DraftKings Stock Tumbles on Reduced 2026 Revenue Guidance

Shares of DraftKings (NASDAQ: DKNG) plunged in Thursday’s after-hours session after the gaming company lowered its 2026 revenue guidance.

In after-hours trading, DraftKings stock is off 23% at this writing after the sportsbook operator updated its 2026 financial outlook, forecasting earnings before interest, taxes, depreciation and amortization (EBITDA) of $175 million to $275 million on revenue of $6.35 billion to $6.55 billion. That’s below the consensus top-line estimate of $6.65 billion. The company also said it expects an adjusted EBITDA investment of $650 million to $700 million in DraftKings Predictions.

The after-hours sell-off was potentially hastened by DraftKings’ 2027 guidance, including a revenue forecast of $7.35 billion to $7.75 billion. While the midpoint of that range, $7.55 billion, implies a 17% year-over-year increase, it’s slightly below the consensus estimate of $7.59 billion.

The gaming company forecast 2027 revenue for DraftKings Predictions of $650 million to $750 million with an adjusted EBITDA investment of $250 million to $350 million.

DraftKings Making Prediction Market Strides

DraftKings’ after-hours slide indicates investors aren’t happy with the 2026 and 2027 outlooks, but the operator’s prediction market is gaining momentum.

In a letter to DraftKings shareholders, Robins cited “compelling data and excellent returns” as the reasons for the company’s increased 2026 EBITDA investment in its prediction market. The data indicate DraftKings Predictions customers are engaged and devoted.

“Our Predictions customers are highly engaged, retaining at high levels and trading significant volume. In totality, we expect our 2026 cohort to pay back in approximately 20 months, well below our two-year payback target,” wrote Robins in the letter.

A Rough Third Quarter

Late Thursday, DraftKings stock is being taken to task as traders are likely focusing more on the aforementioned guidance and less on prediction market positivity, but the company’s third-quarter results may be a source of consternation as well.

During the July through September period, DraftKings lost 53 cents a share on revenue of $1.33 billion. Analysts expected a loss of 28 cents on sales of $1.39 billion. The adjusted EBITDA loss of $316.9 million was well below the year-earlier loss of $126.5 million.

As has been seen elsewhere in the internet gaming space, DraftKings’ third-quarter iGaming revenue growth was sluggish at just 2.1%, but sports revenue increased 31.5%. Overall sports consumer volume was up 21.9% while sports net revenue margin was 5.6%, up from 5.2% a year earlier.