DraftKings revenue hits $6.2 billion as stock falls 40%
DraftKings generated $6.2 billion in revenue over the past twelve months, up from $5.4 billion a year earlier. During the same period, shares fell 40% through October 13, while the S&P 500 returned about 20%. The stock trades at a multiple of revenue that is roughly half the 3.1 times multiple for the broader S&P 500. Standard price-to-earnings ratios are not applicable because the company lost money over the past twelve months. DraftKings revenue grew 28.0% annually on average over the past three years, compared to a 5.9% annual average for S&P 500 companies. The operating margin was -2.9% over the past twelve months, while S&P 500 companies maintained an 18.5% operating profit margin.
DraftKings generated $6.2 billion in revenue over the past twelve months, up from $5.4 billion a year earlier. During the same period, shares fell 40% through October 13, while the S&P 500 returned about 20%. The stock trades at a multiple of revenue that is roughly half the 3.1 times multiple for the broader S&P 500. Standard price-to-earnings ratios are not applicable because the company lost money over the past twelve months. DraftKings revenue grew 28.0% annually on average over the past three years, compared to a 5.9% annual average for S&P 500 companies. The operating margin was -2.9% over the past twelve months, while S&P 500 companies maintained an 18.5% operating profit margin.
Revenue fell 4.6% year over year in the second quarter of 2026. Management attributed the decline to bettors winning more often than usual and increased spending on customer acquisition. The bettor wins reduced revenue by about $80 million, driven mainly by the Knicks championship and the World Cup group stage in June. Management said World Cup results in July shifted back in DraftKings’ favor and mostly offset those losses in the third quarter. Excluding bettor wins and extra customer spending, management stated revenue grew 10% year over year.
The company acquired roughly 30% more customers than planned during the NBA Finals and World Cup surges. Management expects these customers to generate gross profit for years to come. The company maintained its 2026 forecast for adjusted EBITDA at $700 million to $900 million, a figure that accounts for expenses related to its new prediction market, Predictions. Adjusted EBITDA is a measure of profit that excludes interest, taxes, and certain non-cash costs.
Trading volume on Predictions reached an annual rate of $11 billion in July, up from an annual rate of $2.3 billion in April. Over 600,000 customers had used Predictions by the second-quarter call. The platform is signing up new customers in states without a regulated sportsbook. Management noted that revenue per Predictions customer will be lower than for sportsbook customers, but higher margins should lead to similar gross profit per customer over time. Management described regulatory questions as making the future of Predictions "not entirely certain" and said the company is investing in it more cautiously.
The third-quarter report is the next major event for DraftKings stock. Trading volume on Predictions remains a key metric to watch. Continued volume growth would support management’s case that Predictions can win new customers, while stalled volume would highlight regulatory uncertainties.