DraftKings (NASDAQ: DKNG) turns Q1 2026 profit as revenue jumps 17%
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
DraftKings Inc. reported a profitable first quarter of 2026 as revenue and margins improved. Revenue for the three months ended March 31, 2026 was $1,646 million, up 17% from $1,409 million a year earlier, driven by efficient customer acquisition, strong engagement and a higher Sportsbook net revenue margin.
The company generated net income attributable to common stockholders of $21.1 million, compared with a net loss of $33.9 million in the prior‑year quarter, and diluted earnings per share of $0.03. Adjusted EBITDA rose to $167.9 million from $102.6 million, while Adjusted Diluted Earnings Per Share increased to $0.20 from $0.12, reflecting improved underlying profitability.
Monthly Unique Payers declined 4% to 4.2 million, mainly due to exiting the Texas lottery business, but excluding Lottery they grew 2%. Average revenue per MUP increased 21% to $131, supported by better Sportsbook net revenue margin. DraftKings reaffirmed full‑year 2026 guidance for revenue of $6.5–$6.9 billion and Adjusted EBITDA of $700–$900 million, and ended the quarter with $999 million of cash and cash equivalents.
Positive
- Profitable quarter with stronger margins: Q1 2026 revenue rose 17% to $1,646 million, net income reached $21.1 million versus a prior‑year loss, and Adjusted EBITDA increased to $167.9 million from $102.6 million, indicating improved operating leverage and profitability.
Negative
- None.
Insights
DraftKings delivered profitable growth in Q1 2026 and reaffirmed strong full‑year guidance.
DraftKings grew Q1 2026 revenue to $1,646 million, up 17% year over year, as improved Sportsbook net revenue margin lifted profitability. The business swung to net income of $21.1 million from a loss and posted Adjusted EBITDA of $167.9 million, showing better operating leverage.
Customer trends were mixed: Monthly Unique Payers fell 4% to 4.2 million, largely from the prior Lottery exit, but excluding Lottery, MUPs grew 2%. Average Revenue per MUP rose 21% to $131, indicating more revenue per active user.
Management maintained fiscal year 2026 guidance for revenue of $6.5–$6.9 billion and Adjusted EBITDA of $700–$900 million, underscoring confidence in scaling profitability. Operating cash flow remained negative at $(48.4) million, though this improved versus the prior year, and the company continued repurchasing stock, which contributed to a lower cash balance.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 Revenue: $1,646.1M
Q1 2026 Net Income: $21.1M
Q1 2026 Adjusted EBITDA: $167.9M
+5 more
8 metrics
Q1 2026 Revenue
$1,646.1M
Three months ended March 31, 2026; up 17% year over year
Q1 2026 Net Income
$21.1M
Net income attributable to common stockholders vs. $33.9M loss in 2025
Q1 2026 Adjusted EBITDA
$167.9M
Non-GAAP Adjusted EBITDA for three months ended March 31, 2026
Diluted EPS
$0.03
Diluted earnings per share Q1 2026 vs. $(0.07) in Q1 2025
Adjusted Diluted EPS
$0.20
Adjusted Diluted Earnings Per Share Q1 2026 vs. $0.12 in 2025
Monthly Unique Payers
4.2M
MUPs for Q1 2026, down 4% year over year
Average Revenue per MUP
$131
ARPMUP for Q1 2026, up 21% or $23 year over year
FY 2026 Revenue Guidance
$6.5B–$6.9B
Maintained full-year 2026 revenue outlook
Key Terms
Adjusted EBITDA, Monthly Unique Payers, Sportsbook Net Revenue Margin, Adjusted Diluted Earnings (Loss) Per Share, +2 more
6 terms
Adjusted EBITDA financial
"This press release includes Adjusted EBITDA and Adjusted Diluted Earnings (Loss) Per Share"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Monthly Unique Payers financial
"Monthly Unique Payers (“MUPs”) decreased 4% to 4.2 million in the three months ended March 31, 2026"
The number of distinct customers who make at least one payment within a given month, counted so each person is only included once even if they pay multiple times. It matters to investors because it shows how many real buyers a business relies on, revealing customer reach, growth or decline, and the stability of revenue—similar to counting how many different shoppers bought something at a store each month rather than total receipts.
