DraftKings Inc - Class A

DraftKings delivered a disappointing second quarter, missing on both the top and bottom lines as a combination of customer-friendly sports outcomes and heavy promotional investment weighed on results. Revenue fell 4.6% year-over-year to $1.44 billion, coming in 4.48% below the $1.51 billion consensus, while adjusted EPS of $0.09 fell sharply short of the $0.19 analysts had expected, a 53.05% miss. The core culprit was margin compression in the sportsbook, where Sports Net Revenue Margin narrowed to 6.8% from 8.7% a year ago, even as Sports Consumer Volume climbed 15% to $13.14 billion. Sales and marketing costs surged to $322.54 million from $233.19 million, reflecting aggressive investment behind the December 2025 launch of Predictions and broader customer acquisition. Adjusted EBITDA tumbled to $114.60 million from $300.64 million in Q2 2025, and the company swung to a GAAP net loss of $67.61 million from net income of $157.94 million a year ago. Management maintained full-year 2026 revenue guidance of $6.50 billion to $6.90 billion and Adjusted EBITDA guidance of $700 million to $900 million, expressing confidence that the core business remains on track to generate approximately $1.00 billion of Adjusted EBITDA.