DraftKings (NASDAQ:DKNG) Reports Sales Below Analyst Estimates In Q3 Earnings

Core Insights - DraftKings reported Q3 CY2025 revenue of $1.14 billion, which was 4.4% year-on-year growth but fell short of market expectations of $1.21 billion, resulting in a 5.6% miss [7] - The company revised its full-year revenue guidance down to $6 billion from $6.3 billion, reflecting a 4.8% decrease [7] - DraftKings' adjusted EPS was -$0.26, aligning with analysts' consensus estimates [7] Company Overview - DraftKings is a digital sports entertainment and gaming company that began in daily fantasy sports [4] Revenue Growth - Over the last five years, DraftKings achieved a compounded annual growth rate of 62.4%, outperforming the average consumer discretionary company [5] - The company's annualized revenue growth of 28.8% over the last two years is below its five-year trend but indicates healthy demand [6] Financial Performance - Adjusted EBITDA for the quarter was -$126.5 million, significantly missing analyst estimates of -$68.74 million, resulting in an 11.1% margin [7] - Operating margin improved to -23.8% from -27.3% in the same quarter last year [7] - Free cash flow margin increased to 21.9% from 11.9% in the same quarter last year [7] Market Outlook - Analysts project revenue growth of 29% over the next 12 months, consistent with the company's two-year growth rate [8] - Monthly unique payers remained stable at 3.6 million, in line with the same quarter last year [7] - DraftKings' market capitalization stands at $13.86 billion [7] Shareholder Returns - The board of DraftKings authorized an increase in the share repurchase program from $1.0 billion to $2.0 billion, emphasizing a focus on maximizing shareholder returns [3]