DKNG

DraftKings’ second quarter results were met with a positive market reaction, despite missing Wall Street’s revenue and profit expectations. Management attributed the performance to a sharp increase in customer acquisition—driven by major sporting events like the NBA Finals and the World Cup—and robust engagement on the new Predictions product. CEO Jason Robins noted, “Customer acquisition grew nearly 75% year-over-year as interest in the NBA Finals and the World Cup surged,” emphasizing that these new users are expected to generate value for years to come. The company also cited improved customer acquisition efficiency and ongoing cost management as contributing factors. Is now the time to buy DKNG? Find out in our full research report (it’s free). Revenue: $1.44 billion vs analyst estimates of $1.51 billion (4.6% year-on-year decline, 4.5% miss) Adjusted EPS: $0.09 vs analyst expectations of $0.19 (53.1% miss) Adjusted EBITDA: $114.6 million vs analyst estimates of $164.4 million (7.9% margin, 30.3% miss) The company reconfirmed its revenue guidance for the full year of $6.7 billion at the midpoint EBITDA guidance for the full year is $800 million at the midpoint, above analyst estimates of $740.7 million Operating Margin: -4.7%, down from 10% in the same quarter last year Monthly Unique Payers: 3.6 million, up 300,000 year on year Market Capitalization: $12.66 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Stephen Grambling (Morgan Stanley) asked about customer overlap and cannibalization between Predictions and Sportsbook. CEO Jason Robins emphasized that overlap is minimal and that Predictions attracts a distinct customer base, particularly in states without regulated sportsbook options. Daniel Politzer (JPMorgan) questioned the impact of increased promotional spend by competitors. Robins responded that DraftKings continues to be more efficient with promotions and does not perceive a significant shift in the competitive environment. David Katz (Jefferies) probed the profitability arc of Predictions customers and the shift to DraftKings’ in-house exchange. Robins explained that vertical integration is expected to improve unit economics and that volume will increasingly be routed through the company’s own platform. Jordan Bender (Citizens) asked about cross-sell dynamics from other verticals into Predictions. Robins noted that the company’s cross-sell capabilities have improved and that early data shows similar or better rates compared to previous product launches. Shaun Kelley (Bank of America) inquired about future marketing investment flexibility if customer acquisition remains strong. Robins confirmed that DraftKings will continue to be data-driven and may increase spend when returns justify it. In upcoming quarters, the StockStory team will monitor (1) the pace of customer adoption and engagement in the Predictions product, especially as NFL season approaches, (2) progress in shifting volume to the DK Exchange platform and resulting margin improvements, and (3) stabilization in core business growth despite external promotional and regulatory pressures. Product innovation and rollout efficiency will also be key signposts for execution. DraftKings currently trades at $25.47, up from $22.17 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 8:30 a.m. ET Vice President of Finance - Matthew Rappaport Chief Executive Officer and Co-Founder - Jason Robins Chief Financial Officer - Alan Ellingson Operator: Hello, everyone. Thank you for joining us, and welcome to the DraftKings Second Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Matt Rappaport, Vice President of Finance. Please go ahead. Matthew Rappaport: Good morning, everyone, and thank you for joining us today. Certain statements we make during this call may constitute forward-looking statements that are subject to risks, uncertainties and other factors as discussed further in our SEC filings that could cause our actual results to differ materially from our historical results or from our forecast. We assume no responsibility to update forward-looking statements other than as required by law. During this call, management will also discuss certain non-GAAP financial measures that we believe may be useful in evaluating DraftKings' operating performance. These measures should not be considered in isolation or as a substitute for DraftKings' financial results prepared in accordance with GAAP. Reconciliation of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, slide presentation and business update, which can be found on our website and in our quarterly report on Form 10-Q filed with the SEC. Hosting the call today, we have Jason Robins, Chief Executive Officer and Co-Founder of DraftKings, who will share some opening remarks and an update on our business. Following Jason's remarks, our Chief Financial Officer, Alan Ellingson, will provide a review of our financials. We will then open the line to questions. I will now turn the call over to Jason Robins. Jason Robins: Thank you, Matt. Good morning, everyone, and thank you all for joining. We had a fantastic second quarter. Our core business continues to grow and is generating significant free cash flow, and our newly launched Predictions offering is growing faster than we anticipated. We are executing on the Super App strategy that we laid out at our Investor Day in March, and we are seeing massive new customer acquisition in states without regulated Sportsbook. We generated $115 million of adjusted EBITDA in the quarter, which would have been even better if not for the customer-friendly sport outcomes and our higher-than-expected customer acquisition. Strong retention and engagement of our newly acquired customers, along with Sportsbook friendly World Cup outcomes in July have been a positive tailwind so far in the third quarter. Our core business is in an even stronger place as a result and is on track to generate approximately $1 billion of adjusted EBITDA in 2026. Our confidence in our ability to win in Predictions has only grown. After including our expected investment in Predictions, we are maintaining our fiscal year 2026 revenue guidance range of $6.5 billion to $6.9 billion and adjusted EBITDA guidance range of $700 million to $900 million. Let me start with company-wide metrics. Customer acquisition, retention and engagement all exceeded our expectations in the second quarter. Customer acquisition grew nearly 75% year-over-year as interest in the NBA Finals and the World Cup surged. Notably, in the second quarter, we achieved our best enterprise-wide customer acquisition cost since the first quarter 2025. We acquired roughly 30% more customers in this quarter than we had planned, and we leaned in, investing about 10% more in customer acquisition spend as we saw the data and captured that incremental demand. Even with that investment, underlying customer acquisition costs came in approximately 25% better than we anticipated. We view this as a pull forward of acquisition and an optimized use of investment. In the second quarter, monthly unique payers growth accelerated to 9% year-over-year, and more than 6% when excluding World Cup only customers. Sports consumer volume, which includes Sportsbook handle plus Predictions consumer volume, increased 15% year-over-year in the second quarter. It is clear that our Super App rollout is already paying dividends. While we have all seen the amazing social content showing global World Cup fans traveling to North America for the tournament, it is important to note that 100% of our new customers are North America-based, and we expect them to generate gross profit for years to come. Spanish language availability within our app also proved popular and helped us reach new customer segments. We will upgrade our Super App again in August and expect to have the best offering across our main verticals, including Predictions this NFL season. We are on offense. The core business is firing. Sportsbook handle increased 11% year-over-year in the second quarter while parlay handle mix continued to rise. For the third consecutive quarter, our handle share across Sportsbook states improved year-over-year. When normalizing for sport outcomes and customer acquisition, revenue increased 10% year-over-year in the second quarter. On a trailing 12-month basis, net revenue per unique customer grew 14% year-over-year in the first half of 2026, a view that smooths the timing of customer acquisition and reflects the durable growth in revenue we generate from each customer. Our data is also confirming that there is no discernible impact from prediction markets on our Sportsbook revenue. We continue to see only about 1% customer overlap between our Sportsbook and the largest prediction market operator in Sportsbook states, which tells us these platforms are drawing a fundamentally different and largely professional audience. Based on internal analysis, we estimate that 80% to 90% of prediction market consumer volume in Sportsbook states comes from professional betting syndicates and institutional traders, which is volume that mostly would not have been on Sportsbook to begin with. This continues to strengthen our confidence that Predictions is a large and incremental opportunity. Lastly, our strong core performance was matched on the cost side. We operated with discipline in the quarter, and cost management will continue to be a major focus for the company going forward. We have confidence in the underlying earnings power and free cash flow generation of the business. Now diving deeper into Predictions. Let me start with the customer. DraftKings Sports is now live nationwide, housing all of our customer offerings under a single app umbrella, which is proving to be a significant accelerator to our business. Over 600,000 customers have engaged with our Predictions offering year-to-date. The pace of adoption has far surpassed our