DraftKings Q2 Earnings Call Highlights

Key Points

• 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.

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.

“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 outpaced plans

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.

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.

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.

Predictions business gains users and volume

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.

Investment discipline remains central to outlook

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.

iGaming and football season initiatives

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.”

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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