DraftKings Q3 Revenue Misses, 2026 Guidance Cut

DraftKings posted third-quarter revenue of $1.329 billion on Thursday, November 5. That is 16% more than the $1.144 billion it brought in a year earlier, but it landed below the analyst consensus of $1.398 billion reported by Benzinga and carried by Yahoo Finance. The adjusted loss came to 53 cents a share; analysts had penciled in 39 cents.

Shares dropped hard after the bell. Yahoo Finance recorded an 18.4% decline to $19.20, and Investing.com put the fall at roughly 20%. In its own release, the company credits the revenue gain to solid customer engagement and a better sportsbook net revenue margin.

What moved the stock was less the quarter itself than what comes next. DraftKings cut its 2026 guidance, and the money going into its Predictions product is the reason.

How The Quarter Broke Down

The net loss attributable to common stockholders reached $468.7 million, compared with a $256.8 million loss in the third quarter of 2025. Adjusted EBITDA was a loss of $316.9 million, wider than last year's $126.5 million loss.

Monthly unique payers climbed about 13% to 4.1 million, while average revenue per payer edged up about 3% to $109. Sports revenue — which DraftKings defines to include online and retail sportsbook plus prediction markets — rose 31.5% to $783.6 million at a 5.6% net revenue margin, up from 5.2% a year ago. iGaming revenue grew only 2.1% to $460.9 million, and other revenue slipped 12.5% to $84.5 million.

Mobile sports betting is now live in 27 states, Washington, D.C. and Puerto Rico, reaching about 53% of the US population, according to the company. iGaming operates in five states, roughly 11% of the population, and its Canadian products cover provinces holding about 51% of that country's population.

2026 Outlook Trimmed, First 2027 Guidance

DraftKings now projects 2026 revenue of $6.35 billion to $6.55 billion, down from a prior range of $6.5 billion to $6.9 billion, per Yahoo Finance. Adjusted EBITDA guidance sits at $175 million to $275 million, well under the earlier $700 million to $900 million.

Most of that revision comes from a bigger Adjusted EBITDA investment in Predictions — $650 million to $700 million — with $175 million to $225 million of it falling in the fourth quarter alone, the company says. Core-business Adjusted EBITDA for 2026 is guided at $875 million to $925 million, which DraftKings ties to further iGaming investment and somewhat customer-friendly sports results.

For 2027, the company introduced revenue guidance of $7.35 billion to $7.75 billion, up 17% at the midpoint, and Adjusted EBITDA of $800 million to $1.0 billion. The core business is expected to deliver $6.7 billion to $7.0 billion, a 4% to 9% gain over the midpoint of 2026 guidance, with core Adjusted EBITDA of $1.15 billion to $1.25 billion. Predictions is guided at $650 million to $750 million of revenue next year, alongside $250 million to $350 million of Adjusted EBITDA investment.

The release also cautions that Predictions revenue will be immaterial in 2026, since new-customer promotions will offset most of the gross revenue it brings in.

Predictions Takes Center Stage

Chief executive Jason Robins called the quarter a pivotal moment. The Predictions offering, he said, is now driving meaningful growth, with more than 1.6 million customers engaging with it so far this year. Chief financial officer Alan Ellingson said the core business throws off significant free cash flow, which is being used to fund Predictions at what he described as attractive payback periods.

That shift places DraftKings in territory regulators and competitors are watching closely. Our earlier coverage examined how quickly event contracts are growing on Kalshi and Polymarket, and that same market now shows up as a line item capable of moving a listed operator's guidance. DraftKings can also point to a track record on player protection, having expanded its responsible gaming tools for the NFL season.