DraftKings posts revenue of US$1.64 billion in first quarter, up 17%

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2026/02/12: DraftKings’ revenue increases by 43% to nearly $2 billion in fourth quarter 2025/05/08: DraftKings’ revenue rises 20% year-over-year in first quarter 2025/08/07: As second quarter yields record revenue, DraftKings Chief Executive Jason Robins pledges to monitor prediction markets 2025/11/06: DraftKings reports revenue of US$1.14 billion in third quarter

The Backstory

Why this quarter matters

DraftKings’ latest results extend a through line that has defined the company’s past year: growth leaning more on margin mechanics and product expansion than on raw user gains. Revenue rose 17% in the first quarter as the company cited healthier sportsbook margins and “efficient” acquisition. That follows a late-2025 stretch when DraftKings posted record sales and adjusted EBITDA while flagging an even bigger opportunity in its prediction-style business. In its year-end update, the company said it planned to invest to “build the best customer experience” in predictions and acquire millions of users, setting the tone for 2026 and beyond. Those priorities and financial contours were spelled out when DraftKings reported a 43% jump to nearly $2 billion in fourth-quarter revenue and introduced a 2026 outlook that bakes in predictions investment and new market launches. See: DraftKings’ revenue increases by 43% to nearly $2 billion in fourth quarter.

The first-quarter update also arrived with a reminder that user mix matters. Monthly unique payers declined because of the company’s 2025 exit from Texas lottery, even as average revenue per payer climbed on improved sportsbook margin. That inversion — fewer payers producing more revenue — has been a recurring theme since DraftKings absorbed lower-spending lottery users from Jackpocket and then recalibrated. In the fourth quarter, for instance, the company reported a higher payer base tied in part to Jackpocket, yet average revenue per player fell when those lottery customers were included. For reference: DraftKings reports US$1.4 billion in revenue for fourth quarter.

User trends: from lottery lift to sportsbook leverage

DraftKings’ payer dynamics have swung over the past several quarters as it integrated Jackpocket and managed state changes. The company highlighted a 36% jump in average monthly unique players in a prior fourth quarter, much of it driven by the Jackpocket acquisition. But it also noted those lottery users carried lower average spend, which pressured per-user revenue before mix and margin effects reasserted. The follow-on quarter showed the other side of that equation: monthly payers fell after the Texas lottery exit, while average revenue per payer rose 21% on better sportsbook margin. The thread is consistent — DraftKings is prioritizing value per customer and hold percentage, then layering on selective acquisition where it sees payback.

The third quarter of last year offered a midpoint snapshot. Payers rose modestly but revenue per payer ticked up as igaming and structural sportsbook hold helped offset customer-friendly outcomes. That print came alongside a broader reset of near-term targets and a marketing coup. DraftKings cut a deal to become ESPN’s official sportsbook and odds provider, a partnership it said would deepen its reach across premium sports audiences while it prepared to launch its predictions business. For details: DraftKings reports revenue of US$1.14 billion in third quarter.

Engineering margin — and the next product wave

Margin has been DraftKings’ most reliable lever. Across late 2025 and early 2026, management repeatedly cited a higher net revenue margin in sportsbook and gains in igaming as primary drivers. The company has also signaled that product upgrades are designed to underpin those economics: live betting, cross-sell between verticals and exchanges that deepen engagement while improving pricing efficiency. The predictions push is central. Executives have framed predictions as a massive incremental market and outlined a roadmap that includes a proprietary exchange and in-house clearing functions to support market making. In its third-quarter update, DraftKings said the predictions launch was coming “in the coming months” and paired that with the ESPN tie-up to anchor distribution. See: DraftKings reports revenue of US$1.14 billion in third quarter. The company reiterated its conviction at year-end, introducing 2026 guidance that assumed investment in predictions while maintaining discipline on the core. Reference: DraftKings’ revenue increases by 43% to nearly $2 billion in fourth quarter.

The strategy is not without trade-offs. Investing to build a leadership position in a new predictions category could weigh on near-term profitability even as it expands the addressable market and creates cross-sell to sportsbook and igaming. Still, management has argued the playbook is proven — spend behind high-return acquisition, steer customers into higher-margin products and let scaled pricing capabilities lift hold over time. The first quarter’s revenue growth with fewer payers is consistent with that approach.

Rivals are scaling — and encroaching from adjacent markets

DraftKings’ position must be viewed against a fast-moving field. FanDuel parent Flutter reported 16% revenue growth in its second quarter as average monthly players jumped 11% to nearly 16 million. In the U.S., FanDuel’s igaming revenue surged 42% and sports betting winnings rose 11%, helped by favorable sports outcomes and a long NBA postseason. Globally, Flutter integrated acquisitions in Italy and Brazil and lifted its full-year outlook. The report underscored FanDuel’s momentum and capacity to invest across markets. Read: FanDuel parent Flutter posts more revenue, much less profit in second quarter.

Competition is also arriving from fintech. Robinhood posted a 100% jump in third-quarter revenue on surging activity in crypto, options and equities. Crucially, the company said prediction markets are “growing rapidly,” adding a new business line it expects to generate nine-figure annualized revenue alongside a banking rollout. While Robinhood serves a different core customer, the firm’s push into predictions and exchange-style products edges closer to DraftKings’ next frontier. More here: Robinhood posts US$1.27 billion revenue in Q3.

The upshot: DraftKings is racing to cement share in sportsbook and igaming while staking a claim in predictions before larger wallets and adjacent platforms can crowd the space. Its ESPN relationship gives it reach. Its market-making and exchange ambitions aim to keep customers engaged and margins supportive. But the landscape is getting denser.

Guidance, expectations and what to watch

DraftKings has tried to balance growth bets with clearer financial guardrails. The company introduced a 2026 revenue range of $6.5 billion to $6.9 billion at year-end, paired with adjusted EBITDA of $700 million to $900 million, and said the outlook reflected predictions investment and new jurisdictions. It later reiterated that guidance after its first-quarter beat, a signal of confidence in execution and in the durability of margin gains despite variability in sports outcomes. That meshes with a prior update when DraftKings lifted its 2025 revenue and EBITDA targets on stronger engagement and better hold. See: DraftKings reports revenue of US$1.14 billion in third quarter and DraftKings’ revenue increases by 43% to nearly $2 billion in fourth quarter.

Key markers ahead include the rollout cadence and traction of predictions and exchange products, the pace of cross-sell between sportsbook and igaming, and whether average revenue per payer continues to outpace payer growth without heavy promotional spend. State and tax dynamics also matter as DraftKings remains live in more than half the U.S. by population but still has room to expand. Against a rival like FanDuel that is scaling both in the U.S. and abroad, and a Robinhood testing prediction markets at fintech speed, DraftKings’ ability to convert product ambition into sustained margin and user growth will set the trajectory for the rest of 2026.