DraftKings’ fourth-quarter results met Wall Street’s revenue expectations but fell short on non-GAAP profit, as the market reacted sharply to management’s cautious outlook. CEO Jason Robins described the quarter as a “high note,” citing strong execution in core Sportsbook and the scaling of new offerings like Predictions. However, he also acknowledged that customer acquisition rates had normalized and that performance was shaped by both improved cohort economics and an evolving promotional environment.
Is now the time to buy DKNG? Find out in our full research report (it’s free for active Edge members).
DraftKings (DKNG) Q4 CY2025 Highlights:
- Revenue: $1.99 billion vs analyst estimates of $1.99 billion (42.8% year-on-year growth, in line)
- Adjusted EPS: $0.36 vs analyst expectations of $0.41 (12.5% miss)
- Adjusted EBITDA: $343.2 million vs analyst estimates of $269.4 million (17.3% margin, 27.4% beat)
- EBITDA guidance for the upcoming financial year 2026 is $800 million at the midpoint, below analyst estimates of $980.6 million
- Operating Margin: 7.6%, up from -10% in the same quarter last year
- Monthly Unique Payers: 4.8 million, in line with the same quarter last year
- Market Capitalization: $11.44 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From DraftKings’s Q4 Earnings Call
- Daniel Politzer (JPMorgan): asked why management is accelerating investment in Predictions and what gives confidence in the category’s potential. CEO Jason Robins cited CFTC regulatory clarity and strong early numbers as reasons for the pivot.
- David Katz (Jefferies): pressed on how Predictions is modeled in revenue guidance. Robins stated no material revenue from Predictions is assumed and described the core business and Predictions as separate upside levers.
- Stephen Grambling (Morgan Stanley): inquired about growth trends in older versus newer Sportsbook states and monetization strategies. Robins highlighted ongoing increases in parlay mix and the potential for AI-driven promo efficiency.
- Ben Chaiken (Mizuho): questioned how DraftKings plans to build liquidity in the Railbird exchange and whether its Sportsbook data models provide an edge. Robins underscored their proprietary infrastructure as a differentiator for liquidity and market-making.
- Robin Farley (UBS): asked about the EBITDA impact of Predictions investment and start-up costs for new jurisdictions. CFO Alan Ellingson confirmed that guidance includes tens of millions in incremental spend for Predictions and new market entries.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be watching (1) the pace of adoption and monetization for the Predictions platform as new features and Railbird integration roll out; (2) whether the company maintains stable Sportsbook margins through disciplined promo spend and product mix; and (3) the impact of new state launches and regulatory developments on overall market share. The effectiveness of DraftKings’ national marketing strategy across verticals and progress toward regulatory clarity will also be key signposts.
DraftKings currently trades at $23.25, down from $25.16 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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