Sportsbook Net Revenue Margin financial
"primarily due to improvement in Sportsbook Net Revenue Margin"
Sportsbook net revenue margin is the percentage of all money wagered that a betting operator actually keeps after paying out winning bets, giving refunds or bonuses, and covering direct betting-related costs. For investors it shows how efficiently a sportsbook converts customer bets into real revenue—similar to a store’s profit margin on every dollar of sales—and helps compare profitability and pricing strength across operators.
equity method investments financial
"Gain (loss) from equity method investments"
An equity method investment is an accounting approach used when a company owns a significant share of another company and can influence its decisions but does not fully control it; instead of listing the investment at cost, the investor records its share of the other company's profits or losses on its own income statement and adjusts the investment value on the balance sheet. For investors, this matters because it links the investor’s reported earnings and asset values directly to the financial performance of that partly-owned business, similar to how a partner’s gains affect a small business owner’s books.
non-GAAP effective tax rate financial
"the Company began applying an estimated non-GAAP effective tax rate"
A non-GAAP effective tax rate is an estimate of the percentage of a company’s profit that it pays in taxes after removing certain one-time items or accounting adjustments from reported earnings. Think of it like calculating a household’s typical monthly tax bill after excluding an unusual windfall or expense; it helps investors see the company’s recurring tax burden and compare operating performance across periods, but it can differ from the official GAAP tax rate and should be checked against the standardized figure.
Earnings Snapshot
Revenue: $1,646.1M · Guidance included
Q1 2026
Revenue
$1,646.1M
+16.8% year over year
Net income attributable to common stockholders
$21.1M
from $(33.9)M loss in Q1 2025
Adjusted EBITDA
$167.9M
from $102.6M in Q1 2025
Diluted EPS
$0.03
from $(0.07) in Q1 2025
Adjusted Diluted EPS
$0.20
from $0.12 in Q1 2025
Guidance
DraftKings expects fiscal year 2026 revenue of $6.5–$6.9 billion and Adjusted EBITDA of $700–$900 million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 8, 2026 (May 7, 2026)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (617 ) 986-6744
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 7, 2026, DraftKings Inc. (the “Company”) issued a press release announcing the Company’s financial results for the quarter ended March 31, 2026.
A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is hereby incorporated by reference in this Item 2.02. The information and exhibit contained in this Item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | |||||||
99.1 | Press Release, dated as of May 7, 2026, reporting financial results for the quarter ended March 31, 2026. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 8, 2026
| DRAFTKINGS INC. | ||||||||
| By: | /s/ R. Stanton Dodge | |||||||
| Name: | R. Stanton Dodge | |||||||
| Title: | Chief Legal Officer and Secretary | |||||||
DraftKings Reports First Quarter Revenue of $1,646 Million
Boston, MA – May 7, 2026 — DraftKings Inc. (Nasdaq: DKNG) (“DraftKings” or the “Company”) today announced its first quarter 2026 financial results. The Company also posted a first quarter 2026 business update and an earnings presentation on the Financials section of its website at ir.aboutdraftkings.com.
First Quarter 2026 Highlights
For the three months ended March 31, 2026, DraftKings reported revenue of $1,646 million, an increase of $237 million, or 17%, compared to $1,409 million during the same period in 2025. The increase in the Company’s first quarter 2026 revenue was driven primarily by efficient customer acquisition over the past year and continued healthy customer engagement, as well as higher Sportsbook net revenue margin.
“We are off to a fantastic start to the year as our first quarter results exceeded our expectations,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “Our core business is strong, and profitability is inflecting. That gives us the firepower to press our advantage in Predictions. With our Super App, market making capabilities, proprietary exchange, and combos coming together, we intend to establish a leadership position in Sports Predictions before year-end.”
“The business continues to scale efficiently as we grow revenue, expand profitability, and invest in high-return opportunities,” said Alan Ellingson, DraftKings’ Chief Financial Officer. “We continue to expect fiscal year 2026 revenue of $6.5 billion to $6.9 billion and Adjusted EBITDA of $700 million to $900 million.”