expectations, and we are acquiring these customers at attractive customer acquisition costs, well below what we invest to acquire Sportsbook customers. Early data on volume per customer and month-over-month retention is similar to a Sportsbook customer, which is what we expected. More than half of our Predictions customers have engaged with combos, and combos are already approaching 20% of Predictions consumer volume. As a result of strong acquisition, retention and engagement, we are seeing rapid volume growth. From April to July, our annualized total volume traded grew nearly 5x from $2.3 billion to $11 billion. This is only the beginning, and we expect to build on this momentum as we improve our offering. That engagement starts with our offering, which we expect to be best-in-class this NFL season. We are building on more than a decade of experience across Sportsbook, Fantasy and iGaming, and we know what sports customers want. Our Sportsbook and iGaming apps are top rated in the industry by third parties for a reason, and we will bring that same excellence to Predictions with intuitive customer experience, content packaging and promotional mechanics that already resonate with sports fans. We significantly improved our offering in the second quarter as we executed on the road map we laid out at Investor Day. We expanded our sports content offering from April to July by over 25x, and now offer over 30 markets per MLB, NBA and WNBA game, including player markets and quarter period and inning markets, and we broadened our coverage across multiple soccer leagues. This depth was bolstered by the launch of combos, which have quickly become one of the most popular ways for customers to engage with our offering. In June, we launched our in-house exchange, DKeX. And in July, we obtained approval as a Futures Commission Merchant from the National Futures Association. Both steps position us to rapidly expand content depth, improve the end-to-end customer experience and capture more of the unit economics and lifetime value of our customers. We are also seeing meaningful traction on the market making side as we leverage our industry-leading Sportsbook modeling and risk management capabilities. We are live on 3 exchanges and consistently making markets on both singles and combos at a profit. While still early, we are seeing double-digit share in the markets where we participate. Now that DKeX is live and our market maker is integrated, the opportunity is even more compelling. As DKeX grows, it will create more opportunities for our market maker while deeper and more diverse liquidity will make our own offering more attractive to customers. This is a core differentiator that will provide a meaningful lifetime value advantage versus our competitors. As always, we are focused on the economics. As we continue to improve our platform and monetization over the next several years, we believe that we can generate lifetime values on Predictions customers similar to those on our Sportsbook customers. Our vertical integration is what makes this possible. We own 3 key layers of the Predictions stack in-house: the brokerage, the exchange, and the market maker. This integration lets us capture economics across the entire value chain. We are the only operator that has all 3 up and running today, which gives us a structural lifetime value advantage over our competitors. While the revenue per customer will be lower than that of our Sportsbook offering, the higher-margin profile of the business supports a similar level of gross profit per customer over time. We have driven meaningful lifetime value improvement in Sportsbook for nearly a decade through our top-rated offerings, and we are confident we can run that same playbook in Predictions. To wrap up Predictions, the similarity of Predictions customer metrics to Sportsbook customer metrics, our advantaged lifetime value position and our playbook to develop and innovate on a leading Predictions offering all underpin our confidence that we can win in the space. We are already seeing encouraging results, and our share rose as the second quarter progressed. We are excited to update you over the next quarter as this momentum continues. NFL kickoff is next. We continue to enhance the Super App ahead of football season, which will deliver a sports experience that no other operator can match, a top-rated Sportsbook offering and a fully vertically integrated Predictions offering. We entered the season from a position of strength with a strong core, access to nationwide customers and a playbook for how to win in sports that leverages our in-house marketing, product and technology infrastructure. At our Investor Day, we laid out a path to a $55 billion to $80 billion industry gross revenue opportunity by 2030 and at least a 30% long-term adjusted EBITDA margin, and the progress we made in the second quarter made that path more tangible. We are moving with urgency and discipline. We are not building to participate. We are building to lead and win. With that, I will turn it over to our Chief Financial Officer, Alan Ellingson. Alan Ellingson: Thank you, Jason. I'll hit the highlights, including our second quarter performance and our fiscal year 2026 guidance. Please note that all income statement measures discussed, except for revenue, are on a non-GAAP adjusted EBITDA basis. As Jason mentioned, we generated $115 million of adjusted EBITDA in the second quarter. This would have been even higher absent customer-friendly sport outcomes and stronger-than-expected customer acquisitions, both of which weighed on near-term profitability. Normalizing for these factors, revenue increased 10% year-over-year in the second quarter. This top line strength was driven by continuing robust demand. As Jason noted, the nearly 75% increase in year-over-year customer acquisition was at our best customer acquisition costs since the first quarter of 2025 and was combined with sports consumer volume increasing 15% year-over-year and Sportsbook handle increasing 11% year-over-year, while parlay handle mix continuing to rise. We had a tremendous NBA season with total handle growing 7% year-over-year and parlay handle mix increasing more than 400 basis points. The World Cup also provided an excellent opportunity to engage customers with Sportsbook handle approximately 6x higher than during the 2022 World Cup and approximately 4.5x on a same-state basis. Importantly, these customers are continuing to engage with us beyond the event reflected by continued double-digit year-over-year handle growth in July after the World Cup ended. We did experience some customer-friendly outcomes in June after 7 months of Sportsbook friendly outcomes mainly driven by the Knicks championship win, which had an outsized impact on our largest Sportsbook state, as well as by the World Cup group stage performance. We held nearly 12% for the World Cup in total with positive outcomes in July, mostly offsetting the aforementioned customer-friendly outcomes experienced in June. Our overall World Cup performance is another demonstration of how outcomes can swing in the short term and typically normalize over an entire season or tournament. We also continue to operate with discipline on the cost side. Adjusted G&A expense declined 6% year-over-year and adjusted operating expenses, excluding external marketing and Predictions, also improved year-over-year. We remain focused on improving the efficiency of our cost structure while continuing to invest behind the opportunities that we believe will create the most long-term value. Strong retention and engagement of our newly acquired customers have further strengthened our confidence in the business. Our core business is on track to generate approximately $1 billion of adjusted EBITDA in 2026. Now I'll touch on our fiscal year 2026 guidance. Last quarter, we communicated fiscal year 2026 guidance of $6.5 billion to $6.9 billion in revenue and $700 million to $900 million in adjusted EBITDA. That adjusted EBITDA guidance range already reflected our expected investment in Predictions, which we continue to view as a significant and incremental opportunity for the company. Given the strength of our core business and our ongoing expectations to invest in Predictions, today, we are maintaining our fiscal year 2026 guidance ranges. Our confidence is supported by what we're seeing across customer acquisition, retention, engagement and operating efficiency. While we remain prepared to invest where returns justify it, the underlying earnings power of our core business continues to exceed our expectations. As always, we remain disciplined in how we allocate capital. As our balance sheet strengthens and the business grows, we have increasing flexibility in how we fund our operations and investments. We will continue to evaluate opportunities to optimize our capital structure as our debt maturity profile evolves while maintaining a prudent approach to leverage. That concludes our remarks. We will now open the line for questions. Operator: [Operator Instructions] Your first question comes from the line of Stephen Grambling with Morgan Stanley. Stephen Grambling: I think one of the questions that we often get or pushback we get around prediction markets is you gave the stat that most of the volume coming through some of your competitors appears to be professionals or syndicate-type things. Why do you think you're able to capture a different customer and why will that be the same in prediction markets? And are there any limitations you see as you look at your vertically integrated platform in terms of the product set that you can offer them or even the promotions and personalization that perhaps you can get in OSB that might be different as we look at prediction markets and the ramp there? Jason Robins: Great question, Stephen. So I think it's really the difference between states that have