DraftKings’ Best Quarter Ever — So Why Did the Stock Crash?

Record Quarter Driven by NFL and iGaming Growth

Sports betting revenue reached $1.3 billion in Q4 2025, a 63% increase from the same period in 2024, with NFL activity serving as the primary catalyst. Sportsbook handle during peak NFL months climbed 13% to $16.8 billion, while improved hold margins against bettors amplified the financial impact.

Monthly Unique Players across sportsbook and casino products rose 5% year-over-year, and revenue per user jumped 43% to $139, reflecting both improved engagement and margin efficiency. Online casino products also contributed to a record quarter, with digital table games and slots generating $500 million in Q4 revenue — a milestone that reinforces iGaming’s growing weight within DraftKings’ overall revenue mix.

Adjusted EBITDA for the quarter reached $343 million, a sharp increase from $89.4 million in Q4 2024.

“We closed 2025 on a high note. Fourth quarter revenue increased 43% year-over-year, and we achieved records for revenue and Adjusted EBITDA. Our core business is strong as we enter 2026.”
— Jason Robins, CEO and Co-Founder, DraftKings

Full-Year 2025: First Profitable Year Since IPO

For the full fiscal year, DraftKings reported revenue above $6 billion, a 27% increase, while Adjusted EBITDA climbed 242.5% to $620 million. The company also recorded its first positive net income since listing on public markets in 2020 — a milestone analysts have long flagged as a key threshold for maturing digital betting operators.

DraftKings also repurchased 16 million shares over the course of the year.

“We are proud to have generated positive net income in fiscal year 2025. We have built an efficient and powerful business model and are excited to share more detail at our virtual Investor Day on March 2nd.”
— Alan Ellingson, CFO, DraftKings

Missouri Launch and National Scale

Operational expansion added to the annual results. DraftKings launched mobile sports betting in Missouri during the year, making it the 26th U.S. state for the company. Continued market access across regulated jurisdictions remains a primary driver of customer growth for the operator.

DraftKings Predictions: A New Revenue Layer

Late in the fourth quarter, DraftKings launched DraftKings Predictions, a trading-style exchange now available in 38 states. The platform allows users to trade on outcomes across sports events, economic indicators, index futures, and interest rates.

The company plans to generate revenue from Predictions through two channels: trading fees from users placing positions, and market-making activities where DraftKings takes the opposite side of certain trades.

CEO Jason Robins devoted significant attention to the new business line in his shareholder letter, citing analyst estimates that position it as a substantial long-term opportunity.

“Predictions is rapidly developing into a massive, incremental opportunity, and we are moving with urgency.”
— Jason Robins, CEO, DraftKings

“We also see a massive, incremental opportunity in DraftKings Predictions. We plan to deploy growth capital to build the best customer experience in Predictions, and acquire millions of customers. We have the playbook to execute and win.”
— Jason Robins, CEO, DraftKings

Robins also confirmed the new platform is not affecting the core sportsbook. “We are not seeing a discernible impact from Predictions on our revenue,” he stated.

The launch also serves a market access function. The platform gives DraftKings a presence in states that have not yet legalized traditional sports betting, building a customer base that could convert to sportsbook users if those markets open.

2026 Guidance Falls Below Analyst Expectations

Despite the strong 2025 results, DraftKings issued 2026 revenue guidance of $6.5 billion to $6.9 billion — well below the $7.3 billion Wall Street consensus. The company’s 2026 Adjusted EBITDA forecast of $700 million to $900 million also fell short of the $981 million analyst estimate compiled by FactSet.

The guidance gap triggered a 15.2% drop in DKNG shares in after-hours trading following the earnings release.

The company attributed the lower outlook to planned investment in prediction markets and new jurisdictional launches. Guidance does not account for sporting outcome variability or the modest benefit from year-to-date sports results.

Some industry analysts have pushed back on the broader narrative of prediction markets threatening sportsbooks. Citizens analyst Jordan Bender noted in January that prediction markets currently account for roughly 5% of total legal sports betting volume, writing that “one bad Monday Night Football game could have the same negative result on EBITDA as the total impact the prediction market space is currently having on the sector.”

DraftKings will host a virtual Investor Day on March 2nd to share further detail on strategy and financial outlook.

Source: DraftKings