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    DKNG
    Earnings call· Jun 2026(Q2 FY26)

    DraftKings Q2 FY26 earnings call DKNG

    Aug 7, 2026 Source

    Executive summary

    DraftKings Q2 FY26 — Strong Core Business and Rapid Predictions Growth

    DraftKings delivered a strong Q2 FY26, driven by robust core business performance and rapid adoption of its new predictions offering. The company achieved significant customer acquisition efficiency and accelerated unique payer growth, while its vertically integrated Super App strategy is yielding strong engagement. Management maintains its full-year guidance, confident in the underlying earnings power and the incremental opportunity presented by predictions, despite near-term profitability impacts from customer-friendly sport outcomes and increased acquisition spend.

    Highlights

    5

    • Adjusted EBITDA reached $115 million in Q2 FY26.

    • Customer acquisition grew nearly 75% year-over-year, with costs approximately 25% better than anticipated.

    • Monthly unique payers growth accelerated to 9% year-over-year.

    • Predictions offering engaged over 600,000 customers year-to-date, with annualized total volume traded growing nearly 5x from $2.3 billion to $11 billion from April to July.

    • Sportsbook handle increased 11% year-over-year in Q2 FY26, with handle share improving year-over-year for the third consecutive quarter.

    Concerns

    2

    • Customer-friendly sport outcomes in Q2 FY26 resulted in an $80 million revenue headwind.

    • Higher-than-expected customer acquisition in Q2 FY26 weighed on near-term profitability.

    Guidance & targets

    3
    CategoryTargetConfidence
    Adjusted EBITDA (Core Business)
    $1 billion
    high materiality
    High
    Revenue
    $6.5 billion to $6.9 billion
    high materiality
    High
    Adjusted EBITDA
    $700 million to $900 million
    high materiality
    High

    Operational metrics

    29
    Adjusted EBITDA
    $115 million
    Q2 FY26

    Would have been higher absent customer-friendly sport outcomes and stronger-than-expected customer acquisitions.

    Revenue growth (normalized)
    10%YoY
    Q2 FY26

    Normalized for customer-friendly sport outcomes and higher-than-expected customer acquisition.

    Customer acquisition growth
    75%YoY
    Q2 FY26

    Achieved at the best customer acquisition cost since Q1 2025.

    Customer acquisition cost efficiency
    25% bettervs anticipated
    Q2 FY26

    Underlying customer acquisition costs came in approximately 25% better than anticipated.

    Monthly unique payers growth
    9%YoY
    Q2 FY26

    Accelerated growth.

    Monthly unique payers growth (ex-World Cup)
    6%YoY
    Q2 FY26

    Excluding World Cup only customers.

    Sports consumer volume growth
    15%YoY
    Q2 FY26

    Includes Sportsbook handle plus Predictions consumer volume.

    Sportsbook handle growth
    11%YoY
    Q2 FY26

    null

    Parlay handle mix
    continued to rise
    Q2 FY26

    null

    Sportsbook handle share
    improvedYoY
    Q2 FY26

    Improved year-over-year for the third consecutive quarter.

    Net revenue per unique customer (TTM)
    14%YoY
    H1 FY26 (TTM)

    On a trailing 12-month basis.

    Customer overlap (Sportsbook vs. Prediction Market)
    1%
    Q2 FY26

    Minimal customer overlap, indicating predictions is an incremental opportunity.

    Prediction market consumer volume source
    80% to 90%
    Q2 FY26

    Volume that mostly would not have been on Sportsbook to begin with.

    Predictions customers engaged
    600,000
    YTD FY26

    Customers who have engaged with the predictions offering year-to-date.

    Predictions annualized total volume traded growth
    nearly 5xfrom $2.3 billion to $11 billion
    April to July FY26

    Annualized total volume traded grew from April to July.

    Predictions sports content offering expansion
    over 25x
    April to July FY26

    Now offers over 30 markets per MLB, NBA, WNBA game, including player markets.

    Predictions customers engaged with combos
    more than half
    Q2 FY26

    More than half of Predictions customers have engaged with combos.

    Combos share of Predictions consumer volume
    approaching 20%
    Q2 FY26

    Combos are already approaching 20% of Predictions consumer volume.

    Adjusted G&A expense growth
    -6%YoY
    Q2 FY26

    null

    Adjusted operating expenses growth (ex-marketing & predictions)
    improvedYoY
    Q2 FY26

    Excluding external marketing and predictions investment.

    NBA total handle growth
    7%YoY
    NBA season FY26

    null

    NBA parlay handle mix increase
    400
    NBA season FY26

    Parlay handle mix increased by more than 400 basis points.

    World Cup Sportsbook handle growth
    6x highervs 2022 World Cup
    World Cup FY26

    null

    World Cup Sportsbook handle growth (same-state)
    4.5xvs 2022 World Cup
    World Cup FY26

    null

    Handle growth (post-World Cup)
    double-digitYoY
    July FY26

    Continued growth in July after the World Cup ended.