a legal and established OSB market and states that do not. In states that don't, like California and Texas, we are seeing a very similar customer profile to who we get on OSB in the states that we have OSB. And I think if you kind of look back at prior competitive launches, and there have been many, as you know, having followed this for a while. Most of them, even if they get a little bit of volume to begin, don't really make a dent long term, and there's really a couple of reasons why. One, customers are sticky. Two, we have an excellent product experience. And in the case of Predictions, as you noted, it's very differentiated in the content we offer, our ability to do promotions and lots of other things that are very different from the experience that you get on a sports prediction app. But even if you didn't believe that, even if you thought it was roughly equivalent, you can look at other launches from other competitors. And it really just doesn't ever make a big dent. So we looked at a lot of internal data, also using third-party data, and we have a number of different ways that we've triangulated various metrics to come to the same conclusion, which is, one, there is very minimal, if any, cannibalization happening. And two, where these volumes are coming in legal OSB states on the prediction markets are from the -- where the demand was and therefore, where the volumes are coming were from the institutional professional syndicates, people that were not previously active on DraftKings. So great to see it's an incremental opportunity and not something that we believe will ever be cannibalistic, but we're obviously taking that seriously, and we're continuing to invest in the OSB product. But again, to answer your first question, the reason I think it will be different for us is where we're focused is on the states we don't have an OSB offering. And there, because you don't have competitive OSB offerings, it's a very different picture. Operator: Your next question comes from the line of Dan Politzer with JPMorgan. Daniel Politzer: I wanted to touch on the core business. One of your peers obviously has been talking about incremental sports investment in the promotional environment. They're investing a few hundred million dollars more. So how do you think about the competitive environment, the promotional environment as you go forward and the confidence in being able to achieve your guidance range for the year? Jason Robins: We've always seen fluctuations and promotions. I mean in the grand scheme of things, them spending a few hundred million more on promotions is not a major shift. And we've always been able to be more efficient with our promotions. So I expect that to continue to be the case. This has been for years now that we've seen fluctuations, honestly, much more significant increases in spend from certain other competitors than what we're seeing now. And this is kind of a blip on the radar from what we're seeing. There really isn't a big difference in the competitive environment on the OSB side. So just as we've always done, we are going to stay steady with our strategy. We're going to continue to execute, and we believe that we have really demonstrated over the last few years that we can be more efficient with our promo and we can grow our handle and GGR share at the same time. Those are not things that we view as a trade-off. So we're going to continue to execute that strategy. Operator: Your next question comes from the line of David Katz with Jefferies. David Katz: I wanted to get -- Jason, you ran through some of the economics of players in prediction markets versus OSB players and get a sense of the arc to profitability of those players, given that we've had the experience with OSB. And one of the things we've been asked and delving into is about best execution requirements in Predictions. And can you route all of your volume to your own platform, right? Or is that a more complicated dynamic than maybe we realize? Jason Robins: I don't think it's more complicated. So we're certainly planning to shift the volume that we have in sports at least to our platform in the coming months. I think we will continue for probably certain tail sports even, but certainly for things that are in the non-sports category, we will continue to use third parties. But even that, we ultimately believe we can shift to our exchange. So no real reason that we can't do that. As far as the economics go, we're looking at this in a way that is very similar to how we evolved in Sportsbook. We started off -- we had an LTV model that we built in the early days of Sportsbook. We were pretty cautious because we didn't have a lot of data. Here, we do have comparable data on the Sportsbook side, which I think particularly when it comes to customer acquisition gives us a good sense of what to expect. But little bit less so maybe in terms of modeling out what the ultimate monetization of these customers will be. So I think we've been very careful and disciplined in how we're doing that. We're not assuming major increases that we don't have line of sight to. We are, however, assuming a reasonable road map for when we will start to migrate. We just got our FCM license, for example, that changes our unit economics by bringing more to us. And we are assuming some time lines for when we'll be able to migrate volume over, as I mentioned, to our exchange, and then we are making some assumptions on how we can grow market making in there. But again, being, I think, very cautious in doing that. I believe we can actually do better than what we're assuming. The good news is right now, customer acquisition looks so strong that we really don't need to assume anything more aggressive to make the numbers work. As I noted, we really saw incredible efficiency in Q2. We actually spent a little bit more. We spent about 10% more than we were planning, but we had 25% better customer acquisition costs. So that gives you a little sense of how strong the environment is right now. Operator: Your next question comes from the line of Jordan Bender with Citizens. Jordan Bender: Jason, early days, you often gave what the cross-sell from like DFS into OSB looked like. Are you may be able to talk about that dynamic of cross-sell from Horse and Jackpocket and DFS into prediction markets in these new states versus how much of these people are just net new adds? And then maybe the second part of that is how is ESPN playing a role in all of this? Jason Robins: Yes, it's great that you brought that up because I think what you're touching on really is the underpinning of our strategy when it comes to acquiring and monetizing customers and growing our geographic footprint. So it starts with we want a full product suite. We want to offer as many customers, as many products as we can in as many jurisdictions as we can around the country. And doing -- on that mission, we have gone beyond, as you noted, DFS into other verticals like lottery and horse. And we right now have, I think, the strongest footprint of anyone in the legal regulated betting space when it comes to our product portfolio. So that's a huge advantage for us and something we'll continue to press. And then also having a really strong cross-sell engine so that not only can we get those customers on to Predictions and things like that when we launch, but we can continue to create that flywheel where we're engaging customers on all of our products throughout the year, which, again, is really a great thing for monetization as well. So that's really the core of the strategy. And at this point, we have not put out any direct cross-sell numbers from DFS or anything else to Predictions. But as you can imagine, it's a very similar product to when we launch sports betting in these states. So we're seeing similar types of numbers, actually a little bit better because we've honed our ability to cross-sell since the early days of Sportsbook launches. Operator: Your next question comes from the line of Shaun Kelley with Bank of America. Shaun Kelley: Jason, I just wanted to go back to the prediction market spending target, the $200 million to $300 million. And I know you said that CACs are a little bit better there, but you're also chasing in Q2. I think we always think of DraftKings as kind of fishing when the fish are biting a little bit. So just help us think through if we kind of go through a really successful customer acquisition period in the third quarter and heading into the fourth. Do you think that you'd be willing to go above those targets if you are just really encouraged by what you're seeing in the data? Or are you able to kind of put some guardrails around it, just given the flexibility of dollars elsewhere? Jason Robins: Well, it's a great question you're asking, Shaun. We have always been and will continue to be very data-driven as a company. And what we do is we model out ROI on any capital investments, and we try to make the smartest capital investments we can to position the best returns for our shareholders over the long term. So this is really no different. I do think, in this case, though, remember, we already have a huge national marketing footprint partners like ESPN, NBC, Amazon, several sports leagues and others. So we already have a lot of capital going towards those things that is going to now basically just be more effective because it's reaching the same customers that we are reaching before in the Sportsbook states, but now it's also reaching all these remaining states that have Predictions. So that itself is a huge advantage for us. And then as we've noted, we're planning on investing an incremental $200 million to $300 million this year, which is not a small number. But yes, you're right, we are going to follow the data, as we said in Q2, we did end up spending about 10% more than we expected. That was because the customer acquisition environment was