DraftKings Cuts 2026 Revenue and EBITDA Outlook on Predictions Spending After Wider Q3 Loss

DraftKings reported a wider-than-expected third-quarter loss and cut its full-year 2026 guidance after its November 5 results release, sending shares down sharply in after-hours trading and into the following session, according to Kucoin and CNBC. Management tied the bulk of the adjusted EBITDA reduction to increased investment in its Predictions product, according to TradingKey's account of the earnings call, even as the company issued a 2027 revenue outlook that Kucoin said implies roughly 17% growth at the midpoint.

Third-Quarter Results Missed Estimates

DraftKings posted a diluted loss of $0.94 per share, wider than the $0.52 loss reported a year earlier and worse than the $0.39 loss analysts polled by LSEG had expected, CNBC reported. On an adjusted basis, the company lost $0.53 per share versus $0.26 a year earlier, also worse than the 39-cent consensus loss estimate, according to Kucoin.

Sportsbook revenue came in at $784 million, below the $811.8 million StreetAccount consensus estimate, per CNBC's reporting. A revenue breakdown compiled by TradingKey showed sports revenue rising 31.5% year over year to $783.6 million from $596.1 million, iGaming revenue up 2.1% to $460.9 million from $451.3 million, and other revenue down 12.5% to $84.5 million from $96.6 million.

Shares fell 18.4% to $19.20 in after-hours trading following the report, Kucoin said, and then tumbled more than 20% in premarket trading the next morning, according to CNBC.

Full-Year 2026 Guidance Cut

DraftKings lowered its fiscal 2026 revenue guidance from a prior range of $6.5 billion to $6.9 billion down to $6.35 billion to $6.55 billion, Kucoin reported. The adjusted EBITDA outlook saw a steeper cut, falling from $700 million to $900 million to a new range of just $175 million to $275 million.

According to TradingKey's account of the earnings call, management connected the updated adjusted EBITDA outlook primarily to a larger-than-previously-disclosed investment in Predictions. The revised guidance now embeds a full-year Predictions adjusted EBITDA investment of $650 million to $700 million, including $175 million to $225 million in the fourth quarter alone. TradingKey's reporting laid out the arithmetic behind the new guidance: at the midpoints, expected 2026 core-business adjusted EBITDA of $900 million is reduced by roughly $675 million of Predictions investment, producing the total adjusted EBITDA guidance centered near $225 million.

Predictions Investment in Context

The scale of the Predictions spending increase marks a shift from earlier company messaging. A separate Yahoo Finance report published October 26, ahead of the Q3 release, had cited DraftKings management maintaining 2026 adjusted EBITDA guidance of $700 million to $900 million while projecting $200 million to $300 million in prediction-market spending. The guidance issued with the Q3 report shows both the EBITDA range and the Predictions investment figure moved considerably beyond those earlier levels.

On the call, CEO Jason Robins said Predictions was now contributing meaningfully to business growth and noted that more than 1.6 million customers had used DraftKings Predictions during 2026, according to Kucoin and corroborated by TradingKey. CFO Alan Ellingson said the core sportsbook and iGaming business was helping finance the Predictions buildout, which he described as offering attractive payback periods, Kucoin reported.

2027 Outlook Introduced

Alongside the 2026 cut, DraftKings issued initial fiscal 2027 guidance calling for revenue of $7.35 billion to $7.75 billion, which Kucoin said implies roughly 17% annual growth at the midpoint, and adjusted EBITDA of $800 million to $1.0 billion. TradingKey's breakdown of that guidance showed the core business is expected to generate $6.7 billion to $7.0 billion in revenue with adjusted EBITDA of $1.15 billion to $1.25 billion, while Predictions is projected to contribute $650 million to $750 million in revenue alongside a continued adjusted EBITDA investment of $250 million to $350 million.

Robins said DraftKings believed the company was positioned for an exceptional 2027, Kucoin reported.

Market Reaction

The stock had already been under pressure heading into the report. Yahoo Finance reported on October 26, ahead of the results, that DraftKings shares were trading at $21, down 41.4% for the year and only 14% above their 52-week low. The post-earnings selloff extended that decline, with CNBC reporting the stock among the biggest premarket movers the morning after results were released.

Bottom Line

DraftKings' Q3 report shows revenue growth across its sports segment that did not translate into improved earnings, as TradingKey put it, alongside a much larger near-term Predictions investment than the $200 million to $300 million in prediction-market spending Yahoo Finance reported management had outlined in late October. Management's own framing, as relayed by TradingKey, attributes the 2026 adjusted EBITDA cut primarily to that investment line rather than to deterioration in the core betting business. Interpreting that disclosure, the 2027 guidance for core adjusted EBITDA of $1.15 billion to $1.25 billion alongside a smaller $250 million to $350 million Predictions investment implies both stronger core profitability and moderating Predictions losses — outcomes that remain projections rather than results.