Continued Strong Customer Acquisition, Retention, and Engagement
•Monthly Unique Payers (“MUPs”) decreased 4% to 4.2 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily reflecting lower MUPs from Lottery following our exit from Texas in 2025. Excluding the impact of Lottery, MUPs increased by 2% in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, due to strong customer retention and acquisition across our Sportsbook and iGaming offerings.
•Average Revenue per MUP (“ARPMUP”) increased 21% or $23 to $131 for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to improvement in Sportsbook Net Revenue Margin.
•Detailed financial data and other information for the first quarter of 2026 is available in the financial statements set forth below under the caption “Financial and Operational Results.”
Fiscal Year 2026 Guidance
•DraftKings is maintaining its fiscal year 2026 revenue guidance range of $6.5 billion to $6.9 billion and fiscal year 2026 Adjusted EBITDA guidance range of $700 million to $900 million.
Mobile Sports Betting and iGaming Footprint
•DraftKings is live with mobile sports betting in 27 states, Washington, D.C., and Puerto Rico representing approximately 53% of the U.S. population.
•DraftKings is also live with iGaming in 5 states, representing approximately 11% of the U.S. population.
•DraftKings is live with its Sportsbook and iGaming offerings in Ontario, Canada, representing approximately 40% of Canada’s population.
Webcast and Conference Call Details
As previously announced, DraftKings will host a conference call and audio webcast tomorrow, Friday, May 8, 2026, from 8:30 a.m. to 9:15 a.m. ET, during which management will discuss the Company’s results and provide commentary on business performance. A question-and-answer session will follow the prepared remarks.
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To listen to the audio webcast and live question and answer session, please visit DraftKings’ Financials section of its website at ir.aboutdraftkings.com. A live audio webcast of the earnings conference call will be available on the Company’s website at ir.aboutdraftkings.com, along with a copy of this earnings press release, the Company’s Quarterly Report on Form 10-Q, a first quarter 2026 business update and a slide presentation. The audio webcast will be available on the Company’s investor relations website until 11:59 p.m. ET on June 30, 2026.
Financial and Operational Results
DraftKings’ first quarter 2026 financial results, as well as the financial results for each comparative period, and certain operational results are presented below:
2
DRAFTKINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value)
| March 31, 2026 | |||||||||||
| (Unaudited) | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 999,404 | $ | 1,127,545 | |||||||
| Restricted cash | 8,746 | 7,601 | |||||||||
| Cash reserved for users | 378,670 | 469,449 | |||||||||
| Accounts receivable | 86,119 | 105,577 | |||||||||
| Prepaid expenses and other current assets | 104,790 | 104,837 | |||||||||
| Total current assets | 1,577,729 | 1,815,009 | |||||||||
| Property and equipment, net | 53,164 | 51,081 | |||||||||
| Intangible assets, net | 868,061 | 889,201 | |||||||||
| Goodwill | 1,597,647 | 1,597,647 | |||||||||
| Operating lease right-of-use assets | 78,428 | 49,810 | |||||||||
| Equity method investments | 26,150 | 18,938 | |||||||||
| Deposits and other non-current assets | 106,353 | 109,098 | |||||||||