so strong. Even with that 10% incremental spend, we have 25% better CAC than we expected. So if we see something like that line up this fall, then yes, I think it would be the wise move and our shareholders would want us to invest in that type of environment. But at this point, we feel like given the data we have, this is the right place to be. And obviously, we'll tweak it and make adjustments as we see data come in. But it's really something that, you're right, I think is how we've always operated, and we did that in Q2. I mean, just literally last quarter, we invested 10% more than we expected in customer acquisition. Operator: Your next question comes from the line of Brandt Montour with Barclays. Brandt Montour: Just looking at the guidance for the rest of the year, it does imply a pretty big fourth quarter. And I'm just curious if you could give us some sense for how you think the sort of building blocks can get you there between sort of sports versus iGaming, but more specifically with sports, sort of the rough expectations for market-wide growth, if you're expecting market share growth and the swing -- or sort of what we can kind of think of in terms of theoretical win margin for sports? Jason Robins: Yes. So I mean, Q4 is always our biggest quarter. So I expect it to be the same. But really, what we're encouraged by is the strength that we're seeing in the core business. As we noted on the call and in our letter, we are expecting about $1 billion this year in our core business for adjusted EBITDA, which is a really a nice gain over last year. And then the other thing we're really excited to see is that the momentum in the core is increasing. I know everyone was questioning handle last quarter and in Q1, I should say. Nobody is asking about it now, which is good, I guess. We're on to the other things. But handle, which was the big question mark and everyone was worried about Predictions cannibalization, handle grew 11% in Q2, but even more importantly, handle has been absolutely on fire since Q2. July, even after the World Cup, right? So obviously, World Cup affects things. But even if you take post World Cup, July handle was up 20% year-over-year. So to me, that shows real momentum in the business. We're seeing it continue into August. I think it's going to be a big NFL season. I think a lot of this chatter -- sometimes what happens is when there's just overall marketing and awareness and chatter about something, it lifts everything. And I think what's happening here is that both the World Cup impact and also just Predictions and having everybody talking about this all the time, I think, is really just going to lift everything. So I'm expecting NFL to be really large for us and I think we're going to have a huge back half of the year. Now that said, we didn't assume anything crazy outsized when we put the guidance out there. We assumed what we thought we were going to do earlier. So really, we're not changing anything in the back half in terms of our assumptions. But seeing the strength, seeing the momentum not just through the World Cup, but post World Cup in July gives me great confidence that we are on track to hit and maybe even exceed what we're expecting to do in the core business in the back half of the year. Operator: Your next question comes from the line of Clark Lampen with BTIG. William Lampen: Jason, I wanted to come back to sort of DK Exchange and now that you have all of the sort of pieces here in place with brokerage, exchange and market maker. Could you help us understand, I guess, the philosophy as you sort of are seeing really favorable CAC right now in going to market. Should we assume that the majority of the onboarding volume from here forward is going to be running through the exchange? And if that's correct, and it starts to happen, what's the sort of derivative impact to the fee structure? Is there a level that maybe you believe you can achieve or have targeted for the fall? Jason Robins: Yes, it's a great question, and I'll come to the fee structure piece in a moment. But first, the first part of your question on just what the strategy is. The nice thing about Predictions is, and actually, this is true at Sportsbook too, it doesn't have to be all or nothing. You can plug into multiple exchanges, you can source content from multiple places. So what we will do is we will phase DK Exchange in. Our expectation is that the vast majority of our sports content, at least in the major sports that are going on this fall, starting, of course, with CFB and NFL that we're going to try to port as much of that volume over the exchange as fast as is reasonably possible. But the really important thing, the #1 thing that we are making sure is that we feel like we have the best possible consumer offering out there. So to the extent that, that means we have to move a little slower or a little faster on moving things onto our own exchange, we will. Number one is making sure that the customer has the best experience because you can do things at a different pace in the back around that maybe help the economics. But what you can't do is repair a poor customer experience. So that's something we are holding as sacred. But I do expect that as we continue to move more and more volume through our own exchange, those unit economics will continue to improve for us, and that should be a tailwind not just through this year, but through next year as well. Remember, in Sportsbook, this was a multiyear tailwind. It took us several years to bring all of our content. And we don't even have all of it now, we have about 95% of our sports content that we price and trade in-house. So similarly here, when you think about exchange and market making, we're going to try to get to those kinds of numbers. But I don't know exactly how long it will take. I do think it will be faster than it was in Sportsbook because we have so much more core infrastructure now that allows us to move faster. And as I said, it doesn't have to be all or nothing. In terms of the fee, that's a good question. I think right now, the fee structure for the industry has been pretty stable. I don't expect it to change much. So the more that we bring in-house, the more we can just capture LTV from those exchange fees ourselves, and that gives us a unit economics advantage and an LTV advantage over the competition. Operator: Your next question comes from the line of Robin Farley with UBS. Robin Farley: I wonder if you could kind of help us think about the components of your EBITDA guide. It didn't change in total. And not that you're going to give the specific quantifications. But could you kind of talk us through, was there like an increase in what you thought you'd make in market making that's sort of offsetting some promotional or offsetting maybe hold impact? Or just kind of we think about what the puts and takes are of the unchanged guide? Jason Robins: Yes. There's always little pieces moving around that affect things, for sure. But the big components to think about are, number one, core business is on track to do approximately $1 billion in adjusted EBITDA, really excited about the momentum we're seeing there. I think there could even be a little bit of upside on that one. But right now, we feel comfortable saying approximately $1 billion, and then $200 million to $300 million of Predictions investment expected on the year. So those are kind of the high-level components to your -- kind of some of the things you are alluding to in the market because there are little pieces moving underneath the hood. But some of those things, they're so small that like they kind of wash through. And yes, we do obviously update them in our forecast, but they're not material enough for us to be really calling out as individual line items. Robin Farley: Okay. And maybe just as a quick follow-up. In Q2, you talked about the revenue decline being a combination of sport outcomes and the higher commercial spend. Can you give us a sense of kind of what the split was just so when we're thinking about what you're comping, the sport outcomes kind of an easier thing to get back in theory. So just sort of kind of rough proportion of which of those versus, I think, what you said would have been up 10% in Q2 in revenue? Jason Robins: Yes. So sport outcomes basically drove about an $80 million revenue headwind and the rest was customer acquisition. Operator: Your next question comes from the line of Trey Bowers with Wells Fargo. Raymond Bowers: Just wondering if you could dig a little more on the iGaming business. The revenue growth was pretty similar to the previous quarter and actually better than I'd say some of the state-level GGR was suggesting. So just curious about kind of the promotional environment, how you see that trending over time? And any thoughts on expectations for what that growth might look like for the balance of the year? Jason Robins: Yes. So we're actually -- iGaming, despite the fact that we have not performed the way that we had wanted to over the last several quarters, we are starting to see some real momentum there. And as you noted, I think it was a little better than maybe some of the state reports might have led people to conclude. A big piece of that was the Lightning Link launch. That was something we really leaned into, one of the biggest land games ever and really the last big land game to make its way online, at least of that magnitude. And so that was a big one for us. We launched a product called Flex Spins. Flex Spins allows you to give bonus spins across any game that people choose. Most of our competitors do not have that. They only allow you to get bonus spins on a particular game that they assign them to. So customers have really been responding well to that. We've been getting a lot of positive feedback on that. And our share has really stabilized after several quarters of losing share. So I'm hoping