DraftKings (NASDAQ:DKNG) executives touted record quarterly results for the fourth quarter of 2025 while outlining an expanded push into its “predictions” business, which CEO Jason Robins described as the company’s most compelling new growth opportunity since the U.S. sports betting landscape changed in 2018.
Fourth quarter and full-year 2025 highlights
Robins said DraftKings “closed 2025 on a high note,” setting new quarterly records for revenue and Adjusted EBITDA. Fourth quarter revenue rose 43% year-over-year to nearly $2 billion, while Adjusted EBITDA increased to $343 million—about four times the prior-year period. Adjusted EBITDA margin expanded by more than 1,000 basis points year-over-year to 17%, according to management’s remarks.
DraftKings also continued repurchasing shares, buying back 8 million shares during the fourth quarter and 16 million shares over the full fiscal year. Robins said the company expects to “remain active with repurchases” as Adjusted EBITDA continues to grow.
Core business trends: Sportsbook, iGaming, fantasy and lottery
Ellingson said results were strong across DraftKings’ verticals in 2025. He noted fantasy revenue increased as Pick Six began to scale, iGaming revenue rose 20% as the company expanded its offering and attracted a broader demographic, and lottery revenue benefited from a stronger jackpot environment along with the rollout of scratcher games and Keno in additional states.
Sportsbook was a key driver in the fourth quarter. Ellingson said sportsbook revenue increased 64% year-over-year to $1.4 billion. Handle growth accelerated for the second consecutive quarter to 13% year-over-year, and sportsbook net revenue margin increased 250 basis points to 8%. He added that parlay handle mix increased nearly 500 basis points, which management framed as part of a multi-year trend supporting structurally higher net revenue margin.
Ellingson characterized fourth quarter sports outcomes as “sportsbook-friendly,” with an overall hold percentage slightly above 12%. He emphasized that short-term variance can move results in either direction, and added that the company’s NFL hold percentage for the 2025 to 2026 NFL season was 16%.
For the full fiscal year, Ellingson said sportsbook handle increased 11% year-over-year to $54 billion. He also highlighted the company’s scale metrics, including $2.5 trillion in “capital at risk” across all open wagers, which he attributed to the multiplicative nature of parlays.
Predictions: accelerating investment and building the stack
Robins said DraftKings is moving “with urgency” to become a leader in predictions and plans to deploy growth capital to improve the customer experience and acquire millions of customers. He said the company is targeting “hundreds of millions” in annual revenue from DraftKings predictions in the years ahead and believes there is “much more upside” longer term, which he said should translate into meaningful incremental Adjusted EBITDA.
Robins told analysts that, to date, DraftKings is not seeing a discernible impact from predictions on sportsbook revenue. He cited Missouri—described as the company’s newest sportsbook state—where adoption through the first two months was higher than any prior state launch and customer activity was strong. He also said overall sportsbook handle accelerated to 13% year-over-year in the fourth quarter, and that January sportsbook handle increased 4% year-over-year even after two consecutive months of sportsbook-friendly outcomes and a continued surge in parlay handle mix. Internal and third-party data, he said, suggested predictions affected January handle only “very slightly” and primarily among low-margin customers, leaving revenue impact “de minimis.”
Robins and Ellingson outlined several planned upgrades to the predictions business in 2026, including integration work and new operational capabilities:
- Railbird integration: Robins said DraftKings plans to integrate Railbird near the middle of the year to increase innovation velocity and improve customer economics by “owning more of the stack.” In a later Q&A exchange, he indicated Railbird was “coming next quarter.”
- Market making launch: Robins said DraftKings is launching a market-making capability to improve liquidity, which he called “a core part of the customer experience” in predictions. He described two revenue engines: transaction fees from the customer-facing platform and trading economics from market making and proprietary trading on its own exchange and, where appropriate, other exchanges.
- Expanded content and exchange connectivity: Robins said DraftKings Predictions already connects to multiple exchanges and can expand content availability and liquidity as trading options evolve. He pointed to a Crypto.com integration as an “immediate upgrade” that added trading options across player performance markets, golf, UFC, and politics.
During the Q&A, Robins said DraftKings’ early signals in predictions were encouraging, pointing to Super Bowl Sunday when the DraftKings Predictions app had the second-most downloads in its category and delivered three times its prior record for daily trading volume. He added that retention has been strong so far despite the product being early and positioned to improve as more content is added.
Regulatory backdrop, marketing leverage, and guidance for 2026
Robins said DraftKings views the regulatory environment as increasingly constructive, citing what he described as a “real lean in” from the Commodity Futures Trading Commission (CFTC), including an intention to establish clearer standards for event contracts and provide certainty for market participants. He said DraftKings supports the CFTC’s engagement and the advancement of a more defined, durable regulatory framework for sports-related predictions.
On marketing, Robins argued DraftKings’ national footprint is an advantage, saying many consumers “don’t really even understand the difference” between adjacent products and that national messaging can be rotated and leveraged to drive value across offerings. Executives said additional details on product and marketing strategy will be shared at the company’s Virtual Investor Day on March 2.
For fiscal year 2026, Ellingson guided to revenue of $6.5 billion to $6.9 billion and Adjusted EBITDA of $700 million to $900 million. He said the ranges reflect expected investments in DraftKings Predictions, “line-of-sight jurisdiction launches,” and disciplined planning as business conditions evolve, and that the outlook assumes state tax rates remain consistent with current levels.
In Q&A, Ellingson said DraftKings did not include predictions revenue in its 2026 guidance, describing it as “all upside” and too early to quantify. He said the company expects to spend on customer acquisition via new user offers, with fixed costs in the “double digits” and overall incremental costs in the “$ tens of millions,” while also emphasizing synergies from existing models, marketing, and headcount. He added that the company included spend tied to Maine iGaming and Alberta in its outlook, though exact timing of those launches was not provided.
Robins also addressed the company’s approach to guidance, saying DraftKings has returned to a more conservative posture after frustration with missing prior guidance. He described pushing his team to lower internal targets to improve confidence in hitting the published outlook.
DraftKings ended the call by reiterating that it plans to unveil additional details at its March investor event, including its strategy for “winning in predictions.”
About DraftKings (NASDAQ:DKNG)
DraftKings Inc is a leading digital sports entertainment and gaming company specializing in daily fantasy sports, sports betting and iGaming products. The company provides an integrated platform where users can participate in daily fantasy contests, place wagers on professional sports events, and enjoy a range of online casino-style games. DraftKings’ proprietary technology supports real-time odds, live scoring and advanced analytics to enhance the user experience across mobile and desktop applications.
Founded in 2012 by co-founders Jason Robins, Matthew Kalish and Paul Liberman, DraftKings began as a daily fantasy sports provider and rapidly expanded into regulated sports betting following legislative changes in the United States.