| Total assets | $ | 4,307,532 | $ | 4,530,784 | |||||||
| Liabilities and Stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 703,994 | $ | 785,441 | |||||||
| Liabilities to users | 811,630 | 935,001 | |||||||||
| Operating lease liabilities, current portion | 10,942 | 9,795 | |||||||||
| Other current liabilities | 21,858 | 25,234 | |||||||||
| Total current liabilities | 1,548,424 | 1,755,471 | |||||||||
| Convertible notes, net of issuance costs | 1,259,755 | 1,259,096 | |||||||||
| Term B Loan, net of issuance costs | 575,556 | 576,544 | |||||||||
| Operating lease liabilities | 71,597 | 44,391 | |||||||||
| Long-term income tax liabilities | 92,903 | 91,618 | |||||||||
| Other long-term liabilities | 154,249 | 172,203 | |||||||||
| Total liabilities | $ | 3,702,484 | $ | 3,899,323 | |||||||
Stockholders’ equity: | |||||||||||
Class A common stock, $0.0001 par value; 900,000 shares authorized as of March 31, 2026 and December 31, 2025; 538,297 and 533,296 shares issued and 495,764 and 495,053 outstanding as of March 31, 2026 and December 31, 2025, respectively | $ | 53 | $ | 52 | |||||||
Class B common stock, $0.0001 par value; 900,000 shares authorized as of March 31, 2026 and December 31, 2025; 393,014 shares issued and outstanding as of March 31, 2026 and December 31, 2025 | 39 | 39 | |||||||||
Treasury stock, at cost; 42,533 and 38,243 shares as of March 31, 2026 and December 31, 2025, respectively | (1,515,376) | (1,392,433) | |||||||||
| Additional paid-in capital | 8,500,292 | 8,424,833 | |||||||||
| Accumulated deficit | (6,416,448) | (6,437,518) | |||||||||
| Accumulated other comprehensive income | 36,488 | 36,488 | |||||||||
| Total stockholders’ equity | $ | 605,048 | $ | 631,461 | |||||||
| Total liabilities and stockholders’ equity | $ | 4,307,532 | $ | 4,530,784 | |||||||
3
DRAFTKINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except per share data)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Revenue | $ | 1,646,076 | $ | 1,408,806 | ||||||||||
| Cost of revenue | 949,385 | 843,803 | ||||||||||||
| Sales and marketing | 401,734 | 343,680 | ||||||||||||
| Product and technology | 123,176 | 103,260 | ||||||||||||
| General and administrative | 165,934 | 164,394 | ||||||||||||
| Income (loss) from operations | 5,847 | (46,331) | ||||||||||||
| Other income (expense): | ||||||||||||||
| Interest income (expense), net | (5,739) | 4,395 | ||||||||||||
| Gain (loss) on remeasurement of warrant liabilities | — | 2,495 | ||||||||||||
| Other gain (loss), net | 22,814 | 22 | ||||||||||||
| Income (loss) before income tax and equity method investments | 22,922 | (39,419) | ||||||||||||
| Income tax provision (benefit) | 6,369 | (5,600) | ||||||||||||
| (Gain) loss from equity method investments | (4,517) | 45 | ||||||||||||
| Net income (loss) attributable to common stockholders | $ | 21,070 | $ | (33,864) | ||||||||||
| Earnings (loss) per share attributable to common stockholders: | ||||||||||||||
| Basic | $ | 0.04 | $ | (0.07) | ||||||||||
| Diluted | $ | 0.03 | $ | (0.07) | ||||||||||
DRAFTKINGS INC.
NON-GAAP FINANCIAL MEASURES
(Unaudited)
(Amounts in thousands, except per share data)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Adjusted EBITDA | $ | 167,852 | $ | 102,630 | |||||||
| Adjusted Diluted Earnings (Loss) Per Share | $ | 0.20 | $ | 0.12 | |||||||
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DRAFTKINGS INC.