we can kind of turn around and start gaining share over the next several months. I do feel like we have some real momentum there between the various things that I talked about. And also, acquisition into iGaming has been really strong, too. We talked a lot about sports, of course, but we also saw better-than-expected customer acquisition in iGaming, too, in Q2. So it really feels like that business is on the rise and I have big expectations for the next several months. Operator: Your next question comes from the line of Jed Kelly with Oppenheimer. Jed Kelly: Great. So circling around that 600,000 Predictions customers. Typically, when you launch in the state, I think you said previously, you're able to get mid- to high single digits of a population. Is there something structural or product-driven that precludes you from doing this as the product gets up to your standards where you really want to market it and get it into, call it, your meat and potatoes sports fans? Jason Robins: Yes, it's a great question. So I think that there's two things going on here. One is we are obviously still learning, and we are taking a little bit more of a cautious approach in Predictions investment for various reasons. One, we're still learning about the numbers and what the ultimate LTVs can look like. Two, there are some regulatory questions that make the future and exactly what that's going to look like not entirely certain. So we aren't leaning in quite as hard as we would in, say, a new state launch at this point. As those things become more clear, obviously, we will always think about adjusting. But right now, that is how we are philosophically viewing it. The second thing is there have been a lot of states that DraftKings has not operated in for many years that have been seeing national advertising. So I do believe there's an education period that needs to occur for people to understand that they can actually -- if you are in California, you can use DraftKings now. If you are in Texas, you can use DraftKings now. So that's something that we started to do in the World Cup. I think will really become apparent in the NFL season. And I think when you start to see that broader awareness really take hold, that's when you're going to see much, much faster customer acquisition come in. But this is not too dissimilar from when we launched our first OSB states. If you recall, New Jersey, which is our first OSB state, ramped much slower than our more recent state launches. And that's a combination of us honing our state launch playbook for sure. So that's part of it. But it's also a combination of just general awareness, general market momentum, people knowing when a state is launching now, being ready for it. Just different stage of that development curve than where Predictions is. Predictions is still a growing thing, and there's still an education process happening for people to understand they can access DraftKings in these states that they couldn't before. But the nice thing is we have this big national marketing footprint now. So we don't really need this massive amount of incremental spend in order to create that awareness. We can just refine our message, which we started to do in Q2, that DraftKings is now available in all these other places, and really make those same dollars work for us across the country, whereas before it was only about half the population. Operator: Your next question comes from the line of Bernie McTernan with Needham. Bernard McTernan: Just wanted to circle back on something that you said in the prepared remarks about the flywheel of being vertically integrated. Just hopefully you could dive into that a little bit more talking about the structural advantage and network effect that come from being a vertically integrated prediction market operator. Jason Robins: Well, it's really important, the question you're asking, and it's been core to our strategy, not just in Predictions, but virtually every product we've had. I'll actually start by explaining it via OSB, but it's really no different conceptually than Predictions. So in OSB, when we started off, we launched the product on a third-party platform called Kambi. We were not using our own back-end technology. We were not doing any of our own pricing and trading. And thus, we were seeing 2 things. One, a lot of the unit economics were going out the door to others. And two, we didn't have full control of the product and customer experience. So really, where you see this flywheel develop is across 2 dimensions, LTV being the centerpiece of it. So the first dimension is that we can now capture more unit economics because we are on our own technology platform. We are doing our own pricing and trading. So all that value is accruing to DraftKings. That allows us to then invest more back into customer acquisition because we now have higher LTVs. The second thing you're seeing is that we are improving our retention, improving our monetization because we are actually developing products at a faster pace and putting out differentiated offerings that we couldn't do before because we didn't have the full product control. And so our pace of development and the ability that we've had to increase our retention and our monetization of customers has just been absolutely tremendous the last few years. Predictions, same story. In Predictions, there's really 3 components. There's the front end, the IB, and also FCM is a piece of that, too. There's the exchange and then there's the market making, and DraftKings is playing in all 3 of those. We have a right to win in all 3 of those. And so we expect to be able to execute a similar playbook where we can capture a very large percentage of the total unit economics in LTV, which should give us that advantage that we have in Sportsbook now. Similarly, we expect to be able to use these capabilities to develop proprietary content and create new offerings that other competitors will either be slow to catch up or may not even be able to do depending on what capabilities they have in-house. So very, very similar, exactly the same playbook that we executed in the other verticals. And the reason that we have a high degree of confidence that, one, this works; and two, we can execute it because we've done it before. Operator: Your next question comes from the line of Ben Chaiken with Mizuho. Benjamin Chaiken: Jason, you mentioned acquiring more Prediction customers than planned and seeing retention in volume similar to OSB, which is encouraging lower CAC, I believe. But it sounds like, I think if I caught this correctly, acquiring 10% -- or sorry, spending 10% more in Predictions than you had planned. I guess I asked this question in the context of external marketing spend overall that I believe is lower than expected, which is presumably better OSB. So maybe the exact question is, can you clarify or add some color to what was seemingly much more efficient EM spend within OSB, assuming I have all the implied moving parts correct? Jason Robins: Well, it's a great question you're touching on because when I say we spend a little more, it doesn't always mean incremental to enterprise. We're also constantly optimizing our acquisition spend and all of our spend across every product that we have. So there may be times where we think it makes sense to add incremental, but there might also be times where like we just think we should shift some spend from this vertical to this one because we're getting more efficient performance here. And we have such a large portfolio of spend at this point across so many different channels, verticals and other parts of the ecosystem that we really have a lot of flexibility to do that. So it's a great question. And yes, you're right. And if we do see really strong Predictions results, it is possible we invest more as an enterprise, but it's also possible that depending on what we're seeing in our other verticals, we shift some of that spend over. Benjamin Chaiken: And anything particular in the OSB efficiency, EM spend-wise? Jason Robins: We saw a really efficient OSB spend results on the CAC side as well. I think there were 2 things. One, obviously, was World Cup. And two, I think being able to really have this broader DraftKings everywhere message has helped everything lift. So in the core, for example, in Q2, we saw a 40% year-over-year increase in customer acquisition at the best CAC we've seen since, what was it, 2024, I think, 2025, Q1 2025. So 6 quarters since we've seen this kind of efficiency. And I think next quarter is going to be much more efficient just based on seasonality. So really experiencing a great tailwind here across everything, and I expect that to continue going into the fall. Operator: Your next question comes from the line of Joe Stauff with Susquehanna. Joseph Stauff: Going into the new sports calendar and the app upgrade in particular coming out in August. What do you think are the most relevant product upgrades you think will be material? Jason Robins: Well, I don't want to get into too many specifics because my product team wouldn't be too happy about that. But we do have a big upgrade coming up in the next few weeks with a number of new features and content planned to launch. More recently, maybe I'll talk about some recent features that we're going to continue to ramp across a few products. So first on Predictions, combos has been absolute smash, not surprising, but we're seeing incredible traction there. We just launched DK Exchange, we just obtained our FCM license. So tremendous progress on the vertical integration strategy. Combos, as an example, is about 20% of all of our volume now, which to put in perspective, took us years to get to in Sportsbook, so a much faster ramp on that front there. And then in our other products, we've had really great progress, too. So we launched something called Moonshot, which is an OSB product that we're really excited about. On iGaming, I mentioned Flex Spin. There is the Lightning Link launch. So a lot of good stuff going into the fall, and we have more things planned. This is always August, when everyone's taking vacations in the Hamptons or wherever else. We're always working hard because it's the weeks leading up to our busiest time of the year, and we ship the most product in August than we do all year long, really. So this is a big moment for us in terms of upgrading the consumer offering. Operator: We have now reached the end of the Q&A session. I will turn the call back to Jason Robins for closing remarks. Jason Robins: Thank you all for joining us on today's call. We are excited to be well positioned for continued success in the future, and thank you for your continued support. Have a good day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in DraftKings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and DraftKings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* Now, it’s worth noting Stock Advisor’s total average return is 964% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 14, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. DraftKings (DKNG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

