Financial Data and Key Metrics Changes - In Q3 2025, the company generated $1,144 million in revenue, representing a 4% year-over-year growth [16] - Adjusted EBITDA for Q3 was -$127 million, which was below expectations due to customer-friendly sports outcomes impacting revenue by over $300 million [16][10] - The fiscal year 2025 revenue guidance was revised to $5.9 billion-$6.1 billion, implying a growth of 24%-28% compared to fiscal year 2024 [18] Business Line Data and Key Metrics Changes - Sportsbook handle increased 10% year-over-year to $11.4 billion, with NFL handle growing 13% and NBA handle growing 19% season-to-date [17][7] - iGaming net revenue growth accelerated to 25% year-over-year, marking the fastest growth since Q1 2024 [8] - Customer retention rates for NFL Week One customers improved by over 300 basis points compared to the same weeks a year ago [7] Market Data and Key Metrics Changes - Total Sportsbook handle increased 17% year-over-year in October [8] - Parlay handle mix surged with year-over-year gains of 800 basis points for NFL and 1,000 basis points for NBA season-to-date [8] - Nearly half of the U.S. population remains without access to legal online sports betting, presenting a significant growth opportunity [12] Company Strategy and Development Direction - The company is launching DraftKings Predictions, which is viewed as a significant incremental opportunity to expand the total addressable market [11] - Exclusive marketing agreements with ESPN and NBCUniversal are expected to enhance brand affinity and broaden reach [8] - The company plans to focus on states where it does not currently offer Sportsbooks, targeting areas with the most financial opportunity [13] Management's Comments on Operating Environment and Future Outlook - Management expressed strong confidence in the long-term financial potential of the company, despite revising fiscal year 2025 guidance [5] - The impact of sports outcomes on financial results is acknowledged, with management emphasizing that these variances typically normalize over time [10] - The company is optimistic about the future growth of predictions and its potential to motivate more states to legalize online sports betting [12] Other Important Information - The board has authorized an increase in the share repurchase program from $1 billion to $2 billion, with plans to be active in share repurchases [14] - The company is investing in AI to improve cost structure and revenue trajectory, with some investments expected to pay back in 2026 [70] Q&A Session Summary Question: OSB hold percentage and confidence in recovery - Management acknowledged the frustration with recent customer-friendly outcomes but emphasized that over time, results normalize [21][22] Question: Addition of Greg Wendt to the board - Management expressed excitement about Greg Wendt's expertise in investing and capital markets, anticipating his contributions to strategy [25][26] Question: Volatility of hold due to Parlay - Management indicated that while increased parlay activity may introduce volatility, the focus remains on maximizing long-term value while managing risk [29][30] Question: Profitability of prediction markets - Management plans to adopt a conservative approach to investment in prediction markets, focusing on data-driven decisions as more information becomes available [32][33] Question: Conversations with regulators regarding prediction markets - Management highlighted the importance of relationships with regulators and the strategic focus on states without existing online sports betting [38][39] Question: Significance of the ESPN deal - Management emphasized the long-standing relationship with ESPN and the potential for significant growth through integration and marketing collaboration [51][52] Question: Impact of promotional spending on guidance - Management noted that most of the guidance adjustment was due to outcomes, with some additional spending anticipated for predictions and product development [62][63] Question: Investment focus for next year - Management indicated that core business investments would remain stable, with a focus on new states and AI technology [68][70] Question: Spanish-language app opportunity - Management expressed excitement about the upcoming Spanish-language app, particularly in light of the World Cup and the growing Hispanic demographic [92][95] Question: Attribution of parlay mix growth - Management attributed the growth in parlay mix to product innovation and effective promotional strategies, indicating a strong focus on this area moving forward [98][100]