DraftKings Q1 2026 EBITDA Explodes 599% to $167.9M, Revenue Jumps 17% YoY
DraftKings revenue jumped 17% YoY and EBITDA exploded 599% to $167.9 million as the company presses its "advantage" in prediction markets
US sportsbook giant DraftKings turned in a 17% year-over-year revenue increase in Q1 2026 to $1,646 million, along with an enormous 599% increase in adjusted EBITDA, up from $24 million in Q1 2025 to $167.9 million.
However, adjusted EPS of $0.20 fell short of the consensus forecast of $0.22, though it remains a marked improvement over the prior year – $0.22 was probably an overly aggressive target. All told, the pivot to the new prediction markets growth vertical drove the gains in net revenue margin of 7.8% in the quarter.
The results represent a significant milestone in DraftKings’ transition from a high-growth cash burner to a consistently profitable leader in the US sportsbook and iGaming sector.
Commenting on the results, CEO and co-founder Jason Robins told analysts on the conference call:
We are off to a fantastic start to the year as our first quarter results exceeded our expectations. Our core business is strong, and profitability is inflecting.
“That gives us the firepower to press our advantage in predictions. With our Super App, market-making capabilities, and proprietary exchange coming together, we intend to establish a leadership position in sports predictions before year-end.”
Parlay Bets Boost Net Revenue Margin, Aiming for Predictions ‘Leadership’
Analysts focused on the sportsbook net revenue margin, which grew to 7.8% (up from 6.4% YoY). This was largely fueled by an increased mix of lucrative parlay bets, which carry higher holds for the house.
Not surprisingly, though, management is keen to promote the DraftKings Predictions narrative, which it increasingly sees as a strategic advantage in the marketplace.
Robins emphasized that the company’s strong Q1 profitability provides the “firepower to press our advantage in Predictions”.
He stated that by combining its Super App, market-making capabilities, and proprietary exchange, DraftKings intends to establish a “leadership position in Sports Predictions before year-end”.
This new vertical could attract millions of customers outside of DraftKings’ traditional sports betting demographic.
Texas Lottery Exits Weigh on MUPs
Elsewhere, monthly unique payers (MUPs) fell 4% to 4.2 million, but this was in parge part due to the company’s 2025 exit from the Texas Lottery market.
If the Texas exit is excluded, then MUPs actually rose 2%. More importantly, average revenue per MUP (ARPMUP) raced ahead by 21% to $131, indicating that DraftKings is succeeding in extracting greater value from its existing user base.
However, given the revenue and EBITDA beats, shareholders were somewhat disappointed that DraftKings maintained its FY 2026 revenue guidance ($6.5 to $6.9 billion) and EBITDA guidance ($700 to $900 million). The market was probably expecting a “beat and raise” scenario.
CFO Alan Ellingson exuded confidence in the company’s trajectory:
The business continues to scale efficiently as we grow revenue, expand profitability, and invest in high-return opportunities.
“We are seeing predictable and improving cohort economics, reinforcing our conviction that we have built an efficient and powerful long-term business model.”
Looking beyond Q1 2026, analysts will be closely watching for updates on prediction market revenue and the performance of acquisitions, such as Jackpocket, which is expected to contribute significantly to EBITDA in 2026.
The acquisition of lottery business Jackpocket, which closed in early 2024 for approximately $750 million in cash and stock, is a cornerstone of DraftKings’ strategy to transform from a sports betting company into a diversified Super App.
Management views Jackpocket as a massive customer-acquisition engine that significantly boosts the company’s bottom line – in short, it hopes it will act as a low-cost funnel for high-value gamblers.
70% of Predictions Volume Coming From ‘States Where We Don’t Even Have Legal Mobile Sports Betting Yet’
Homing in on the predictions market strategy, Morgan Stanley analyst Stephen Grambling asked about how much of the $1 billion annualized volume in predictions for April was “coming from your existing Sportsbook users versus entirely new demographics, and what does the margin profile look like as you move toward in-house market-making?”
“Great question, Stephen,” replied Robins. “Right now, about 70% of that volume is coming from states where we don’t even have legal mobile sports betting yet.
This is the ‘Super App’ strategy in action – we are reaching a massive cohort of sports fans who were previously underserved.
“On the margin side, moving to our proprietary exchange and in-house market-making unlocks an additional layer of the value chain.
“We aren’t just taking a fee; we are capturing the trading economics. We expect the margin profile here to eventually rival or exceed our high-hold parlay products in the sportsbook.”
DraftKings Shows Strong Fundamentals Despite Management Caution on Guidance
Despite an all-around optimistic tone on the earnings call from analysts and management alike, DraftKings (DKNG) shares fell 1.9% in after-hours trading.
The post-market stock performance was in contrast to the regular Thursday session in which DraftKings closed up 5.43% at $25.22, so there has been something of a ‘sell the news’ reaction to the report.
Still, DraftKings has demonstrated its ability to offset slow progress in state-by-state legalization of sports betting through growth in its prediction markets.
And its ability to still generate significant cash flow during the off-season of the sports calendar is impressive. While the EPS miss and conservative guidance gave short-term traders pause for thought, the fundamentals can’t be ignored.
The 21% jump in per-user revenue and the growing prediction market opportunity indicate that the company is optimally-positioned to hit the high end of its full-year EBITDA guidance.
DraftKings (DKNG) Quarterly Financial Performance (2025–2026)
| Period | Metric | Actual Result | Consensus Forecast | Beat/Miss (% Diff) | YoY Change (Annual) | QoQ Change (Quarterly) |
| Q1 2026 | Net Revenue | $1,646.1M | $1,644.0M | 🟢 Beat (+0.13%) | +16.8% | -17.20% |
| Adj. EPS | $0.20 | $0.22 | 🔴 Miss (-9.1%) | +66.7% | -44.40% | |
| Adj. EBITDA | $167.9M | $150.0M | 🟢 Beat (+11.9%) | +599.6% | -51.10% | |
| Q4 2025 | Net Revenue | $1,989.2M | $1,970.0M | 🟢 Beat (+1.0%) | +42.8% | +73.8% |
| Adj. EPS | $0.25 | $0.15 | 🟢 Beat (+66.7%) | +189.3% | +196.2% | |
| Adj. EBITDA | $343.2M | $320.0M | 🟢 Beat (+7.3%) | +370.8% | +371.3% | |
| Q3 2025 | Net Revenue | $1,144.0M | $1,210.0M | 🔴 Miss (-5.5%) | +4.4% | -24.40% |
| Adj. EPS | -$0.26 | -$0.26 | ⚪ In-Line (0%) | -52.90% | -168.40% | |
| Adj. EBITDA | -$126.5M | -$68.7M | 🔴 Miss (-84.1%) | -84.10% | -142.00% | |
| Q2 2025 | Net Revenue | $1,513.0M | $1,400.0M | 🟢 Beat (+8.1%) | +37.0% | +7.4% |
| Adj. EPS | $0.38 | $0.13 | 🟢 Beat (+192.3%) | +280.0% | +216.7% | |
| Adj. EBITDA | $301.0M | $285.0M | 🟢 Beat (+5.6%) | +135.2% | +1,154.2% | |
| Q1 2025 | Net Revenue | $1,409.1M | $1,380.0M | 🟢 Beat (+2.1%) | +17.0% | – |
| Adj. EPS | $0.12 | $0.09 | 🟢 Beat (+33.3%) | +142.9% | – | |
| Adj. EBITDA | $24.0M | $20.0M | 🟢 Beat (+20.0%) | +127.9% | – |
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