NEW YORK, August 7, 2026, 15:07 EDT – DraftKings NASDAQ:DKNG shares advanced as robust betting activity offset a weaker-than-expected second-quarter report.
- At 14:52 EDT, DraftKings was up 5.6% at $23.42. U.S. regular trading hours were still in session.
- Sports consumer volume increased by 15% in the second quarter, but revenue declined 5%.
- DraftKings kept its 2026 guidance unchanged even as customer-acquisition and prediction-market costs rose.
DraftKings stock rose on Friday even after the company reported a quarterly loss and fell short on revenue. The reaction from investors indicated that the market viewed the shortfall as an issue with monetization rather than demand.
The most straightforward proof can be found in wagering activity. DraftKings reported an 11% rise in sportsbook handle compared to the previous year. Meanwhile, FanDuel parent company Flutter Entertainment NYSE:FLUT posted growth of only 2%. The resulting nine percentage-point difference indicates DraftKings picked up comparative momentum.
DraftKings recorded a decline in its sports net revenue margin to 6.8%, compared to 8.7% previously. Using last year’s margin rate on this year’s betting volume would generate about $1.14 billion in sports revenue. However, reported sports revenue totaled $892 million. The approximate difference of $251 million is an estimate, not official company guidance.
The quarter remained lacklustre, with company filings and FactSet Research Systems NYSE:FDS consensus data revealing shortfalls in both revenue and GAAP earnings.
| Second-quarter measure | Q2 2026 | Comparator | Variance |
|---|---|---|---|
| Revenue | $1.443 billion | $1.51 billion consensus | -4.4% |
| GAAP EPS | -$0.14 | +$0.02 consensus | -$0.16 |
| Adjusted EBITDA | $114.6 million | $300.6 million in Q2 2025 | -61.9% |
| Adjusted diluted EPS | $0.09 | $0.38 in Q2 2025 | -76.3% |
Management cited customer-favourable sports outcomes and higher promotional spending as reasons. Sales and marketing expenses climbed by $89 million, reaching $323 million. Adjusted EBITDA dropped $186 million.
The division between demand and monetization is evident in the operating figures. Customer acquisition rose markedly, while the cost to acquire those customers declined.
| Operating indicator | Q2 2026 result | Year-on-year change | Signal |
|---|---|---|---|
| Sports consumer volume | $13.14 billion | +14.5% | Robust demand |
| Sportsbook handle | Not disclosed | +11% | Key volume growth |
| Sports net revenue margin | 6.8% | -190 basis points | Decreased hold and extra promotions |
| Sports revenue | $891.9 million | -10.6% | Weaker monetization |
| iGaming revenue | $461.9 million | +7.5% | Broader revenue base |
| Customers acquired | Not disclosed | +73% | Accelerated growth |
| Customer-acquisition cost | Not disclosed | -8% | Improved efficiency |
| Sales and marketing | $322.5 million | +38.3% | Short-term profit headwind |
The pace of acquisitions outperformed what the expense figures indicate. DraftKings brought in close to 30% more customers than it had targeted. Its spending was around 10% above projections, but core costs were 25% lower than forecasts.
Predictions introduces an additional avenue for expansion, but its stated run-rate figure requires scrutiny. Over 600,000 users engaged with the service this year. Annualized trading volume increased from $2.3 billion in April to $11 billion in July. This metric calculates monthly volume times 12; it does not represent revenue.
Chief Executive Jason Robins stated that Predictions was “already growing faster than we anticipated.” DraftKings kept its revenue forecast at $6.5 billion to $6.9 billion, and left its adjusted EBITDA target unchanged at $700 million to $900 million. DraftKings Investor Relations
Flutter’s results put the contrast in focus. FanDuel’s sportsbook revenue in the U.S. declined 15%, and Flutter cut its profit outlook for the full year. As a result, DraftKings’ higher handle growth outweighed its earnings shortfall.
The disparity was evident in Friday’s market action. The prices listed were the most recent at approximately 14:52 EDT. Note that company classifications may vary.
| Company | Q2 U.S. sportsbook handle growth | Friday move | Price |
|---|---|---|---|
| DraftKings NASDAQ:DKNG | +11% | up 5.6% | $23.42 |
| Flutter Entertainment NYSE:FLUT, FanDuel parent | +2% | up 1.4% | $94.30 |
Most analysts maintained a positive outlook, though not all agreed. Out of 27 analysts surveyed, 23 rated the stock as Buy, three recommended Hold, and one suggested Sell. The consensus 12-month price target stood at $35.02.
| Firm | Analyst | Recommendation | Action | Price target |
|---|---|---|---|---|
| Morgan Stanley NYSE:MS | Stephen Grambling | Buy | Maintained | $36 |
| Benchmark | Mike Hickey | Buy | Reiterated | $30 |
| Bank of America NYSE:BAC | Shaun Kelley | Hold | Reiterated | $27 |
| Needham | Bernie McTernan | Buy | Reiterated | $35 |
| Stifel Financial NYSE:SF | Jeffrey Stantial | Buy | Maintained | $38 |
Shaun Kelley, analyst at Bank of America, stated that DraftKings is “executing well and gaining share in core sports betting.” He maintained a Hold rating, cautioning that spending on acquisitions might impact EBITDA in the second half. Benzinga
Risks: Outcomes on bets may shift rapidly, yet elevated promotional costs could persist. Predictions are also subject to execution and regulatory uncertainties. Annualized volume does not equate to recognized revenue, and increased investment might narrow DraftKings’ guidance buffer.
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