REVENUE DISAGGREGATION
(Unaudited)
(Amounts in thousands, except percentages)
| Three Months Ended March 31, | |||||||||||||||||||||||
| (amounts in thousands) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Sportsbook Handle | $ | 14,083,061 | $ | 13,880,391 | $ | 202,670 | 1.5 | % | |||||||||||||||
| Sportsbook Revenue | 1,094,874 | 881,957 | 212,917 | 24.1 | % | ||||||||||||||||||
| Sportsbook Net Revenue Margin | 7.8% | 6.4% | N/A | N/A | |||||||||||||||||||
| Sportsbook Revenue | $ | 1,094,874 | $ | 881,957 | $ | 212,917 | 24.1 | % | |||||||||||||||
| iGaming Revenue | 461,300 | 423,471 | 37,829 | 8.9 | % | ||||||||||||||||||
| Other Revenue | 89,902 | 103,378 | (13,476) | (13.0) | % | ||||||||||||||||||
| Total Revenue | $ | 1,646,076 | $ | 1,408,806 | $ | 237,270 | 16.8 | % | |||||||||||||||
5
DRAFTKINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash Flows from Operating Activities: | |||||||||||
| Net income (loss) attributable to common stockholders | $ | 21,070 | $ | (33,864) | |||||||
| Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | 71,661 | 70,116 | |||||||||
| Non-cash interest (income) expense, net | 1,303 | 276 | |||||||||
| Stock-based compensation | 65,215 | 78,846 | |||||||||
| (Gain) loss on remeasurement of warrant liabilities | — | (2,495) | |||||||||
| (Gain) loss from equity method investment | (4,517) | 45 | |||||||||
| Deferred income taxes | (215) | 826 | |||||||||
| Other non-cash (gain) loss, net | (22,656) | 2,499 | |||||||||
| Change in operating assets and liabilities, net of effect of acquisitions: | |||||||||||
| Accounts receivable | 19,458 | (8,738) | |||||||||
| Prepaid expenses and other current assets | 46 | (43,514) | |||||||||
| Deposits and other non-current assets | 1,143 | 363 | |||||||||
| Accounts payable and accrued expenses | (80,999) | (68,950) | |||||||||
| Liabilities to users | (123,371) | (116,397) | |||||||||
| Long-term income tax liability | 1,285 | (932) | |||||||||
| Other long-term liabilities | 2,140 | 2,903 | |||||||||
| Net cash flows provided by (used in) operating activities | $ | (48,437) | $ | (119,016) | |||||||
| Cash Flows from Investing Activities: | |||||||||||
| Purchases of property and equipment | $ | (7,085) | $ | (2,647) | |||||||
| Cash paid for internally developed software costs | (37,070) | (31,248) | |||||||||
| Cash paid for gaming market access and licenses | (1,060) | (1,629) | |||||||||
| Other investing activities | (2,995) | (3,495) | |||||||||
| Net cash flows provided by (used in) investing activities | $ | (48,210) | $ | (39,019) | |||||||
| Cash Flows from Financing Activities: | |||||||||||
| Proceeds from Term B Loan, net | $ | — | $ | 588,116 | |||||||
| Repayment of Term B Loan principal | (1,500) | — | |||||||||
| Purchase of treasury stock for RSU withholding | (24,303) | (74,318) | |||||||||
| Purchase of treasury stock under Stock Repurchase Program | (98,640) | (142,278) | |||||||||
| Proceeds from exercise of stock options | 3,315 | 3,396 | |||||||||
| Other financing activities | — | (2,093) | |||||||||
| Net cash flows provided by (used in) financing activities | $ | (121,128) | $ | 372,823 | |||||||
| Net increase (decrease) in cash and cash equivalents, restricted cash, and cash reserved for users | (217,775) | 214,788 | |||||||||
| Cash and cash equivalents, restricted cash, and cash reserved for users at the beginning of period | 1,604,595 | 1,330,193 | |||||||||
| Cash and cash equivalents, restricted cash, and cash reserved for users at the end of period | $ | 1,386,820 | $ | 1,544,981 | |||||||
| Disclosure of cash and cash equivalents, restricted cash, and cash reserved for users | |||||||||||
| Cash and cash equivalents | $ | 999,404 | $ | 1,119,740 | |||||||
| Restricted cash | 8,746 | 16,752 | |||||||||
| Cash reserved for users | 378,670 | 408,489 | |||||||||
| Cash and cash equivalents, restricted cash, and cash reserved for users at the end of period | $ | 1,386,820 | $ | 1,544,981 | |||||||
| Supplemental Disclosure of Noncash Investing and Financing Activities: | |||||||||||
| Decrease of warrant liabilities from cashless exercise of warrants | $ | — | $ | 8,973 | |||||||
| Stock-based compensation capitalized to internally developed software costs | 7,087 | 6,184 | |||||||||
| Supplemental Disclosure of Cash Activities: | |||||||||||
| (Decrease) increase in cash reserved for users | $ | (90,779) | $ | (116,918) | |||||||
| Cash paid for interest | 8,224 | 3,139 | |||||||||
| Cash paid for income taxes, net of refunds | 412 | 1,850 | |||||||||
Non-GAAP Financial Measures
This press release includes Adjusted EBITDA and Adjusted Diluted Earnings (Loss) Per Share, which are non-GAAP financial measures that DraftKings uses to supplement its results presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company believes Adjusted EBITDA and Adjusted Diluted Earnings (Loss) Per Share are useful in evaluating its operating performance, similar to measures reported by its publicly-
6
listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted Diluted Earnings (Loss) Per Share are not intended to be substitutes for any GAAP financial measures, and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
DraftKings defines and calculates Adjusted EBITDA as net income (loss) before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; and other non-recurring and non-operating costs or income, as described in the reconciliation below.