DKNG missed Q2 EPS by 53% and EBITDA collapsed 62%, but Jason Robins' Predictions platform surged to $11 billion in annualized volume. DKNG returned 22% in the 30 days after Q1's beat while SPY fell, putting the NFL season earnings report at center stage. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and DraftKings didn't make the cut. Grab the names FREE today. At $24.03, DraftKings (NASDAQ:DKNG) is a hold. The Q2 report gave both sides fresh ammunition, and the stock's sharp intraday round trip suggests the market is still working out which narrative wins. DraftKings is the second-largest U.S. online sportsbook operator, with mobile sports betting live in 27 states, D.C., and Puerto Rico, iGaming in 5 states, and a newly launched Predictions platform competing with Kalshi and others in event contracts. The company posted its first full-year GAAP profit in 2025, then followed it with a Q2 2026 miss that reset expectations. Revenue of $1.44 billion came in 4.48% below consensus, and adjusted EPS of $0.09 missed the $0.1917 estimate by 53.05%. Shares closed flat on the day after touching an intraday low of $21.895. CEO Jason Robins said annualized Predictions volume grew nearly 5x from $2.3 billion to $11 billion between April and July, with over 600,000 customers engaged year-to-date at acquisition costs well below Sportsbook levels. The company owns the brokerage, the exchange, and the market maker in-house, capturing the full value chain. Core metrics remain healthy. Sports consumer volume rose 15% year-over-year, monthly unique payers grew 9%, and July handle was up 20% year-over-year even after the World Cup ended. Management maintained full-year guidance of $6.5 billion to $6.9 billion in revenue and $700 million to $900 million in adjusted EBITDA. Wall Street is on board: 29 Buy ratings against 1 Sell. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and DraftKings didn't make the cut. Grab the names FREE today. The Q2 earnings report was ugly. Revenue fell 4.58% year-over-year, adjusted EBITDA collapsed 61.88% to $114.6 million, and the company swung to a GAAP net loss of $67.6 million from $157.9 million in net income a year earlier. Sportsbook net revenue margin compressed to 6.8% from 8.7%, and ARPMUP dropped roughly 13% to $132. Marketing spend surged to $322.5 million from $233.2 million, and management flagged incremental Predictions investment of $200 million to $300 million for the year. Insider activity has been net selling across 93 recent transactions. Regulatory risk around event contracts remains unresolved, and competition from FanDuel and Kalshi is intensifying as DraftKings spends aggressively to establish share. Predictions growth and Super App traction are real, but they arrive alongside sport-outcome volatility that management said drove roughly $80 million of revenue headwind in the quarter. The 200-day moving average of $27.35 sits well above spot, but the 52-week low of $20.46 is closer than the high of $48.78. The NFL season is the tiebreaker. Robins expects a huge back half, and history shows DraftKings has outperformed SPY in 30-day windows after both beats and misses. Another quarter of margin compression, or evidence that Predictions cannibalizes rather than expands the pie, would validate the bear thesis quickly. DKNG trades at $24.03 against an analyst consensus target of $34.78, implying 44.74% upside if the target proves right. The forward P/E sits at 23x, price-to-sales at 1.9x, and free cash flow yield near 5.43%. The analyst breakdown skews sharply positive: Strong Buy: 5 Buy: 24 Hold: 6 Strong Sell: 1 Performance has lagged badly. DKNG is down 30.27% year-to-date and 46.84% over one year. In the 30 days after the Q1 beat, DKNG returned 22.48% while SPY returned -0.21%, showing the stock can move fast when the story shifts. At $24.03, DraftKings is a hold. The setup is genuinely balanced. Bulls have Predictions annualizing at $11 billion in traded volume, a nationwide Super App, and 44% upside to consensus. Bears have a 53.05% EPS miss, a 62% collapse in adjusted EBITDA, and a GAAP loss that erased last year's profitability narrative. Both cases will be tested inside a single quarter. The trigger to buy is straightforward: Q3 results showing Sportsbook margin recovering toward 8%, plus Predictions monetization converting 600,000 engaged customers into revenue at Sportsbook-like LTV. That would validate the $1 billion core EBITDA target and put the $34.78 consensus in play. The trigger to sell is equally clear: another margin compression quarter, cuts to full-year EBITDA guidance, or evidence that Predictions promotional spend is not producing durable customers. Options markets show a full-chain put/call ratio of just 0.20, suggesting positioning is not crowded on either side. Waiting one quarter for NFL-season data gives investors the single most important read on whether the Predictions ramp is real. Hold is the right call because the next earnings report will settle an argument the current price cannot. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and DraftKings didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was characterized by a 'Super App' strategy that drove massive customer acquisition in non-Sportsbook states via the new Predictions offering. Customer acquisition grew nearly 75% year-over-year, achieving the best enterprise-wide acquisition cost since Q1 2025 due to high interest in the NBA Finals and World Cup. Management attributed a revenue headwind of $80 million to customer-friendly sport outcomes in June, which partially offset strong underlying demand. The company is utilizing a vertically integrated stack for Predictions—owning the brokerage, exchange, and market maker—to capture economics across the entire value chain. Internal data suggests minimal cannibalization of Sportsbook revenue by prediction markets, with only about 1% customer overlap between the two platforms. Operational discipline led to a 6% year-over-year decline in adjusted G&A expense, reflecting a focus on structural cost efficiency. Maintained fiscal year 2026 revenue guidance of $6.5 billion to $6.9 billion and adjusted EBITDA of $700 million to $900 million, including Predictions investments. The core business is projected to generate approximately $1 billion of adjusted EBITDA in 2026, excluding the $200 million to $300 million investment in Predictions. Management expects a significant product upgrade in August to deliver a best-in-class offering for the NFL season across all main verticals. Guidance assumes a continued shift of sports volume to the in-house DKeX exchange to improve unit economics and lifetime value over time. The company remains prepared to increase customer acquisition spend beyond current plans if data continues to show high ROI and efficient acquisition costs. Obtained approval as a Futures Commission Merchant (FCM) from the National Futures Association, a critical step for vertical integration and margin expansion. Management acknowledged regulatory uncertainty regarding prediction markets, leading to a more cautious investment approach compared to traditional Sportsbook launches. The 'DraftKings Sports' umbrella app now houses all offerings, acting as a primary accelerator for cross-selling and geographic expansion. Noted that 80% to 90% of prediction market volume in Sportsbook states currently comes from professional syndicates, representing an incremental audience. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated that in states without legal OSB, the customer profile for Predictions matches the traditional retail Sportsbook customer. Confirmed that institutional volume in legal states is incremental because those professional traders were not previously active on the DraftKings platform. Jason Robins dismissed competitor spending increases as a 'blip on the radar,' noting DraftKings has historically been more efficient with promotional spend. Stated that the company will not trade off handle share for profitability, believing they can grow both simultaneously through superior product experience. The transition to the in-house exchange will be phased to ensure customer experience is not compromised, prioritizing major sports like NFL and CFB first. Vertical integration is expected to provide a structural LTV advantage by capturing fees that previously went to third-party providers like Kambi. Management reported that iGaming share has stabilized following the launch of exclusive features like 'Flex Spins' and high-profile games like 'Lightning Link.' Acquisition into iGaming also exceeded expectations in Q2, contributing to the overall enterprise efficiency.

