TLDR
- DraftKings revenue rose 16% to $1.33 billion in the third quarter of 2026.
- Net loss widened to $468.7 million from $256.8 million a year earlier.
- Sales and marketing costs jumped to $605.7 million as the company pushed Predictions.
- The company expects to invest $650 million to $700 million in Predictions in 2026.
- DraftKings guided for 2027 revenue of $7.35 billion to $7.75 billion.
DraftKings is spending heavily to build its prediction markets business, and the cost showed up in its third quarter results. The company reported a net loss of $468.7 million for the three months ended September 30, 2026, up from $256.8 million a year earlier.
Revenue still grew. Total revenue rose 16% to $1.33 billion, compared with $1.14 billion in the same quarter of 2025.
The loss per share widened to 94 cents from 52 cents. Adjusted EBITDA, a measure the company uses to track operating performance, was a loss of $316.9 million versus a loss of $126.5 million last year.
Where the Money Went
The biggest jump in costs came from sales and marketing. That line rose to $605.7 million from $360.4 million a year ago, an increase of about 68%.
The company now expects to spend $650 million to $700 million on Predictions in 2026, measured in Adjusted EBITDA. It plans to spend $175 million to $225 million of that in the fourth quarter alone.
DraftKings said Predictions revenue will be immaterial this year. New customer promotions are expected to offset most of the gross revenue the product brings in.
The company runs Predictions through a subsidiary that offers event contracts under Commodity Futures Trading Commission oversight. Chief Executive Jason Robins said more than 1.6 million customers have used Predictions so far this year.
“The third quarter marked a pivotal moment for DraftKings, as the Predictions offering we have been building is now powering meaningful growth for our business,” Robins said.
Sports revenue, which includes the sportsbook and prediction markets, rose 31.5% to $783.6 million. Sports consumer volume climbed 21.9% to $13.9 billion, and the net revenue margin improved to 5.6% from 5.2%.
iGaming revenue grew 2.1% to $460.9 million. Other revenue fell 12.5% to $84.5 million.
Monthly unique payers rose about 13% to 4.1 million. Average revenue per payer increased $3 to $109.
Debt Rises as Guidance Shifts
The company updated its full-year 2026 outlook to revenue of $6.35 billion to $6.55 billion. It now sees Adjusted EBITDA of $175 million to $275 million, mainly because of higher Predictions spending.
The balance sheet also changed. Term B loans grew to $1.25 billion from $577 million at the end of 2025, while the company repurchased $300.4 million of convertible notes this year.
Stockholders’ equity fell to $179.6 million from $631.5 million. Cash from operations dropped to $63 million in the first nine months, down from $342 million a year earlier.
For 2027, DraftKings expects revenue of $7.35 billion to $7.75 billion, a 17% increase at the midpoint. It forecasts Adjusted EBITDA of $800 million to $1.0 billion.
That outlook includes $650 million to $750 million in Predictions revenue and $250 million to $350 million in Predictions investment. Chief Financial Officer Alan Ellingson said the core business is funding the push “at attractive payback periods.”
DraftKings offers mobile sports betting in 27 states, Washington, D.C., and Puerto Rico, covering about 53% of the U.S. population. Management scheduled a conference call for Friday, November 6, at 8:30 a.m. ET to discuss the results.