DraftKings defines and calculates Adjusted Diluted Earnings (Loss) Per Share as diluted earnings (loss) per share attributable to common stockholders adjusted for the impact of amortization of acquired intangible assets; discrete tax benefits attributed to acquisitions; stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; other non-recurring and non-operating costs or income; and the tax impact of adjusting items, as described in the reconciliation below.
DraftKings includes these non-GAAP financial measures because they are used by management to evaluate the Company’s core operating performance and trends and to make decisions regarding the allocation of capital and new investments. Adjusted EBITDA and Adjusted Diluted Earnings (Loss) Per Share exclude certain expenses that are required in accordance with GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of depreciation and amortization, remeasurement of warrant liabilities and stock-based compensation), or non-operating items which are not related to the Company’s underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs).
The unaudited table below presents the Company’s Adjusted EBITDA reconciled to its net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP, for the periods indicated:
| Three Months Ended March 31, | |||||||||||
| (amounts in thousands) | 2026 | 2025 | |||||||||
| Net income (loss) | $ | 21,070 | $ | (33,864) | |||||||
| Adjusted for: | |||||||||||
Depreciation and amortization (1) | 71,661 | 70,116 | |||||||||
| Interest (income) expense, net | 5,739 | (4,395) | |||||||||
| Income tax (benefit) provision | 6,369 | (5,600) | |||||||||
Stock-based compensation (2) | 65,215 | 78,846 | |||||||||
Transaction-related costs (3) | — | — | |||||||||
Litigation, settlement, and related costs (4) | — | — | |||||||||
Advocacy and other related legal expenses (5) | 26,363 | — | |||||||||
| Loss (gain) on remeasurement of warrant liabilities | — | (2,495) | |||||||||
Other non-recurring costs and non-operating costs (income) (6) | (28,565) | 22 | |||||||||
| Adjusted EBITDA | $ | 167,852 | $ | 102,630 | |||||||
(1)The amounts include the amortization of acquired intangible assets of $37.6 million and $42.7 million for the three months ended March 31, 2026 and 2025, respectively.
(2)Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans.
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(3)Includes capital markets advisory, consulting, accounting and legal expenses related to the evaluation, negotiation, and consummation of transactions and offerings that are under consideration, pending, or completed, as well as integration costs related to acquisitions.
(4)Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our ordinary-course business operations.
(5)Reflects non-recurring and non-ordinary course costs relating to advocacy efforts primarily in pursuit of legalization of DraftKings offerings. For the three months ended March 31, 2026, this spend primarily relates to legislative efforts for legalizing iGaming, supporting a ballot measure for legalizing Sportsbook, and other advocacy activities related to certain states. Advocacy and legal expenses incurred in the ordinary course of business have not been adjusted in this measure.
(6)Primarily includes the change in fair value of certain assets and liabilities, including contingent consideration, as well as our equity method share of investee’s gains and losses and other costs relating to non-recurring and non-operating items.
