DraftKings achieved its first full year of profitability in 2025 with $6.05 billion in revenue, though Q2 2026 results show a $67.6 million net loss due to rising payouts and marketing costs. Total handle for the sportsbook reached $13.1 billion despite shrinking margins.
DraftKings reached its first full year of profitability in 2025, reporting a net income of $3.7 million and total revenue of $6.05 billion. This surpassed the $4.77 billion revenue recorded in 2024. The company reported an adjusted EBITDA of $620 million for the full year 2025, compared to $181.3 million in 2024. However, the second quarter of 2026 shows a divergence between user engagement and cash flow. Revenue for the quarter reached $1.44 billion, a 5% decline from the $1.51 billion reported in the second quarter of 2025. While the company grows, the money flowing to bettors erodes the bottom line. Total handle for the sportsbook and prediction products hit $13.1 billion, representing a 15% jump from the $11.5 billion handled during the same period in 2025. I see the massive volume increase, but the shrinking margins tell the real story. The company holds the number two market share position in the United States.
The mismatch between handle and margin
Bettors benefited from favorable outcomes, such as the Knicks NBA title run and results during the summer World Cup. These results caused sports revenue to fall 10.6% to $891.9 million, even though handle climbed. The sports net revenue margin also slipped to 6.8% from the 8.7% recorded in the second quarter of 2025. I find the 13% drop in average revenue per payer to $132 quite telling. While monthly unique payers grew 9% to 3.6 million, the net loss for the quarter hit $67.6 million. While the company reported a net loss of $67.6 million for the quarter, this figure is a massive swing compared to the $157.9 million net income the operator recorded during the same period in 2025. Adjusted EBITDA fell to $114.6 million from $300.6 million in the same period last year. Sales and marketing expenses climbed to $322.5 million from $233.2 million as the company pushed its newer Predictions product.
| Metric | Q2 2026 | Q2 2025 |
|---|---|---|
| Total Revenue | $1.44 billion | $1.51 billion |
| Adjusted EBITDA | $114.6 million | $300.6 million |
| Net Income/Loss | ($67.6 million) | $157.9 million |
| Total Handle | $13.1 billion | $11.5 billion |
| Monthly Unique Payers | 3.6 million | 3.3 million |
Volatile quarterly performance
The quarterly performance across 2025 and 2026 shows extreme volatility. In the fourth quarter of 2025, revenue reached $1.99 billion, a 43% increase from the prior year. That quarter also saw adjusted EBITDA hit a record $343.2 million. Monthly unique payers stayed steady at 4.8 million during that period, with average revenue per payer at $139. By the first quarter of 2026, revenue rose to $1,646.1 million, representing a 16.8% increase from the first quarter of 2025. Net income for that first quarter sat at $21.1 million, while adjusted EBITDA reached $167.9 million. I find the drop from $167.9 million in adjusted EBITDA in Q1 2026 to $114.6 million in Q2 2026 to be significant. The company maintains its full-year 2026 guidance, which projects revenue between $6.5 billion and $6.9 billion and adjusted EBITDA between $700 million and $900 million. These projections follow a first-half revenue total of $3.09 billion, which grew 5.8% from the $2.92 billion in the first half of 2025. The company also expects the Jackpocket acquisition to produce positive EBITDA as early as fiscal year 2025.
Surcharges and expansion strategy
To offset high taxes, DraftKings implemented a surcharge on winnings in states where legal gaming taxes exceed 20%. CEO Jason Robins began this program on January 1, 2025, calling it a nominal fee to help the company compete with the tax-free illegal market. I wonder if this fee will eventually drive bettors toward unregulated competitors. You already know that DraftKings is no longer just a daily fantasy site. The company expanded its footprint to 28 states for mobile sports betting and five states for iGaming. It also provides services to about 40% of the Canadian population. In 2024, sports revenue accounted for 61% of total sales, while iGaming made up 32%. The company also manages a fantasy and lottery segment that provides 7% of sales. The board approved a $1 billion stock repurchase plan during the second quarter. The company continues to invest in its Super App and its Predictions product, which launched in December 2025.