(Bloomberg) -- DraftKings Inc. Chief Executive Officer Jason Robins said he doesn’t think it is good that bettors are placing prediction market wagers on what executives say on company earnings calls. Most Read from Bloomberg OpenAI’s New Device Will Be Hockey Puck-Sized and Cost Over $300 Iran Wants to Bar US, Israeli Ships From Hormuz in Peace Accord Iran Says Agreement on Hormuz Shipping Reached With Oman Trump Administration Considers Order on Autism and Vaccines Why Do Data Centers Use So Much Fresh Water? “Making trades on whether someone will say something on an earnings call is probably not something that should be out there,” Robins said Friday in an interview with Bloomberg TV. Kalshi Inc. had offered bets on what DraftKings executives would say on a conference call with analysts on Friday, including whether they would mention Kalshi. They didn’t. “Hopefully not too many people took the positive side of that one,” Robins said. Kalshi did not immediately respond to a request for comment. So-called mention markets have become a popular topic for betting on prediction markets, along with the contracts tied to elections, geopolitics and sports. DraftKings, one of the top players in sports betting, launched a prediction markets product in December in a race to catch up with Kalshi and Polymarket, which have used so-called event contracts to circumvent state gambling laws. The Commodity Futures Trading Commission has said it has jurisdiction over the markets because they are financial derivatives. DraftKings said this week that it has attracted 600,000 customers to its new product, leaving it far behind the startup platforms, which have grown swiftly over the past year, especially during the excitement around the World Cup. Because the new exchanges offer their bets through financial contracts, they can open up to anyone over 18, unlike gambling companies which are generally restricted to people over 21. When asked about the startups’ ads focusing on young people, Robins said his company doesn’t promote its prediction app to players under the age of 21, or suggest that its wagers are a good way to make money. “We are not marketing that you can pay your rent money and marketing to college campuses, fraternities and things like that,” he said. “We are focused on marketing to adults and positioning ourselves as an entertainment product, which is the right way to do it.” Robins said the prediction industry’s promotional efforts are likely to get more scrutiny. “I think eventually they will get reined in.” The CFTC recently told event betting platforms to not market their wagers using sports-betting odds to avoid blurring the line between gambling and prediction markets, Bloomberg reported earlier. DraftKings reported mixed results for second-quarter earnings. Robins said profits would have been higher were it not for customer-friendly outcomes on sports bets and the company’s investment in new customer acquisitions. The number of monthly players rose 9% in the quarter. DraftKings shares rose as much as 7.7% on Friday. --With assistance from Ira Boudway. Most Read from Bloomberg Businessweek How Apple and India Built an Alternative iPhone Production Hub Lululemon Is At War With Itself TikTok Withheld a Safety Feature From Millions. One Died by Suicide Armed With $10 Billion, Sequoia’s Leaders Plan Its New Era RFK Jr.’s Cooking Show Is One Long, Boring Political Ad ©2026 Bloomberg L.P.

Interested in DraftKings Inc.? Here are five stocks we like better. DraftKings maintained its 2026 outlook for revenue of $6.5 billion to $6.9 billion and adjusted EBITDA of $700 million to $900 million, while management said the core business could generate approximately $1 billion in adjusted EBITDA. Customer acquisition rose nearly 75% year over year and exceeded plans, with acquisition costs about 25% below expectations. However, customer-friendly sports results created an estimated $80 million revenue headwind in the quarter. The predictions business is expanding rapidly: more than 600,000 customers have used it year to date, while annualized trading volume rose from $2.3 billion to $11 billion between April and July. DraftKings plans to invest an additional $200 million to $300 million in the business during 2026. Why "Big Short" Investor Michael Burry Sees Upside in Beaten-Down Sportbook Stocks DraftKings (NASDAQ:DKNG) said its core business continued to grow in the second quarter of 2026, generating $115 million in adjusted EBITDA as customer acquisition, retention and engagement exceeded management’s expectations. The company maintained its full-year revenue outlook of $6.5 billion to $6.9 billion and adjusted EBITDA outlook of $700 million to $900 million, including planned investment in its predictions business. Chief Executive Officer and co-founder Jason Robins said the company’s core operations are on track to produce approximately $1 billion in adjusted EBITDA during 2026. He attributed the quarter’s momentum to strong demand around the NBA Finals and World Cup, as well as the rollout of the company’s unified “Super App” strategy. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth DraftKings Hits the Jackpot With Super App Pivot “Our core business continues to grow and is generating significant free cash flow, and our newly launched predictions offering is growing faster than we anticipated,” Robins said. Customer acquisition rose nearly 75% year over year during the second quarter, according to Robins. DraftKings acquired roughly 30% more customers than it had planned, while spending about 10% more on acquisition than originally expected. Underlying customer acquisition costs were approximately 25% below the company’s expectations, he said. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Regulatory Jackpot: Gaming Stocks Surge on a Surprise Bill Monthly unique payers increased 9% year over year, or more than 6% excluding customers who participated only during the World Cup. Sports consumer volume, which includes sportsbook handle and predictions consumer volume, increased 15% from a year earlier. Sportsbook handle rose 11%, while parlay handle mix continued to increase. Robins said DraftKings’ handle share improved year over year across sportsbook states for the third consecutive quarter. On a normalized basis excluding sports outcomes and customer-acquisition activity, revenue increased 10% year over year in the quarter. Net revenue per unique customer rose 14% year over year on a trailing 12-month basis through the first half of 2026. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling The company said customer-friendly sports outcomes, particularly in June, weighed on reported profitability. Chief Financial Officer Alan Ellingson said the impact from sports outcomes represented about an $80 million revenue headwind. He cited the Knicks’ championship win in DraftKings’ largest sportsbook state and World Cup group-stage results as key factors. DraftKings held nearly 12% for the World Cup overall, Ellingson said, with favorable outcomes in July mostly offsetting the customer-friendly June outcomes. Sportsbook handle was approximately six times higher during the World Cup than in the 2022 tournament, and about 4.5 times higher on a same-day basis, according to the company. DraftKings said more than 600,000 customers had engaged with its predictions offering year to date. From April through July, annualized total volume traded increased nearly fivefold, rising from $2.3 billion to $11 billion. The company has expanded its sports-predictions content, with more than 30 markets now available for MLB, NBA and WNBA games, including player and period-specific markets. DraftKings also introduced “Combos,” which allow customers to engage with multiple markets. More than half of predictions customers have used Combos, and the product is approaching 20% of predictions consumer volume, Robins said. In June, the company launched its in-house exchange, DKeX, and in July it received approval from the National Futures Association to operate as a futures commission merchant. Robins said those developments position DraftKings to expand content, improve the customer experience and retain more of the economics associated with predictions activity. DraftKings is live on three exchanges and is making markets on singles and Combos at a profit, management said. The company reported double-digit share in markets where it participates. Robins said the company sees limited overlap between sportsbook customers and users of the largest prediction-market operator in states with regulated sportsbooks. DraftKings estimates that 80% to 90% of prediction-market consumer volume in those states comes from professional betting syndicates and institutional traders, based on its internal analysis. He said DraftKings expects its predictions customers in states without online sportsbook access, including California and Texas, to more closely resemble traditional sportsbook customers. The company believes its broader product portfolio, national marketing footprint and ability to cross-sell from daily fantasy sports, lottery and horse-racing offerings will support growth in those markets. DraftKings expects to invest an incremental $200 million to $300 million in predictions during 2026. Robins said the company could adjust spending if customer-acquisition returns remain especially attractive, though he emphasized that management is evaluating investments through return-on-investment models and can also reallocate marketing spending between products. Ellingson said adjusted general and administrative expense declined 6% year over year in the second quarter. Adjusted operating