Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
DraftKings' Q2 FY2026 was defined by a steep profit reversal despite robust user engagement, as an operating loss replaced last year's profit. Customer-friendly sports outcomes and heavy promotional spending around the NBA Finals and FIFA World Cup drove a 10.6% decline in high-margin Sportsbook and Prediction Markets revenue, while sales & marketing costs soared 38%. Monthly Unique Payers grew 9.1%, but ARPMUP fell 12.6%, indicating margin compression. Offsetting positives came from iGaming revenue growth of 7.5%, and the company maintained strong liquidity with $984 million in cash.
Revenue
$1.44B
-4.58% YoY
EPS (Diluted)
-$0.14
-146.67% YoY
Operating Income
-$68.17M
-145.26% YoY
Source: SEC XBRL
DraftKings (DKNG) reported Q2 FY2026 revenue of $1.44B, down 4.6% year over year. Operating margin was -4.7%, against 10.0% a year earlier. DKNG's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 0.09 | 0.03 | Beat +165.5% |
| Mar 2026 | 0.03 | 0.01 | Beat +229.7% |
| Dec 2025 | 0.25 | 0.15 | Beat +68.1% |
| Sep 2025 | -0.52 | -0.43 | Miss -21.6% |
Adjusted (non-GAAP) EPS of $0.09 versus the $0.03 analyst consensus — a +165.5% beat for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was -$0.14.
Compiled by AI from 10-Q Item 2 of this filing
Revenue decreased 4.6% primarily due to lower Sportsbook and Prediction Markets revenue, driven by customer-friendly sports outcomes and higher promotional reinvestment for new customer acquisition.
Source: 10-Q Item 2 MD&A
Sales and marketing expenses surged 38.3% to $322.5 million, mainly due to increased external marketing costs for the FIFA World Cup, NBA Playoffs, and the launch of the Super App and Prediction Markets.
Source: 10-Q Item 2 MD&A
Monthly Unique Payers increased 9.1% year-over-year, driven by retention and new acquisition from the NBA Finals and FIFA World Cup, but ARPMUP fell 12.6% due to the same promotional pressure.
Source: 10-Q Item 2 MD&A
Adjusted EBITDA fell to $114.6 million from $300.6 million, reflecting the revenue headwinds and higher spending, though the company remains focused on long-term user growth and new jurisdiction launches.
Source: 10-Q Item 2 MD&A
iGaming revenue grew 7.5% to $461.9 million, benefiting from improved promotional reinvestment and higher user engagement.
Source: 10-Q Item 2 MD&A
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
The company's revenue and margins are highly dependent on sports results; unfavorable outcomes can sharply reduce hold percentages and revenue, as evidenced by the 10.6% decline in Sports revenue this quarter.
Source: 10-Q Item 2 MD&A
Intense competition may force sustained high promotional offers to acquire and retain customers, pressuring margins and profitability, as sales and marketing costs jumped 38.3% in the quarter.
Source: 10-Q Item 2 MD&A
Gaming tax rates have increased in certain states, raising cost of revenue by 5.3 percentage points to 61.8% of revenue; further regulatory changes could adversely impact operations.
Source: 10-Q Item 2 MD&A
The company has $1.26 billion in convertible notes and a $500 million revolver, leading to increased interest expense and potential financial strain if cash flows weaken.
Source: 10-Q Item 2 MD&A
Aggressive share buybacks and equity-based compensation have contributed to a 43.6% decline in stockholders' equity, potentially harming remaining shareholders' value.
Source: 10-Q Balance Sheet (XBRL)
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 1.44 $B | 1.51 $B | -4.58% |
Cost of Revenue $M | 891.78 $M | 854.56 $M | +4.36% |
Operating Income $M | -68.17 $M | 150.64 $M | -145.26% |
Net Income $M | -67.61 $M | 157.94 $M | -142.81% |
EPS (Basic) $ | -0.14 $ | 0.32 $ | -143.75% |
EPS (Diluted) $ | -0.14 $ | 0.30 $ | -146.67% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
DraftKings achieved its first profitable Q1 in recent history, posting $21.1M net income on $1.65B revenue (+16.8% YoY) as operating leverage finally turned positive with a $5.8M operating income versus a -$46.3M loss a year ago.
DraftKings achieved its first-ever annual net profit of $3.7M in FY2025, driven by 27% revenue growth to $6.05B and a dramatic narrowing of operating losses to just -$15.8M, while generating $662.9M in operating cash flow.