Q2 2026 Draftkings Inc Earnings Call Transcript
Key Points
- DraftKings Inc (DKNG) generated $115 million in adjusted EBITDA in Q2 2026, with the core business on track to deliver approximately $1 billion in adjusted EBITDA for the full year.
- Customer acquisition surged nearly 75% year-over-year, with the best enterprise-wide customer acquisition cost since Q1 2025, and retention and engagement of new customers exceeded expectations.
- The Predictions offering is growing faster than anticipated, with annualized volume traded growing nearly 5 times from $2.3 billion to $11 billion between April and July, and over 600,000 customers engaged year-to-date.
- DraftKings Inc (DKNG) achieved vertical integration in Predictions with the launch of DKeX and FCM approval, enabling it to capture economics across the brokerage, exchange, and market-making layers, providing a structural LTV advantage.
- Sportsbook handle grew 11% year-over-year in Q2, with handle share improving for the third consecutive quarter, and July handle grew 20% year-over-year post-World Cup, indicating strong momentum.
- The company maintained its fiscal year 2026 revenue guidance of $6.5 billion to $6.9 billion and adjusted EBITDA guidance of $700 million to $900 million, reflecting confidence in the core business and Predictions investment.
- iGaming is showing renewed momentum with the launch of Lightning Link and Flex Spins, stabilizing market share after several quarters of decline.
- DraftKings Inc (DKNG) experienced customer-friendly sport outcomes in June, including the Knicks championship win and World Cup group stage performance, which negatively impacted Q2 revenue by approximately $80 million.
- Higher-than-expected customer acquisition spend (10% more than planned) weighed on near-term profitability, even though it was driven by strong demand and better-than-expected CAC.
- The company is investing $200 million to $300 million in Predictions in 2026, which is expected to pressure adjusted EBITDA, and the guidance range implies a significant fourth-quarter ramp that may be challenging to achieve.
- There is uncertainty regarding the regulatory environment for prediction markets, which could impact the long-term growth and profitability of the Predictions offering.
- The Predictions offering is still in early stages, with customer acquisition and monetization not yet fully proven, and the company is taking a cautious approach to investment due to unknown LTVs.
- The competitive environment in iGaming remains intense, and despite recent improvements, DraftKings Inc (DKNG) has been losing market share in this segment over the past several quarters.
- The company's guidance assumes no major changes in the promotional environment, but a competitor's increased sports investment could lead to higher promotional costs and pressure margins.
Hello everyone. Thank you for joining us and welcome to the Draftkings second-quarter 2026 earnings call. (Operator Instructions)
I will now hand the conference over to Matt Rappaport, Vice President of Finance. Please go ahead.
Good morning, everyone, and thank you for joining us today. Certain statements we make during this call may constitute forward-looking statements that are subject to risks, uncertainties and other factors as discussed further in our SEC filings that could cause our actual results to differ materially from our historical results or from our forecast. We assume no responsibility to update forward-looking statements other than as required by law.
During this call, management will also discuss certain non-GAAP financial measures that we believe may be useful in evaluating DraftKings' operating performance. These measures should not be considered in isolation or as a substitute for DraftKings' financial results prepared in accordance with GAAP.
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