expenses, excluding external marketing and predictions, also improved from a year earlier. Management said it does not view increased promotional investment by a competitor as a significant change in the online sportsbook environment. Robins said DraftKings intends to maintain its strategy of pursuing promotional efficiency while seeking handle and gross gaming revenue share gains. Robins said DraftKings’ iGaming business is showing signs of improved momentum after several quarters in which the company did not perform as it had hoped. He pointed to the launch of Lightning Link and a product called Flex Spins, which enables users to apply bonus spins across games of their choice. He said iGaming market share has stabilized and that customer acquisition in the segment was stronger than expected in the second quarter. Looking ahead, DraftKings plans another Super App upgrade in August before the NFL season. Robins said the company expects to migrate a substantial portion of major-sports predictions volume to DKeX over time, while prioritizing customer experience during the transition. “We are moving with urgency and discipline,” Robins said. “We are not building to participate. We are building to lead and win.” DraftKings Inc is a leading digital sports entertainment and gaming company specializing in daily fantasy sports, sports betting and iGaming products. The company provides an integrated platform where users can participate in daily fantasy contests, place wagers on professional sports events, and enjoy a range of online casino-style games. DraftKings' proprietary technology supports real-time odds, live scoring and advanced analytics to enhance the user experience across mobile and desktop applications. Founded in 2012 by co-founders Jason Robins, Matthew Kalish and Paul Liberman, DraftKings began as a daily fantasy sports provider and rapidly expanded into regulated sports betting following legislative changes in the United States. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "DraftKings Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

DraftKings (NASDAQ:DKNG), a digital sports betting, fantasy sports, and iGaming platform, closed at $24.03, up 8.39%. Investors focused on prediction-market and customer-activity growth after Q2 results missed expectations. Trading volume reached 36.1M shares, coming in about 173% above its three-month average of 13.2M shares. DraftKings IPO'd in 2019 and has grown 145% since going public. The S&P 500 (SNPINDEX:^GSPC) rose 0.59% to 7,756, while the Nasdaq Composite (NASDAQINDEX:^IXIC) gained 1.28% to 26,686. Among online gaming, sports betting, and digital entertainment peers, Flutter Entertainment (NYSE:FLUT) closed at $94.74, up 1.86%, while Rush Street Interactive (NYSE:RSI) finished at $24.86, down 0.88%, highlighting mixed trading across sector rivals. While the headline of DraftKings’ sales dropping 5% may look bad at first blush, it was actually a pretty solid quarter. In a quarter where many favorites won, or “customer-friendly sport outcomes” occurred (as DraftKings called it), most of the company’s non-sales figures were fine: sports consumer volume rose 15% monthly unique payers (MUPs) jumped 9% annualized total volumes on its predictions services quintupled from April to July maintained 2026 guidance announced core betting business to generate $1 billion in adjusted EBITDA this year That said, I’m surprised the market is this optimistic about the results, especially given that the company whiffed on both the top and bottom lines relative to analysts’ estimates. Sure, prediction markets may be the future for DKNG stock -- and it seems to be off to a good start in that arena -- there are still a lot of regulatory hurdles to clear. And that is before we figure out if there ends up being any cannibalization between sports betting and predictions. I understand the excitement surrounding the stock, but I’m not rushing to buy today. Before you buy stock in DraftKings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and DraftKings wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool recommends Flutter Entertainment Plc. The Motley Fool has a disclosure policy. Stock Market Today, Aug. 7: DraftKings Surges 8% on Prediction-Market Growth After Q2 Results was originally published by The Motley Fool

DraftKings (DKNG) came out with quarterly earnings of $0.09 per share, missing the Zacks Consensus Estimate of $0.22 per share. This compares to earnings of $0.38 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -59.09%. A quarter ago, it was expected that this company would post earnings of $0.22 per share when it actually produced earnings of $0.2, delivering a surprise of -9.09%. Over the last four quarters, the company has not been able to surpass consensus EPS estimates. DraftKings, which belongs to the Zacks Gaming industry, posted revenues of $1.44 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 3.84%. This compares to year-ago revenues of $1.51 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. DraftKings shares have lost about 36.9% since the beginning of the year versus the S&P 500's gain of 12.8%. While DraftKings has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for DraftKings was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.11 on $1.42 billion in revenues for the coming quarter and $1.09 on $6.76 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Gaming is currently in the bottom 24% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Motorsport Games Inc. (MSGM), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of -97.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Motorsport Games Inc.'s revenues are expected to be $2.9 million, up 12% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DraftKings Inc. (DKNG) : Free Stock Analysis Report Motorsport Games Inc. (MSGM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

DraftKings reported second-quarter revenue of $1.44 billion, down 5% from a year earlier, as higher promotional spending and favorable results for bettors offset strong growth in customer activity. DraftKings kept its full-year 2026 outlook unchanged: revenue of $6.5 billion to $6.9 billion and adjusted core profit of $700 million to $900 million. Rival firm Flutter Entertainment cut full-year guidance earlier this week. Shares of DraftKings (DKNG) fell about 4% in after-hours trading on Thursday after the company reported a 5% drop in second-quarter revenue, while reaffirming full-year guidance and noting that its Predictions product is already growing faster than expected. DraftKings reported second-quarter revenue of $1.44 billion, down 5% from a year earlier, as higher promotional spending and favorable results for bettors offset strong growth in customer activity. Wall Street on average had expected the company to report revenue of $1.51 billion. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox Sports betting volume rose 15% to $13.1 billion. Monthly unique payers increased 9% to 3.6 million, reflecting solid new customer gains and retention across sportsbook and the newer Predictions product. Average revenue per monthly unique payer fell 13% and adjusted core profit came in at $114.6 million, down sharply from $300.6 million a year ago, and underwhelming analysts who expected $161.86 million on average. CEO Jason Robins said the core business showed real strength heading into the second half of the year. “We delivered a strong second quarter and enter the back half of the year with real momentum, as our core business grew across handle, users, and engagement,” he said. Robins pointed to the company’s Super App, now available nationwide, and the rapid growth of Predictions. “Predictions is already growing faster than we anticipated,” he said. Customer metrics for Predictions look similar to those of the sportsbook, giving DraftKings an edge in lifetime value and a clear playbook to innovate. He expressed confidence the company can “win the category this NFL season and beyond.” CFO Alan Ellingson said the core business remains on track to generate about $1 billion in adjusted core profit this year, giving the company flexibility to invest in Predictions. DraftKings kept its full-year 2026 outlook unchanged: revenue of $6.5 billion to $6.9 billion and adjusted core profit of $700 million to $900 million. DraftKings operates mobile sports betting in 27 states, Washington, D.C., and Puerto Rico, covering about 53% of the U.S. population. DraftKings rival Flutter Entertainment, owner of FanDuel, reported mixed results earlier this week. Flutter’s U.S. revenue fell 6% amid similar pressures from promotions and sports outcomes, while the company cut full-year guidance. Both operators are investing in prediction markets ahead of the NFL season. On Stocktwits, retail sentiment around DKNG stock rose from ‘bullish’ to ‘extremely bullish’ over the past 24 hours, while message volume increased from ‘high’ to ‘extremely high’ levels. A Stocktwits user said that DraftKings “is entering a key phase as strong user growth meets short term revenue pressure.” Another expects the stock to rally into the NFL season. DKNG stock has fallen 36% year-to-date. Read More: REPL Stock Slumps 11% After-Hours — What’s Driving The Selloff? For updates and corrections, email newsroom[at]stocktwits[dot]com. Anan Ashraf has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: Why S&P 500, Dow Futures Are Slipping Overnight After Wall Street’s Second Straight Day In The Red TTD Stock Crashes Overnight: CEO Says Trade Desk's Customers ‘Operating In Different Environment' PFE, MRK, SNY, MRNA In Focus As Trump Reportedly Eyes Executive Order On Vaccines And Autism