The unaudited table below presents the Company’s Adjusted Diluted Earnings (Loss) Per Share reconciled to its diluted earnings (loss) per share attributable to common stockholders, which is the most directly comparable financial measure calculated in accordance with GAAP, for the periods indicated:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Diluted earnings (loss) per share attributable to common stockholders | $ | 0.03 | $ | (0.07) | |||||||
| Adjusted for: | |||||||||||
Amortization of acquired intangible assets (1) | 0.07 | 0.09 | |||||||||
Stock-based compensation (2) | 0.13 | 0.16 | |||||||||
Transaction-related costs (3) | — | — | |||||||||
Litigation, settlement, and related costs (4) | — | — | |||||||||
Advocacy and other related legal expenses (5) | 0.05 | — | |||||||||
| Loss (gain) on remeasurement of warrant liabilities | — | (0.01) | |||||||||
| Other non-recurring and non-operating costs (income) | (0.04) | — | |||||||||
Tax impact of adjusting items (6) | (0.05) | (0.05) | |||||||||
| Adjusted Diluted Earnings (Loss) Per Share* | $ | 0.20 | $ | 0.12 | |||||||
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* Weighted average diluted number of shares used to calculate Adjusted Diluted Earnings (Loss) Per Share for the three months ended March 31, 2026 and 2025 was 510.6 million and 493.3 million, respectively; totals may not add due to rounding.
(1)The amounts include the amortization of acquired intangible assets of $37.6 million and $42.7 million for the three months ended March 31, 2026 and 2025, respectively.
(2)Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans.
(3)Includes capital markets advisory, consulting, accounting and legal expenses related to the evaluation, negotiation, and consummation of transactions and offerings that are under consideration, pending, or completed, as well as integration costs related to acquisitions.
(4)Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our ordinary-course business operations.
(5)Reflects non-recurring and non-ordinary course costs relating to advocacy efforts primarily in pursuit of legalization of DraftKings offerings. For the three months ended March 31, 2026, this spend primarily relates to legislative efforts for legalizing iGaming, supporting a ballot measure for legalizing Sportsbook, and other advocacy activities related to certain states. Advocacy and legal expenses incurred in the ordinary course of business have not been adjusted in this measure.
(6)Beginning in the first quarter of 2025, the Company began applying an estimated non-GAAP effective tax rate, which was 23% in 2025 and is 25% as of the first quarter of 2026. The non-GAAP effective tax rate reflects the non-GAAP tax provision commensurate with the Company’s level of non-GAAP profitability, which was determined after adjusting for the non-GAAP adjustments presented above and excluding the impact of changes in the valuation allowance.
Information reconciling forward-looking fiscal year 2026 Adjusted EBITDA guidance to its most directly comparable GAAP financial measure, net income (loss), is unavailable to DraftKings without unreasonable effort due to, among other things, certain items required for such reconciliation being outside of DraftKings’ control and/or not being able to be reasonably predicted. Preparation of such reconciliation would require a forward-looking balance sheet, statement of income, and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. DraftKings provides a range for its Adjusted EBITDA forecast that it believes will be achieved; however, the Company cannot provide any assurance that it can predict all of the components of the Adjusted EBITDA calculation. DraftKings provides a forecast for Adjusted EBITDA because it believes that Adjusted EBITDA, when
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viewed with DraftKings’ results calculated in accordance with GAAP, provides useful information for the reasons noted above. However, Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income (loss) or cash flow from operating activities or as an indicator of operating performance or liquidity.
About DraftKings
DraftKings Inc. is a digital sports and gaming company created to be the Ultimate Host and fuel the competitive spirit of sports fans with platforms that range across daily fantasy, regulated gaming, prediction markets and digital media. Headquartered in Boston and launched in 2012 by Jason Robins, Matt Kalish and Paul Liberman, DraftKings is the only U.S.-based vertically integrated sports betting operator. DraftKings’ mission is to make life more exciting by responsibly creating the world’s favorite real-money games, betting experiences and event contracts trading. DraftKings Sportsbook is live with mobile and/or retail sports betting operations pursuant to regulations in 30 states, Washington, D.C., Puerto Rico, and Ontario, Canada. The Company operates iGaming pursuant to regulations in five states and in Ontario, Canada under its DraftKings brand and pursuant to regulations in four states and in Ontario, Canada, under its Golden Nugget Online Gaming brand. DraftKings also owns Jackpocket, the leading digital lottery courier app in the United States. DraftKings’ Fantasy platform is available in 44 states, Washington, D.C., and certain Canadian provinces. DraftKings' wholly-owned subsidiary GUS III Inc. (d/b/a DraftKings Predictions) also operates DraftKings Predictions, offering federally regulated event contracts under CFTC oversight. DraftKings is both an official sports betting and daily fantasy partner of the NHL, PGA TOUR and WNBA, as well as an official daily fantasy partner of NASCAR, an official sports betting partner of the NBA and an authorized gaming operator of MLB. In addition, DraftKings owns and operates DraftKings Network, a multi-platform content ecosystem. DraftKings is committed to delivering responsible engagement tools and resources, while focusing on integrity and customer education.
