Revenue and Top‑Line Growth
Q1 revenue increased 17% year‑over‑year, surpassing $1.6 billion; April soft‑close revenue was up 22% year‑over‑year.
DraftKings
· DKNG
May 7th, 2026
Summary
- Earnings Call Date:
- 2026-05-07
- Change Since:
- -8.41%
- Next Earnings Date:
- 2026-07-31
Earnings Call Sentiment
PositiveThe call conveyed a predominantly positive operational and financial picture: strong top‑line growth (17% YoY), outsized adjusted EBITDA improvement (64% YoY), margin expansion, and clear early traction in Predictions (rapid CAC declines and fast volume growth). Management reaffirmed FY guidance and highlighted profitable core momentum (Sportsbook strength, April performance, >$500M adjusted EBITDA over six months). Offsets include a planned $200M–$300M investment in Predictions that depresses near‑term EBITDA, deceleration in iGaming growth, moderated customer growth, and regulatory/consumer‑protection risks tied to Predictions. On balance the highlights and demonstrable profitability gains outweigh the headwinds and planned investments, but the Predictions program introduces execution and regulatory uncertainty that warrants monitoring.
Company Guidance
DraftKings reaffirmed fiscal 2026 guidance of $6.5–$6.9 billion in revenue and $700–$900 million in adjusted EBITDA (a range that includes planned Predictions investment of roughly $200–$300 million this year); in Q1 it posted revenue just over $1.6 billion (+17% YoY) and adjusted EBITDA of $168 million (+64% YoY, and would have exceeded $200 million excluding Predictions spend and the Arkansas sportsbook launch), with Sportsbook revenue of $1.1 billion (+24% YoY), net revenue margin up 140 bps to 7.8%, parlay mix +~300 bps, adjusted gross margin +~200 bps YoY, and more than $500 million of adjusted EBITDA generated over the last six months; April soft-close trends were strong (handle +6%, revenue +22% YoY, >$100 million adj. EBITDA in April), Predictions metrics show CACs down >80% in April, annualized Predictions consumer volume >$1 billion and annualized total volume traded >$2.3 billion (up 38% and 43% MoM), management reiterated a $55–$80 billion gross revenue opportunity by 2030 with at least a 30% long-term adjusted EBITDA margin, and the company noted positive net income for a second consecutive quarter and nearly $100 million of share repurchases.
Adjusted EBITDA and Profitability Inflection
Adjusted EBITDA rose 64% year‑over‑year to $168 million in Q1; company achieved positive net income for the second consecutive quarter and generated more than $500 million of adjusted EBITDA over the last 6 months.
Strong Sportsbook Performance
Sportsbook revenue increased 24% year‑over‑year to $1.1 billion; net revenue margin improved by 140 basis points to 7.8%; parlay handle mix rose nearly 300 basis points.
Margin and Efficiency Gains
Adjusted gross margins increased by nearly 200 basis points year‑over‑year; teams reported 2–3x productivity versus last year and improved promotional effectiveness.
Predictions: Rapid Early Traction
Predictions CAC declined by more than 80% in April; annualized Predictions consumer volume exceeded $1.0 billion and annualized total volume traded exceeded $2.3 billion (up 38% and 43% month‑over‑month, respectively); Predictions volume per customer exceeds Sportsbook handle per customer.
Market Making and Product Roadmap Progress
Market‑making for Predictions is already generating a positive return; proprietary exchange and combo offerings are launching imminently to expand the ecosystem and economics.
Strong Monthly Start to Q2
April handle was up 6% (soft close) and the company reported over $100 million of adjusted EBITDA in April alone.
Capital Allocation and Shareholder Actions
Repurchased almost $100 million of shares during the quarter while continuing to invest in growth initiatives.
Guidance Reaffirmed
Fiscal year 2026 guidance reaffirmed: revenue $6.5 billion to $6.9 billion and adjusted EBITDA $700 million to $900 million (guidance includes planned investment in Predictions).
Product and Geographic Expansion
Launched Sportsbook in Arkansas, planning Alberta launch (July), and added Spanish language functionality; increased focus and new product features on iGaming such as 'Flex Spins.'
Operator
Hello, everyone. Thank you for joining us, and welcome to the DraftKings First Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Michael DeLalio, Vice President of Investor Relations. Please go ahead.
Michael DeLalio
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. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, slide presentation and business update, which can be found on our website and in our quarterly report on Form 10-Q filed with the SEC. Hosting the call today, we have Jason Robins, Co-Founder and Chief Executive Officer of DraftKings, who will share some opening remarks and an update on our business. Following Jason's remarks, our Chief Financial Officer, Alan Ellingson, will provide a review of our financials.
We will then open the line to questions. I will now turn the call...
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