DraftKings (NASDAQ:DKNG) Announces Earnings Results

Key Points

• DraftKings beat earnings expectations, reporting $0.09 in EPS versus a $0.02 consensus estimate, but revenue of $1.44 billion fell short of the $1.51 billion forecast and declined 4.6% year over year.
• Core business momentum remained strong, with sportsbook handle up 11%, sports consumer volume up 15% and monthly unique payers up 9%. The company maintained its 2026 revenue guidance of $6.5 billion–$6.9 billion and Adjusted EBITDA guidance of $700 million–$900 million.
• Predictions is expanding rapidly, surpassing 600,000 customers year to date and increasing annualized traded volume nearly fivefold from April to July. However, promotional spending and unfavorable sports outcomes contributed to a $67.6 million net loss for the quarter.

DraftKings (NASDAQ:DKNG - Get Free Report) announced its quarterly earnings data on Friday. The company reported $0.09 EPS for the quarter, beating the consensus estimate of $0.02 by $0.07, Briefing.com reports. The business had revenue of $1.44 billion for the quarter, compared to the consensus estimate of $1.51 billion. DraftKings had a negative return on equity of 10.88% and a negative net margin of 2.68%.The business's revenue was down 4.6% on a year-over-year basis. During the same period in the previous year, the business earned $0.30 earnings per share.

Here are the key takeaways from DraftKings' conference call:

• Core business momentum strengthened, with sportsbook handle up 11% year over year, sports consumer volume up 15%, and monthly unique payers growing 9%. Management said the core business is on track to generate approximately $1 billion in Adjusted EBITDA in 2026.
• DraftKings reported $115 million of second-quarter Adjusted EBITDA and maintained its 2026 revenue guidance of $6.5 billion-$6.9 billion and Adjusted EBITDA guidance of $700 million-$900 million, despite continued investment in predictions.
• The predictions offering exceeded expectations, attracting more than 600,000 customers year to date and growing annualized traded volume nearly fivefold from April to July. DraftKings expects its vertically integrated brokerage, exchange, and market-making model to improve long-term customer economics.
• Customer acquisition increased nearly 75% year over year, prompting DraftKings to spend about 10% more than planned, although underlying acquisition costs were approximately 25% better than expected. Management may increase or reallocate spending if customer-acquisition returns remain attractive.
• iGaming showed early signs of recovery, supported by the Lightning Link launch and Flex Spins feature, with customer acquisition stronger than expected and market share stabilizing after several quarters of declines.

DraftKings Price Performance

NASDAQ DKNG traded up $1.86 during trading on Friday, hitting $24.03. 37,754,843 shares of the stock traded hands, compared to its average volume of 12,578,895. The company has a market capitalization of $11.92 billion, a P/E ratio of -63.24 and a beta of 1.66. The firm has a 50-day simple moving average of $25.37 and a 200-day simple moving average of $24.97. The company has a quick ratio of 1.02, a current ratio of 1.02 and a debt-to-equity ratio of 3.03. DraftKings has a 12-month low of $20.46 and a 12-month high of $48.78.

Insider Buying and Selling

In other news, Director Woodrow Levin sold 34,234 shares of the company's stock in a transaction that occurred on Monday, May 18th. The stock was sold at an average price of $25.71, for a total transaction of $880,156.14. Following the sale, the director directly owned 29,820 shares of the company's stock, valued at $766,672.20. This represents a 53.45% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, insider R Stanton Dodge sold 62,500 shares of the firm's stock in a transaction on Thursday, June 11th. The shares were sold at an average price of $29.68, for a total transaction of $1,855,000.00. Following the completion of the transaction, the insider directly owned 556,258 shares of the company's stock, valued at approximately $16,509,737.44. This trade represents a 10.10% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 97,596 shares of company stock worth $2,756,991. Corporate insiders own 47.18% of the company's stock.

Hedge Funds Weigh In On DraftKings

A number of institutional investors and hedge funds have recently made changes to their positions in the business. Sivia Capital Partners LLC purchased a new stake in shares of DraftKings in the second quarter worth approximately $603,000. Main Street Financial Solutions LLC purchased a new position in DraftKings in the 4th quarter worth about $230,000. Magnetar Financial LLC bought a new stake in DraftKings during the 4th quarter valued at about $227,000. PCM Encore LLC purchased a new stake in DraftKings in the 4th quarter valued at about $256,000. Finally, Banco Santander S.A. purchased a new stake in shares of DraftKings in the fourth quarter valued at approximately $253,000. 37.70% of the stock is owned by hedge funds and other institutional investors.

Trending Headlines about DraftKings

Here are the key news stories impacting DraftKings this week:

• Positive Sentiment: DraftKings’ Predictions platform is expanding rapidly ahead of football season. CEO Jason Robins said annualized volume increased to approximately $11 billion in July from $2.3 billion in April, reinforcing the company’s strategy to become a broader nationwide sports-commerce platform. Prediction markets take center stage in latest round of quarterly earnings reports
• Positive Sentiment: Management said the core business remains positioned to generate roughly $1 billion in adjusted profit this year, providing flexibility to invest in Predictions. DraftKings also reaffirmed its full-year revenue outlook of $6.5 billion to $6.9 billion. DKNG Stock Slips After-Hours As Q2 Earnings Disappoint
• Positive Sentiment: Benchmark raised its DraftKings price target to $30 from $29 and maintained a Buy rating, citing potential upside from the Predictions rollout and the upcoming NFL season. DraftKings price target raised by Benchmark
• Neutral Sentiment: Second-quarter results were mixed: DraftKings reported $1.44 billion in revenue versus approximately $1.51 billion expected, while earnings per share of $0.09 exceeded the consensus estimate cited by some data providers. Full-year guidance was unchanged. DraftKings Reports Second Quarter Results
• Negative Sentiment: Revenue declined 4.6% year over year, and the company swung to a $67.6 million net loss from $157.9 million of profit a year earlier. Heavy promotional activity, along with unfavorable sports outcomes including the Knicks’ title run and World Cup results, pressured quarterly results. DraftKings Second-Quarter Revenue Falls, Hurt by Promotions

Analyst Upgrades and Downgrades

Several research analysts have weighed in on the company. Stephens started coverage on DraftKings in a research note on Friday, April 24th. They issued an "overweight" rating for the company. Raymond James Financial upgraded shares of DraftKings from a "market perform" rating to an "outperform" rating in a research report on Friday, April 24th. Susquehanna lowered their target price on shares of DraftKings from $32.00 to $31.00 and set a "positive" rating on the stock in a report on Wednesday, July 1st. Needham & Company LLC reissued a "buy" rating and issued a $35.00 target price on shares of DraftKings in a report on Monday, May 11th. Finally, Jefferies Financial Group restated a "buy" rating on shares of DraftKings in a research report on Wednesday, June 10th. One investment analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating, eight have given a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average price target of $34.14.

DraftKings Company Profile

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.

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