    Revenue headwind from sport outcomes
    $80 million
    Q2 FY26

    Impact on revenue from customer-friendly sport outcomes.

    Handle growth
    20%YoY
    July FY26

    Post-World Cup.

    Customer acquisition spend vs plan
    10% morevs plan
    Q2 FY26

    Spent about 10% more than planned due to strong customer acquisition environment.

    Core customer acquisition growth
    40%YoY
    Q2 FY26

    Achieved at the best CAC since Q1 2025.

    Product announcements

    6
    ProductTypeDetails
    Super Appupdate
    DKeXlaunch
    Futures Commission Merchant (FCM) licensemilestone
    Flex Spinslaunch
    Lightning Linklaunch
    Moonshotlaunch

    Risks & headwinds

    3
    Customer-friendly sport outcomesQ2 FY26

    $80 million revenue headwind

    Mitigation: Sportsbook friendly World Cup outcomes in July have been a positive tailwind so far in the third quarter, mostly offsetting the aforementioned customer-friendly outcomes experienced in June.

    Higher-than-expected customer acquisition spendQ2 FY26

    weighed on near-term profitability

    Mitigation: view this as a pull forward of acquisition and an optimized use of investment; underlying earnings power of our core business continues to exceed our expectations.

    Regulatory uncertainty for Predictionsfuture

    not entirely certain

    Mitigation: taking a little bit more of a cautious approach in Predictions investment

    What to watch in Q3 FY26

    5

    Predictions annualized total volume traded

    next quarter
    Currentnearly 5x growth from $2.3B to $11B (April-July)
    TargetContinued rapid growth, further closing the gap to OSB LTVs.

    Why it matters

    Rapid volume growth and LTV parity are key to predictions becoming a significant incremental opportunity.

    We are excited to update you over the next quarter as this momentum continues.

    Q&A highlights

    6

    Why does DraftKings expect to capture a different customer profile in prediction markets compared to competitors (who attract professionals), and are there product/promo limitations for the vertically integrated platform?

    DraftKings focuses on states without legal OSB (e.g., California, Texas) where they see a similar customer profile to OSB. They believe their differentiated content, promotions, and product experience, combined with customer stickiness, will attract a broader audience. They also note minimal cannibalization with OSB, as competitor prediction markets primarily attract professional syndicates.

    “where we're focused is on the states we don't have an OSB offering. And there, because you don't have competitive OSB offerings, it's a very different picture.”

    asked by Stephen Grambling · answered by Jason Robins

    2 min read6 chapters

    Detailed Narrative

    01

    Super App Strategy and Customer Acquisition

    DraftKings' Super App strategy, outlined at its Investor Day, is driving massive new customer acquisition, particularly in states without regulated sportsbooks. Customer acquisition grew nearly 75% year-over-year in Q2 FY26, with costs approximately 25% better than anticipated, leading to a pull-forward📎 of acquisition. The company leaned into this demand, investing 10% more in customer acquisition spend.

    02

    Predictions Offering Rapid Growth

    The newly launched predictions offering has surpassed expectations, engaging over 600,000 customers year-to-date. Annualized total volume traded grew nearly 5x from $2.3 billion in April to $11 billion in July. Early data indicates similar volume per customer and month-over-month retention to Sportsbook customers, with acquisition costs well below those for Sportsbook customers.

    03

    Vertical Integration Advantage

    DraftKings has achieved vertical integration in its predictions offering, owning the brokerage, exchange (DKeX), and market maker. This allows the company to capture economics across the entire value chain, providing a structural lifetime value advantage over competitors. The in-house exchange, DKeX, launched in June, and the company obtained Futures Commission Merchant approval in July, enabling rapid content expansion and improved customer experience.

    04

    Core Business Momentum

    The core Sportsbook business is performing strongly, with handle increasing 11% year-over-year in Q2 FY26 and parlay handle mix continuing to rise. Handle share improved for the third consecutive quarter. Post-World Cup, July handle was up 20% year-over-year, indicating sustained momentum. The company expects a strong NFL season, anticipating that increased market chatter and awareness will lift overall engagement.

    05

    iGaming Business Stabilization and Growth

    After several quarters of underperformance, the iGaming business is showing renewed momentum. Key drivers include the successful launch of Lightning Link, a major land-based game, and Flex Spins, a unique bonus spin product. Customer acquisition in iGaming also exceeded expectations in Q2 FY26, leading to stabilization in market share and expectations for future gains.

    06

    Cost Discipline and Profitability

    DraftKings continues to operate with cost discipline, with adjusted G&A expense declining 6% year-over-year and adjusted operating expenses (excluding external marketing and predictions) also improving. The company remains focused on efficiency while investing in long-term value opportunities, with the core business on track to generate approximately $1 billion in adjusted EBITDA for FY26.

    AI-generated summary of the company’s earnings call. Not investment advice.