DraftKings’ second quarter results were met with a positive market reaction, despite missing Wall Street’s revenue and profit expectations. Management attributed the performance to a sharp increase in customer acquisition—driven by major sporting events like the NBA Finals and the World Cup—and robust engagement on the new Predictions product. CEO Jason Robins noted, “Customer acquisition grew nearly 75% year-over-year as interest in the NBA Finals and the World Cup surged,” emphasizing that these new users are expected to generate value for years to come. The company also cited improved customer acquisition efficiency and ongoing cost management as contributing factors.
Is now the time to buy DKNG? Find out in our full research report (it’s free for active Edge members).
DraftKings (DKNG) Q2 CY2026 Highlights:
- Revenue: $1.44 billion vs analyst estimates of $1.51 billion (4.6% year-on-year decline, 4.5% miss)
- Adjusted EPS: $0.09 vs analyst expectations of $0.19 (53.1% miss)
- Adjusted EBITDA: $114.6 million vs analyst estimates of $164.4 million (7.9% margin, 30.3% miss)
- The company reconfirmed its revenue guidance for the full year of $6.7 billion at the midpoint
- EBITDA guidance for the full year is $800 million at the midpoint, above analyst estimates of $740.7 million
- Operating Margin: -4.7%, down from 10% in the same quarter last year
- Monthly Unique Payers: 3.6 million, up 300,000 year on year
- Market Capitalization: $12.66 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From DraftKings’s Q2 Earnings Call
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Stephen Grambling (Morgan Stanley) asked about customer overlap and cannibalization between Predictions and Sportsbook. CEO Jason Robins emphasized that overlap is minimal and that Predictions attracts a distinct customer base, particularly in states without regulated sportsbook options.
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Daniel Politzer (JPMorgan) questioned the impact of increased promotional spend by competitors. Robins responded that DraftKings continues to be more efficient with promotions and does not perceive a significant shift in the competitive environment.
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David Katz (Jefferies) probed the profitability arc of Predictions customers and the shift to DraftKings’ in-house exchange. Robins explained that vertical integration is expected to improve unit economics and that volume will increasingly be routed through the company’s own platform.
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Jordan Bender (Citizens) asked about cross-sell dynamics from other verticals into Predictions. Robins noted that the company’s cross-sell capabilities have improved and that early data shows similar or better rates compared to previous product launches.
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Shaun Kelley (Bank of America) inquired about future marketing investment flexibility if customer acquisition remains strong. Robins confirmed that DraftKings will continue to be data-driven and may increase spend when returns justify it.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will monitor (1) the pace of customer adoption and engagement in the Predictions product, especially as NFL season approaches, (2) progress in shifting volume to the DK Exchange platform and resulting margin improvements, and (3) stabilization in core business growth despite external promotional and regulatory pressures. Product innovation and rollout efficiency will also be key signposts for execution.
DraftKings currently trades at $25.47, up from $22.17 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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