DraftKings has exceeded Wall Street's forecasts for its first-quarter revenue and profit. The company noted that its foray into prediction markets via its Super App has effectively reduced customer acquisition costs, resulting in a rise in stock prices during after-hours trading.
For the quarter ending March 31, the U.S. sports betting operator reported revenues of $1.65 billion, marking a 17% increase compared to the same period last year. This growth was attributed to efficient customer acquisition strategies, improved sportsbook margins, and sustained customer engagement.
Net profit reached $21.1 million, a significant turnaround from a loss of $33.9 million a year prior. Adjusted EBITDA also saw an increase, rising to $167.9 million from $102.6 million. DraftKings reported adjusted earnings of 20 cents per share, surpassing analysts' expectations of 17 cents.
Shares of the Boston-based firm rose by 1.8% in after-hours trading, following a 5.4% increase during regular market hours.
“We have made a remarkable start to the year, as our first-quarter results have exceeded our expectations,” stated CEO Jason Robins.
DraftKings has maintained its revenue forecast for the full year of 2026, projecting between $6.5 billion and $6.9 billion, alongside an adjusted EBITDA forecast of $700 million to $900 million.
The company reported a 4% decline in monthly unique paying customers year-over-year, totaling 4.2 million, partly due to its exit from the Texas lottery market. However, excluding this factor, the number of paying customers actually grew by 2%.
Average revenue per monthly unique payer rose, bolstered by strong customer retention and acquisition across both sportsbook and iGaming sectors.
Sportsbook revenue climbed by 24.1% to $1.09 billion, while the total betting handle increased by 1.5% to $14.08 billion. The sportsbook margin improved to 7.8%, up from 6.4% the previous year.
iGaming revenue also saw an increase of 8.9%, reaching $461.3 million, which accounted for nearly 28% of the total revenue for the group.
DraftKings emphasized the early success of its newly launched Super App strategy, which integrates sportsbook, iGaming, and prediction market functionalities into a single platform.
The company indicated that its comprehensive mobile application, which now includes DraftKings Predictions, has led to an over 80% reduction in customer acquisition costs for prediction markets in April.
“Our core business is robust, and profitability is on the rise. This positions us well to capitalize on our advantages in Predictions,” Robins remarked. “With our Super App, market-making capabilities, proprietary exchange, and various combinations coming together, we aim to secure a leading position in Sports Predictions by year-end.”
Robins also noted that the annualized consumer volume in prediction markets exceeded $1 billion in April, while the total annualized traded volume surpassed $2.3 billion, reflecting month-over-month increases of 38% and 43%, respectively.
The company highlighted that 69% of the prediction market trading volume currently originates from states where sports betting is still prohibited, indicating a significant untapped market potential.
DraftKings reiterated its long-term goals presented during its investor day, which include a potential gross revenue opportunity ranging from $55 billion to $80 billion by 2030 and a minimum long-term adjusted EBITDA margin of 30%.
CFO Alan Ellingson commented, “The business continues to scale efficiently as we grow revenue, enhance profitability, and invest in high-return opportunities.”