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DraftKings reported a tougher second quarter even as betting activity climbed, saying customer-friendly sports results and heavier promotional spending pushed revenue lower.
The operator said Q2 2026 revenue fell 5% year over year to $1.44 billion, while handle rose 15% to a record $13.1 billion. That came in below analyst expectations of about $1.52 billion.
Higher handle did not translate into higher sportsbook revenue
DraftKings said sports revenue declined 10.6% to $891.9 million despite the rise in wagers. Its sports net revenue margin fell to about 6.8%, down from 8.7% in the same quarter last year.
According to the company, customer-friendly outcomes hurt results, including a Knicks NBA title run and bettor-favored World Cup matches. iGaming helped offset some of that pressure, with revenue rising 7.5% to $461.9 million.
Monthly Unique Payers increased about 9% to 3.6 million, showing continued user growth and engagement. But average revenue per payer fell 13% to $132.
Profitability weakened as marketing costs rose
DraftKings posted a GAAP net loss of $67.6 million, or $0.14 per diluted share, compared with net income of $157.9 million in the prior-year quarter. Adjusted EBITDA fell to $114.6 million from $300.6 million.
Sales and marketing expense rose to $322.5 million from $233.2 million a year earlier. Even so, adjusted EPS came in at $0.09, ahead of the $0.02 consensus estimate.
The quarter adds another reminder that sportsbook revenue can swing sharply based on game outcomes, even when player activity is strong. For readers tracking major operators in markets such as New York, handle growth alone does not always mean stronger operator results.
DraftKings leaves full-year outlook unchanged
Despite the softer quarter, DraftKings maintained its full-year 2026 guidance of $6.5 billion to $6.9 billion in revenue and $700 million to $900 million in Adjusted EBITDA.
For the first half of 2026, revenue reached $3.09 billion, up 5.8% from $2.92 billion in the first half of 2025.
CEO Jason Robins said handle, users, and engagement all grew during the quarter, while CFO Alan Ellingson said the core business remains on track to generate roughly $1 billion in Adjusted EBITDA this year.
Investors and industry watchers will now be looking to see whether sportsbook hold and promotional spending improve in the second half of 2026.
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Source: As reported by Ian Valentino.
