Draftkings Inc (NASDAQ:DKNG) shares fell more than 12% after the company reported fourth quarter 2025 results that included a significant earnings-per-share miss and cautious fiscal 2026 guidance.
The sports betting and online gaming company posted Q4 revenue of $1.99 billion, up 43% from $1.39 billion in the same period last year, surpassing analyst expectations of $1.97 billion.
Adjusted EBITDA reached a record $343 million, while net income for the quarter was $136 million.
Despite the strong top-line growth, DraftKings’ GAAP EPS came in at $0.20, well below the $0.45 analysts had anticipated.
DraftKings highlighted continued healthy customer engagement, with monthly unique payers (MUPs) averaging 4.8 million in Q4, unchanged year-over-year. Excluding Jackpocket, MUPs increased 5% versus the prior year.
Average revenue per MUP rose 43% to $139, driven by higher net revenue margins across both Sportsbook and iGaming offerings.
Looking ahead, the company projected fiscal 2026 revenue of $6.5 billion to $6.9 billion, below the Wall Street consensus of $7.32 billion. Adjusted EBITDA guidance of $700 million to $900 million also fell short of analyst estimates of $998 million.
DraftKings noted that the guidance reflects planned investments in new products, state launches, and continued strategic growth initiatives, while assuming current state tax rates remain unchanged.
“We closed 2025 on a high note,” DraftKings CEO Jason Robins said in a statement. “Fourth quarter revenue increased 43% year-over-year and we achieved records for revenue and adjusted EBITDA. Our core business is strong as we enter 2026.”
Following the print, Jefferies maintained a ‘Buy’ rating on DraftKings, noting that while the fiscal year 2026 adjusted EBITDA guidance came in below consensus and may weigh on shares in the near term, the guidance appears conservative and could set a floor for the year.
The firm highlighted the company’s solid Q4 results, including revenue above estimates and record adjusted EBITDA, as a positive development.
Jefferies also underscored its long-term optimism for the US sports wagering market and DraftKings’ profit potential. The firm noted that management likely guided conservatively to reflect disciplined promotional spending and competitive pressures in certain markets, and will host a conference call to discuss prediction market strategy, handle growth trends, customer mix shifts, regulatory outlook, EBITDA margin expansion, and capital allocation plans.