusted EBITDA reconciliation) | $(316.9)M | $(126.5)M | |
| FY26 revenue guide (Guidance) | $6.35-$6.55B | $6.5-$6.9B | ~$6.65B |
| FY26 Adjusted EBITDA guide (Guidance) | $175-$275M | $700-$900M | |
| FY27 revenue guide (Guidance) | $7.35-$7.75B |
The bigger issue is the scale of the investment reset. DraftKings cut fiscal 2026 revenue guidance below both its prior range and published consensus, while slashing consolidated Adjusted EBITDA guidance to $175-$275 million. The company attributes the change primarily to $650-$700 million of Predictions investment, with another $175-$225 million expected in the fourth quarter. The filing says, “DraftKings is updating its fiscal year 2026 revenue guidance range to $6.35 billion to $6.55 billion and its fiscal year 2026 Adjusted EBITDA guidance range to $175 million to $275 million.”
Core operations are better than the consolidated numbers suggest, but that does not neutralize the near-term damage. DraftKings expects fiscal 2026 core-business Adjusted EBITDA of $875-$925 million, above its old total-company range, and projects fiscal 2027 core EBITDA of $1.15-$1.25 billion. That supports the view that Sportsbook and iGaming execution remains healthy; however, the company is choosing to spend heavily before Predictions produces meaningful 2026 revenue. It says, “Predictions revenue will be immaterial in fiscal year 2026, as new customer promotions will offset the lion’s share of gross revenue generated.” 〔0〕
The new 2027 outlook makes Predictions the central test of the story. DraftKings is forecasting $650-$750 million of Predictions revenue in fiscal 2027 while still investing $250-$350 million of Adjusted EBITDA in the business. More than 1.6 million customers have engaged with the product year to date, but the filing provides an ambitious investment case rather than proof of durable profitability. 〔1〕
Bottom line: This is a clear earnings and guidance miss, not because the core sportsbook business broke down, but because DraftKings is spending far more and earning far less near term to build Predictions. The event weakens the current story until that new business demonstrates enough revenue and margin to justify the investment.
Q3 earnings call, November 6, 2026
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