DraftKings Shares Plunge as Revenue Outlook Is Cut

DraftKings CEO Jason Robins said he remains optimistic about the company's long-term outlook despite the volatile picture in the early months of the NFL season. The company is competing fiercely with its rival FanDuel, while prediction market operators worth billions of dollars and some of the world's largest online brokerages have also moved into this space. In October, trading volume in these contracts alone exceeded $160 billion, and it is projected to reach $1 trillion a year in the coming years.

According to information Robins gave on Friday's quarterly earnings call, more than 1.6 million customers have engaged with the company's prediction product so far this year. In the third quarter, the number of monthly unique paying users rose 13% year over year. The company expects total revenue to grow 17% by the end of 2027, based on the midpoint of its full-year forecast. Adjusted EBITDA is projected to be between $700 million and $1 billion.

On the other hand, growth comes at a high price. The company said it will invest at least $650 million in the prediction space this year. Adjusted EBITDA in the third quarter was minus $317 million. In the same quarter last year, the figure was minus $126 million.

Following the quarterly results, shares fell about 22% in after-hours trading on Thursday. The decline continued on Friday, and shares dropped 28% from the previous day's close. At midday, the stock was trading at $17.60 and was on track to close the day down 26%. This was the company's lowest level in the past 12 months. The company lowered its full-year 2026 revenue forecast to a range of $6.35 billion to $6.55 billion. The previous forecast was $6.5 billion to $6.9 billion.

In the third quarter, revenue rose 16% to $1.33 billion. Even so, the net loss widened to $469 million, nearly double the $257 million loss in the same period last year.

Rival Flutter also failed to meet Wall Street expectations in its quarterly results on November 4. After the announcement, its shares fell as much as 6% to below $80. Flutter's shares have lost more than 60% of their value over the past 12 months.