DraftKings Q1 Earnings: Company Reports 17% Revenue Increase, Maintains 2026 Guidance
DraftKings beat earnings estimates in its Q1 Earnings report on Wednesday. The company's stock rose 5% earlier in the day. Wall Street is watching more than just revenue growth and profitability targets. Investors are also looking for clarity on how prediction markets, competition and promotional spending could impact the company’s long-term outlook.
DraftKings Q1 Earnings came in at $0.20 per share, compared to a loss of $0.07 per share in the same quarter last year. Revenue rose to $1,646 million, an increase of $237 million, or 17%, over Q1 last year. Analysts expected the company's earnings to reach just $0.03 per share.
The DraftKings Q1 Earnings release comes at a tricky moment for one of the best sports betting sites (and would-be prediction market) giants. DraftKings remains one of the two dominant players in U.S. for online wagering. But investors have grown increasingly cautious about the sector. This was the first full quarter in which DraftKings Predicts was in operation.
“We are off to a fantastic start to the year as our first quarter results exceeded our expectations,” Jason Robins, DraftKings’ Chief Executive Officer and Co-founder, said in the company's earnings release. “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,” added CFO Alan Ellingson. “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.”
DraftKings is maintaining its fiscal year 2026 revenue guidance range of $6.5 billion to $6.9 billion and its fiscal year 2026 Adjusted EBITDA guidance range of $700 million to $900 million.
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DraftKings Calls Prediction Markets 'Incremental' Concern
DraftKings called prediction markets an "incremental" opportunity in its report. The company reported that 69% of all sports prediction market sports-related trades come from states without legal sports betting, such as Texas and California. And in competitive sports betting states (those with 8 or more operators), 98% of the sports wagering/trading handle comes from licensed sports books. And just 2% come from prediction markets. DraftKings Predictions does not take sports-related trades in the 27 states where it is currently licensed as a sports betting operator. In April, DK's predictions consumer volume exceeded $1 billion, and its annualized total volume traded exceeded $2.3 billion, the company reported. That's an increase of 38% and 43% month-over-month.
Still, DraftKings shares have struggled in recent months. The downward push comes from concerns surrounding federally regulated prediction markets such as Kalshi.
That uncertainty recently prompted research firm Moffett Nathanson to downgrade DraftKings (along with competitor FanDuel/Flutter) from Buy to Hold. It slashed the price from $38 to $27. Analyst Robert Fishman said valuation alone may not be enough to revive investor sentiment until there is more regulatory clarity surrounding prediction markets and sports-event contracts.
The issue has become one of the biggest overhangs hanging above traditional sportsbook operators.
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DK Earnings History Struggles Against Expectations
The company’s recent earnings history has been inconsistent. This is just the fifth time DraftKings, one of the best betting apps, has beaten EPS estimates in its last 9 quarters. In Q4 2025, the company missed earnings expectations while posting revenue roughly in line with projections.
Still, many analysts remain bullish on the stock in the long term. Wall Street currently holds a Strong Buy consensus on DraftKings shares. The average analyst price target sits around $34 per share, implying significant upside from current trading levels.
Options traders are bracing for volatility around Thursday’s report. Based on recent options pricing, the market is implying roughly a 9.5% post-earnings move in either direction.
That suggests investors expect DraftKings earnings to serve as an important early gauge not only for the company itself, but for the broader online gaming sector as operators navigate slowing growth, mounting competition, and the emerging threat – or opportunity – posed by prediction markets.
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