DraftKings Cuts Outlook After Third Quarter Miss as Prediction Market Spending Rises

DraftKings shares fell sharply in extended trading on Thursday after the sports betting company missed third quarter revenue estimates, posted a wider loss, and cut its full year outlook while putting hundreds of millions of dollars into its prediction markets business.

A miss on revenue and earnings

DraftKings reported third quarter 2026 revenue of 1.33 billion dollars, up 16 percent from a year earlier. The figure came in below Wall Street estimates of 1.39 billion dollars, according to the Wall Street Journal.

The company posted a third quarter loss of 468.7 million dollars, or 94 cents a share. A year earlier the loss was 256.8 million dollars, or 52 cents a share. Analysts had forecast a loss of 41 cents a share, the Journal reported.

Zacks measured the quarter on an adjusted basis and put the loss at 53 cents a share, against its consensus estimate of a 21 cent loss. Zacks said revenue of 1.33 billion dollars missed its estimate by 3.8 percent.

Barron's, citing FactSet, reported that analysts expected a loss of 41 cents a share on revenue of 1.39 billion dollars. Barron's said the stock fell hard after the results, as the outlook cut overshadowed revenue gains in sports betting and iGaming.

Guidance cut and the predictions bill

DraftKings cut its full year 2026 revenue guidance to 6.35 billion to 6.55 billion dollars, down from 6.5 billion to 6.9 billion dollars. It cut adjusted EBITDA guidance to 175 million to 275 million dollars, down from 700 million to 900 million dollars.

The lower outlook reflected a 650 million to 700 million dollar investment in its prediction markets offering in 2026, the Journal reported. The company plans to invest 175 million to 225 million dollars into predictions in the fourth quarter alone.

Chief Executive Jason Robins told investors, as quoted by Barron's, that "predictions revenue will be immaterial in fiscal year 2026, as new customer promotions will offset the lion's share of gross revenue generated."

The company also issued fiscal 2027 revenue guidance of 7.35 billion to 7.75 billion dollars.

Reports on the share move varied by the minute in extended trading. Bloomberg reporting carried by Binance News put the fall at 19 percent, while Benzinga Pro data carried by KuCoin put the after hours decline at 18.4 percent, to 19.20 dollars.