DraftKings Plunges on 2027 Forecast That Misses Estimates

(Bloomberg) -- DraftKings Inc. gave a forecast for earnings in 2027 that missed the average analyst estimate, while also cutting its outlook for fiscal 2026. Third-quarter revenue also fell short of expectations. The shares fell 19% in extended trading.

The Boston-based sports-betting giant sees adjusted earnings before interest, tax, depreciation and amortization of $800 million to $1 billion, the company said in a statement Thursday. That is less than the $1.12 billion analysts were expecting on average, according to data compiled by Bloomberg.

For fiscal year 2026, the company now expects revenue of $6.35 billion to $6.55 billion and adjusted earnings before interest, tax, depreciation and amortization of $175 million to $275 million. Previous guidance was for $6.5 billion to $6.9 billion in revenue and adjusted Ebitda of $700 million to $900 million.

This new range primarily reflects the company's increased adjusted Ebitda investment in predictions of $650 million to $700 million, the company said.

DraftKings and its chief rival Flutter Entertainment Plc.'s FanDuel have struggled with sport-betting outcomes that have been more favorable to their customers. They've also been coping with competition from a new generation of prediction-market operators like Kalshi Inc. and Polymarket.

FanDuel and DraftKings have both launched their own prediction-market products, focusing on states were sports-betting is not legal. Rolling out the new products is expensive, however, eating into company profits.

In the third quarter, DraftKings company reported revenue of $1.33 billion, missing analysts' estimates of $1.39 billion. Monthly players increased 13% to 4.1 million, compared with with analysts' average projections for 4 million.