DraftKings Q4 Earnings & Revenues Miss Estimates, Stock Down

Core Insights - DraftKings Inc. (DKNG) reported fourth-quarter 2025 results with earnings and revenues missing the Zacks Consensus Estimate, leading to a 14.1% decline in shares during after-hours trading [1] Financial Performance - Adjusted earnings per share (EPS) for Q4 was 36 cents, missing the consensus estimate of 50 cents by 28%, compared to 14 cents in the prior-year quarter [3] - Revenues for Q4 reached $1,989 million, slightly below the consensus mark of $1,990 million, but represented a year-over-year growth of 42.8% [3] Customer Engagement - Monthly Unique Payers (MUPs) remained stable at 4.8 million, with a 5% increase when excluding the impact of the Jackpocket acquisition, driven by strong retention and acquisition trends [4] - Average Revenue per MUP (ARPMUP) increased by 43% year-over-year to $139, attributed to higher net revenue margins across Sportsbook and iGaming [5] Financial Highlights - As of December 31, 2025, DraftKings had cash and cash equivalents of $1.13 billion, up from $788.3 million a year earlier [6] - Adjusted property EBITDA for Q4 totaled $343.2 million, significantly up from $89.5 million in the same quarter of the previous year [6] - Net cash provided by operating activities was $662.9 million, an increase from $417.8 million reported in the prior-year quarter [6] Annual Performance - For the full year 2025, revenues were $6.05 billion, compared to $4.77 billion in 2024 [7] - Adjusted EBITDA for 2025 was $620 million, up from $181.3 million in 2024 [7] - Adjusted EPS for 2025 was 66 cents, compared to 24 cents in the previous year [7] Future Guidance - DraftKings anticipates 2026 revenues to be between $6.5 billion and $6.9 billion, indicating approximately 39.6% year-over-year growth [10] - Expected adjusted EBITDA for 2026 is projected to be between $700 million and $900 million, a significant increase from $181.3 million in 2024 [10]