Core Insights - DraftKings reported a record revenue of $1,989 million for Q4 2025, a 43% increase from $1,393 million in Q4 2024, driven by strong customer engagement and higher Sportsbook net revenue margin [2][3] - The company achieved positive net income for fiscal year 2025, with total revenue exceeding $6 billion, marking a 27% increase from the previous year [3] - DraftKings plans to invest in its DraftKings Predictions product to enhance customer experience and acquire new users [3] Financial Performance - Q4 2025 revenue was $1,989 million, up $596 million or 43% year-over-year [2] - Fiscal year 2025 revenue reached over $6 billion, a 27% increase compared to fiscal year 2024 [3] - Adjusted EBITDA for Q4 2025 was $343,202 thousand, compared to $89,454 thousand in Q4 2024 [17] Customer Metrics - Monthly Unique Payers (MUPs) remained stable at 4.8 million in Q4 2025, with a 5% increase when excluding Jackpocket [7] - Average Revenue per MUP (ARPMUP) was $139 in Q4 2025, reflecting a 43% increase from the same period in 2024 [7] Future Guidance - DraftKings provided fiscal year 2026 revenue guidance of $6.5 billion to $6.9 billion and Adjusted EBITDA guidance of $700 million to $900 million [7] - The guidance reflects expected investments in DraftKings Predictions and new jurisdiction launches [7] Market Presence - DraftKings operates mobile sports betting in 26 states and Washington, D.C., covering approximately 52% of the U.S. population [7] - The company is also active in iGaming in 5 states, representing about 11% of the U.S. population [7]

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 negative $127 million, impacted by customer-friendly sports outcomes that affected revenue by over $300 million [16][10] - The company revised its fiscal year 2025 revenue guidance to $5.9 billion-$6.1 billion and adjusted EBITDA guidance to $450 million-$550 million, reflecting a growth of 24%-28% compared to fiscal year 2024 [18] Business Line Data and Key Metrics Changes - Sportsbook handle increased by 10% year-over-year to $11.4 billion, with strong engagement driven by promotions [17] - iGaming net revenue growth accelerated to 25% year-over-year, marking the fastest growth since Q1 2024 [8] - The 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] Market Data and Key Metrics Changes - NFL handle grew 13% season to date, while NBA handle increased by 19% season to date, indicating an acceleration in growth compared to previous quarters [7] - Total sportsbook handle increased by 17% year-over-year in October [8] Company Strategy and Development Direction - The company is optimistic about future growth, driven by exclusive marketing agreements with ESPN and NBCUniversal, and the upcoming launch of DraftKings Predictions [5][12] - The focus will be on states without existing online sports betting, aiming to capture a new customer base and revenue stream [12][41] - The share repurchase program has been increased from $1 billion to $2 billion, indicating confidence in future cash flow [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of sports outcomes on financial results but emphasized that over time, these variances typically normalize [10][24] - The company remains confident in its long-term financial potential, citing strong customer retention rates and product enhancements driving engagement [5][7] - Management expressed excitement about the potential of DraftKings Predictions to expand the total addressable market [12] Other Important Information - The company is developing a Spanish-language app to cater to a growing demographic ahead of the 2026 World Cup [9][93] - The company has made significant progress in growing its sportsbook hold percentage and net revenue margin, primarily due to an increasing parlay handle mix [9] Q&A Session Summary Question: OSB hold percentage and confidence in future swings - Management acknowledged the frustration with recent outcomes but noted that over time, results tend to normalize, and the business model remains strong [21][24] Question: Value addition of new board member Greg Went - Management expressed excitement about Greg Went's expertise in gaming investment and his potential contributions to the company's strategy [25] Question: Volatility of hold due to parlay increases - Management indicated that while parlay betting can increase volatility, the focus remains on maximizing long-term value while managing risk appropriately [29][30] Question: Profitability of prediction markets - Management plans to adopt a conservative approach to investment in prediction markets, focusing on data-driven decisions and shorter payback periods [32][33] Question: Conversations with regulators regarding prediction markets - Management emphasized the importance of relationships with regulators and the strategic focus on states without existing online sports betting [38][41] Question: Significance of ESPN deal - Management highlighted the long-standing relationship with ESPN and the potential for significant customer engagement through integrated marketing efforts [51][52] Question: Breakdown of the $300 million impact on guidance - Management indicated that most of the impact was due to sports outcomes, with some additional considerations for prediction market spending [62] Question: Investment strategy for next year - Management stated that there would be minimal incremental investment in core business areas, with a focus on new states and AI technology [70] Question: Customer acquisition through Spanish-language app - Management expressed optimism about the potential for the Spanish-language app to capture a significant share of the growing Hispanic demographic [93][95] Question: Attribution of growth in parlay mix - Management attributed the growth in parlay mix to product innovation and effective promotional strategies [98][100]