DraftKings posted a solid first quarter, but Wall Street’s focus quickly shifted to what was missed rather than what was made.
$DKNG Q1’26 EARNINGS HIGHLIGHTS
Revenue: $1.65B (Est. $1.65B)
; +17% YoY
FY26 Guide:
— Wall St Engine (@wallstengine) May 7, 2026
The company reported Q1 revenue of $1.65 billion, a 17% jump from a year ago, edging past analyst forecasts of $1.63 billion. It also swung to a profit of $21.1 million, or 3 cents a share, compared with a loss of $33.9 million in the same period last year.
But adjusted EPS came in at 20 cents, short of the 22-cent consensus estimate. That was enough to nudge DKNG stock down 1.4% in premarket trading Friday, pulling back after a 5.4% gain the day before.
The sportsbook side of the business performed well. Sportsbook revenue jumped 24% year-over-year, and margins improved. DraftKings also reaffirmed its full-year 2026 revenue guidance of $6.5 billion to $6.9 billion.
CEO Jason Robins called it “a fantastic start to the year,” adding that “our core business is strong and profitability is inflecting.”
If there was one theme running through the earnings letter, it was prediction markets. Robins mentioned DraftKings Predictions more than 20 times, signaling how seriously the company is treating the space.
Investment into the platform weighed on EBITDA this quarter, and Robins said more spending is coming in Q2. The pitch is that prediction markets are still early — “this category is still in its first inning,” he wrote — and DraftKings wants to define it.
The urgency isn’t hard to understand. DKNG stock is down 28% since the start of 2026. Platforms like Kalshi and Polymarket have been offering event contracts that closely mimic sports betting in states where traditional sportsbooks can’t operate, sidestepping the taxes and regulations that companies like DraftKings have to navigate.
By building its own prediction market platform and integrating it into the main DraftKings app, the company is trying to turn a threat into an opportunity. Customer acquisition costs for DraftKings Predictions dropped more than 80% in April, according to Robins.
DraftKings has also moved into market making on prediction markets — acting as a counterparty in certain trades rather than just connecting two bettors. Rival Flutter, parent of FanDuel, announced a similar strategy this week.
“Market making is already generating a positive return for us,” Robins said.
Next on the roadmap for DraftKings Predictions: parlay bets. Parlays are high-margin products for sportsbooks, combining multiple bets into a single long-shot wager. Adding them to the prediction market platform would bring it much closer to a traditional sportsbook experience.
DraftKings backed its full-year 2026 revenue guidance of $6.5 billion to $6.9 billion, unchanged from prior forecasts.
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