DraftKings NASDAQ: DKNG reported first-quarter 2026 results that exceeded management’s expectations, driven by continued strength in its core Sportsbook business and an increasing push into sports predictions.
First-quarter results and updated cadence commentary
Co-founder and CEO Jason Robins said DraftKings is “off to a fantastic start this year,” with first-quarter revenue up 17% year-over-year and surpassing $1.6 billion. Adjusted EBITDA increased 64% year-over-year to $168 million. Robins added that adjusted EBITDA “would have exceeded $200 million” if not for “significant investment in predictions and the launch of Sportsbook in Arkansas.”
Management reiterated full-year 2026 guidance of revenue between $6.5 billion and $6.9 billion and adjusted EBITDA between $700 million and $900 million.
During Q&A, Robins also provided early second-quarter indicators, citing “soft close” April results that included handle up 6% year-over-year, revenue up 22% year-over-year, and more than $100 million of adjusted EBITDA in April alone. Robins said the company had recorded “15 consecutive weeks of net revenue growth year-over-year.”
Sportsbook performance and operating efficiency
In prepared remarks, management said Sportsbook “led the way” in the quarter. Sportsbook revenue increased 24% year-over-year to $1.1 billion, supported by a 140-basis-point improvement in net revenue margin to 7.8%. Management also noted that parlay handle mix increased by nearly 300 basis points.
Management said revenue growth exceeded 20% across “nearly all major sports,” including the NBA and NCAA men’s basketball, attributing the performance to “continued enhancements to our offering and deeper media integrations.”
On costs, management highlighted improving efficiency. Adjusted gross margins increased by nearly 200 basis points year-over-year, and adjusted operating expenses increased only slightly excluding investments in predictions and the Arkansas launch. The company said “AI-first execution and streamlined teams” are boosting productivity, with some teams operating at “2 to 3 times last year’s output.”
Robins also discussed promotional efficiency in online sports betting, saying DraftKings has seen a “pretty stable competitive environment” and has focused “heavily on optimization.” He pointed to increasing hold rates and rising parlay mix as tailwinds, adding that he sees “a ton of runway left to increase parlay mix.”
Robins said outcomes in the first quarter were “slightly positive,” calling the benefit “very minor” and “in the $ tens of millions.”
Predictions strategy: super app integration, exchange rollout, and investment plans
Robins repeatedly described sports predictions as a strategic priority, calling the category “still in its 1st inning” and saying DraftKings intends to “execute with urgency and establish a leadership position in sports predictions before year-end.” He said predictions are now live in DraftKings’ flagship app, and as a result, predictions customer acquisition costs declined by more than 80% in April.
Robins shared several early operating metrics for predictions:
- More than double the markets available to trade, which he said is driving predictions volume per customer above Sportsbook handle per customer.
- In April, annualized predictions consumer volume exceeded $1 billion.
- Annualized total volume traded exceeded $2.3 billion, up 38% and 43% month-over-month, respectively.
DraftKings has also launched market making, which Robins said is “already generating a positive return” and later described as “profitable already” and “one of our fastest to profitability business lines we’ve ever launched.” He said the company expects to launch its proprietary exchange “in the coming weeks” and begin offering “combos.”
Looking ahead, Robins said the company expects to invest roughly $200 million to $300 million “all in on Pick6 this year,” with much of that spending on marketing and some on product and technology. He added that the bulk of that investment is expected “in the months ahead, especially in the back half of the year,” with some also in the latter part of the second quarter. He characterized the spending plan as flexible, noting the company is not committing to large fixed spend and will “follow the data.”
Beginning next quarter, DraftKings said it will report “sports revenue,” combining Sportsbook and sports predictions, which Robins said better reflects how the company plans to operate the business.
Customer behavior, responsible ecosystem, and product observations
Robins said early third-party data suggests predictions customers are “experiencing losses more quickly than Sportsbook customers,” which he said reinforces the need for “trust, consumer protections, and operator discipline.” In response to a separate question on the same topic, Robins said the issue is not necessarily hold but the “rate of loss,” and argued that liquidity in predictions markets is often supplied by “professional market makers” and institutions, which may not be fully understood by all consumers. He compared the dynamic to daily fantasy sports, where protecting the ecosystem is important because expert players can dominate the other side of peer-to-peer formats.
On early Pick6 customer characteristics, Robins said it is “very early” but that customers “look quite similar” to DraftKings’ Sportsbook users demographically and in spend patterns. He noted college basketball was “even heavier on the prediction side” than some other sports, while emphasizing the company is mindful that early adopters tend to be more avid customers.
iGaming focus, payments optimization, and legalization outlook
Robins acknowledged DraftKings has “lagged the market a little bit” in iGaming and said the company has recently “beefed up” its iGaming team and effort. Addressing slower iCasino net gaming revenue growth cited by an analyst, Robins said DraftKings is making changes to product and marketing and sees “a huge opportunity to accelerate” iGaming growth, though he emphasized it is “not something we’re counting on in order to hit our guide.”
He added that DraftKings had “overly focused on the OSB cross-sell” and not enough on “the iCasino-first, particularly the slots-first player.” As an example of product changes, Robins pointed to a feature called Flex Spins, describing it as a promotion that allows free spins on any game, rather than being tied to a single game.
On payments expense, Robins said the super app could improve “retention of money and less movement of money on and off the system,” which he said helps reduce payment costs tied to depositing and withdrawing. He said payment costs have been coming down through internal changes and renegotiated rates as volumes increase, and he sees continued opportunity to reduce payment costs in 2026 and beyond.
On legalization, Robins said predictions markets may be helping conversations around sports betting legalization, as states recognize consumers can access predictions products outside state frameworks. For iGaming, he cited momentum in the “DMV area,” noting Washington, D.C. is considering a proposal and Virginia came close after passing both chambers before failing in conference. He also mentioned Maryland and said he expects potential momentum in Midwestern states, naming Ohio next year as one to watch and describing Illinois as “always interesting.”
Robins also addressed advocacy spend in the quarter, saying it was not predictions-related and instead tied to an experiment involving a coalition and a Super PAC spending in various states during the election cycle.
Looking to a major sporting catalyst, Robins said he has “very high expectations” for the World Cup in terms of customer acquisition and engagement, though he was less certain it would be a major revenue driver compared with U.S. sports like the NFL and NBA. He also noted DraftKings recently added Spanish-language functionality ahead of the World Cup, which he said could be a differentiator in attracting incremental audiences.
DraftKings ended the call reiterating confidence in its roadmap, with Robins saying the company is “well-positioned for success” as it balances core profitability with increased investment aimed at scaling sports predictions.
About DraftKings NASDAQ: DKNG
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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