DraftKings cuts 2026 revenue guidance as Q3 net loss widens to $469m

DraftKings lowered its full-year 2026 revenue guidance and reported a wider third-quarter net loss on 30 September, as spending on its predictions business weighed on results. The stock fell sharply after the release.

CEO Jason Robins stayed upbeat on the longer-term outlook for predictions, even as investors marked the shares down to 12-month lows.

What happened

In the quarter ended 30 September, revenue grew 16% to $1.33 billion, an increase of $185 million on the same period a year earlier. DraftKings attributed the growth mainly to higher customer activity and a better sportsbook margin. Net loss widened to $469 million from $257 million, and adjusted EBITDA came in at -$317 million, against a loss of $126 million a year earlier.

By segment:

• Sports revenue was up 31.5%, reaching $784 million.
• iGaming revenue, from online casino games, rose 2.1% to $461 million.
• Other activities brought in $85 million, a fall of 12.5%.
• Sports consumer volume, which covers wagers and trades across the sportsbook and Predictions products, grew 22% to $13.9 billion.

In the quarter, DraftKings also stepped up marketing and promotional spending aimed at winning iGaming customers, and its customer acquisition spending was 76% higher than a year earlier.

The company cut its 2026 revenue guidance to $6.35 billion to $6.55 billion, from $6.5 billion to $6.9 billion. It raised its expected predictions investment for the year to between $650 million and $700 million, including a projected $175 million to $225 million in the fourth quarter.

Looking to 2027, DraftKings forecast revenue of $7.35 billion to $7.75 billion, with adjusted EBITDA of $800m to $1bn. Predictions are expected to add $650 million to $750 million of revenue, and that contribution would need a further $250 million to $350 million of adjusted EBITDA investment. The core business is forecast at $6.7 billion to $7 billion of revenue and $1.15 billion to $1.25 billion of adjusted EBITDA.

Robins said on the call that more than 1.6 million customers have engaged with the predictions offering this year, and Monthly Unique Payers rose 13% year on year in the quarter. According to the company, predictions customers are retaining and engaging at levels comparable with sportsbook customers. iGaming Business reported that shares fell about 22% in after-hours trading following the release and traded at $17.60 as of noon ET, down 26% on the day.

DraftKings ended the quarter with cash and cash equivalents of $1.1 billion, broadly unchanged from the start of the year. Total liabilities increased to $4.43 billion from $3.90 billion at the end of 2025, while stockholders' equity dropped to $180m from $631m.

On the call, Robins said the third quarter was a pivotal moment because the Predictions offering was now powering meaningful growth. CFO Alan Ellingson said the core business's free cash flow is being used to fund predictions growth at attractive payback periods.

Why it matters

Operators weighing their own predictions plans should note the cost DraftKings has disclosed: a projected $650 million to $700 million of investment in 2026, and a further $250 million to $350 million of adjusted EBITDA investment in 2027. Affiliates and media buyers working with US operators should check how this spending, and the 76% rise in customer acquisition spend, feeds into partner budgets and acquisition terms in the coming quarters.

The market reaction also suggests investors are pricing in competition from prediction market operators and brokerage firms. Flutter, the parent of FanDuel, missed Wall Street expectations on 4 November, and its shares have fallen more than 60% over 12 months, according to iGaming Business. Suppliers and partners tied to either group could face tighter spending decisions if guidance continues to be revised.

Operators that rely on event-contract revenue will need to monitor litigation closely, because the timing of any ruling affects how quickly their investment pays back.

What's next

Robins said the company still expects that cohort to pay back in four years or less, citing cross-sell into other products, including non-sports predictions.