DraftKings revises outlook as Predictions spending grows

DraftKings has revised its 2026 financial outlook as it increases investment in prediction markets, while reporting third-quarter revenue growth of 16%. The company now forecasts annual revenue of $6.35 billion–$6.55 billion and adjusted EBITDA of $175 million–$275 million. Its November 5 announcement also introduced financial guidance for 2027.

The revised earnings forecast primarily reflects expected adjusted EBITDA investment of $650 million–$700 million in Predictions during 2026. DraftKings separately expects its core business to generate adjusted EBITDA of $875 million–$925 million, incorporating further iGaming investment and the effects of modestly customer-friendly sports results.

Third-quarter revenue reached $1,329 million, compared with $1,144 million a year earlier. Monthly unique payers increased approximately 13% to 4.1 million, while average revenue per monthly unique payer rose approximately 3% to $109. The company attributed revenue growth principally to customer engagement and a higher sportsbook net revenue margin.

Despite the revenue increase, DraftKings reported an adjusted EBITDA loss of $316.9 million for the quarter, compared with a loss of $126.5 million a year earlier. Its net loss attributable to common stockholders widened to $468.7 million from $256.8 million.

Predictions investment extends into 2027

“Our core business continues to generate significant free cash flow, which we are deploying to fund growth in our Predictions business at attractive payback periods,” said Alan Ellingson, DraftKings’ chief financial officer. The company expects Predictions revenue to be immaterial in 2026 because customer promotions will offset most gross revenue.

For 2027, DraftKings forecasts revenue of $7.35 billion–$7.75 billion and adjusted EBITDA of $800 million–$1.0 billion. Within those forecasts, Predictions is expected to contribute revenue of $650 million–$750 million, with adjusted EBITDA of $250 million–$350 million. These are management forecasts rather than reported results.

The announcement follows growing prediction-market activity, including the trading expansion recently covered in the report on Jefferies’ October market estimates. DraftKings’ shares fell in after-hours trading following the release; the supplied market report’s percentage decline was a trading snapshot rather than a final closing result.