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Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements about the Company and its industry that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release, including statements regarding guidance, DraftKings’ future results of operations or financial condition, strategic plans and focus, customer growth and engagement, offering initiatives, and the objectives and expectations of management for future operations (including launches in new jurisdictions and the expected timing thereof), are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “confident,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “going to,” “intend,” “may,” “plan,” “poised,” “potential,” “predict,” “project,” “propose,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions, or by statements of vision, strategy or outlook. DraftKings cautions you that the foregoing may not include all of the forward-looking statements made in this press release.
You should not rely on forward-looking statements as predictions of future events. DraftKings has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends, including the current macroeconomic environment, that it believes may affect its business, financial condition, results of operations, and prospects. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside DraftKings’ control and that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include, but are not limited to, DraftKings’ ability to manage growth; DraftKings’ ability to execute its business plan and meet its projections, including growth and execution in the emerging prediction markets category; potential litigation involving DraftKings; changes in applicable laws or regulations, particularly with respect to gaming and the regulatory status of prediction markets and event contracts; general economic and market conditions impacting demand for DraftKings’ offerings and services; economic and market conditions in the media, gaming, and software industries in the markets in which DraftKings operates; market and global conditions and economic factors, as well as the potential impact of general economic conditions, and the potential impact of new and existing laws, regulations, or policies, including those relating to tariffs, import/export, or trade restrictions, inflation, rising interest rates and instability in the banking system, on DraftKings’ liquidity, operations and personnel, as well as the risks, uncertainties, and other factors described in “Risk Factors” in DraftKings’ filings with the Securities and Exchange Commission (the “SEC”), which are available on the SEC’s website at www.sec.gov. Additional information will be made available in other filings that DraftKings makes from time to time with the SEC. The forward-looking statements contained herein are based on management’s current expectations and beliefs and speak only as of the date hereof, and DraftKings makes no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations, except as required by law.
Contacts
Media:
Media@draftkings.com
@DraftKingsNews
Investors:
Investors@draftkings.com
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FAQ
How did DraftKings (DKNG) perform financially in Q1 2026?
DraftKings generated Q1 2026 revenue of $1,646 million, up 17% from $1,409 million a year earlier. The company recorded net income of $21.1 million, reversing a prior‑year loss of $33.9 million, and reported Adjusted EBITDA of $167.9 million.
How are DraftKings’ customer metrics trending in Q1 2026?
Monthly Unique Payers for DraftKings were 4.2 million, a 4% decline year over year, mainly from exiting Lottery in Texas. Excluding Lottery, MUPs rose 2%. Average Revenue per MUP increased 21%, or $23, reaching $131, helped by improved Sportsbook net revenue margin.
What guidance did DraftKings give for fiscal year 2026?
DraftKings reaffirmed its fiscal 2026 guidance, expecting revenue of $6.5 billion to $6.9 billion and Adjusted EBITDA of $700 million to $900 million. This outlook reflects management’s expectation of continued revenue growth and expanding profitability across its online sports betting and iGaming operations.
How strong is DraftKings’ liquidity position after Q1 2026?
At March 31, 2026, DraftKings held $999.4 million in cash and cash equivalents and $378.7 million of cash reserved for users. Total assets were $4.31 billion versus total liabilities of $3.70 billion, resulting in stockholders’ equity of $605.0 million.
What drove DraftKings’ revenue growth in Q1 2026?
Revenue growth to $1,646 million was primarily driven by efficient customer acquisition, continued healthy engagement, and a higher Sportsbook net revenue margin. Sportsbook revenue rose to $1,094.9 million, up 24.1%, while iGaming revenue grew 8.9% to $461.3 million.