Group 1 - The core point of the article highlights that sportsbook profits tend to increase when favored teams lose, which can positively impact companies like DraftKings and Flutter Entertainment [1] Group 2 - The upset victory of UConn over Duke serves as a case study illustrating the dynamics of sportsbook profitability [1] - The article suggests that unexpected outcomes in sports betting can lead to higher revenues for sportsbooks [1]

Core Insights - DraftKings Inc. (NASDAQ:DKNG) is identified as one of the 15 large-cap stocks under $30 with significant upside potential [1] - The company is enhancing user experience by linking accounts with The Walt Disney Company (NYSE:DIS), providing exclusive features and personalized services [1][2] - DraftKings is expanding into prediction markets, aiming to operate in all 50 U.S. states and challenge industry leader Kalshi [3] Group 1: Account Linking and User Engagement - Account linking is being introduced ahead of the March Madness tournaments, which have seen their highest viewership in over 30 years [2] - Fans who link their accounts will receive a complimentary month of ESPN Unlimited, enhancing fan engagement during the college basketball season [2] - Stephanie Sherman, CMO of DraftKings, emphasizes the commitment of both companies to enhance fan involvement [2] Group 2: Business Strategy and Market Expansion - DraftKings is preparing to replicate its online sports betting strategy in the prediction markets [3] - The company aims to challenge Kalshi, the current leader in the prediction market space [3] - DraftKings operates a vertically integrated technology platform offering online betting, fantasy sports, and digital lottery products [4]

Core Viewpoint - DraftKings presents a significant investment opportunity with a price target of $50, which is approximately double its current stock price of $23.67, indicating potential for solid performance in the coming years [2][5]. Company Overview - DraftKings has a market capitalization of $12 billion and operates within a competitive landscape that includes regulatory challenges and emerging prediction markets [6][3]. - The company is leveraging its brand strength and technological advantages to capture a larger share of the expanding online gaming and sports betting market [6]. Market Potential - Management forecasts the total addressable market for DraftKings to grow from $34 billion in 2025 to between $55 billion and $80 billion by 2030, representing a midpoint growth of 15% [4]. - The prediction market segment is expected to become a $10 billion gross revenue opportunity for DraftKings, with higher gross margins than traditional sportsbooks, leading to accelerated revenue and earnings growth [6][7]. Strategic Initiatives - DraftKings has launched its own prediction market to compete with other platforms, integrating it into its existing sportsbook for a seamless user experience [3]. - The company plans to utilize advanced technology to act as a market maker in prediction markets, which could enhance its revenue streams and profitability [7]. Financial Outlook - Management's guidance for 2026 includes an adjusted EBITDA of $800 million, with the current enterprise value being 16.5 times that figure, suggesting a favorable valuation [8]. - Analysts expect strong EBITDA growth in 2027, with the company's current valuation at just 10 times its expectations, indicating a significant margin of safety and potential for stock price appreciation [8].

Core Viewpoint - DraftKings Inc (NASDAQ:DKNG) shares are experiencing a surge amidst a generally declining market, driven by positive analyst upgrades and a strong long-term growth outlook [1][2]. Analyst Optimism - Multiple firms have reiterated bullish ratings on DraftKings, contributing to the stock's upward momentum. BMO Capital raised its price target from $42 to $50 while maintaining an Outperform rating. Citizens set a target of $38 with a Market Outperform rating, and Needham and BTIG both reiterated Buy ratings with $35 targets [2]. Long-term Growth Story - BMO highlighted DraftKings' Investor Day outlook, projecting a 15% five-year CAGR for the total addressable market, reaching approximately $67.5 billion. The firm anticipates long-term adjusted EBITDA margins exceeding 30%. DraftKings plans to integrate its Sportsbook, iGaming, and Predictions products into a single Super App to enhance cross-selling and reduce customer acquisition costs [3]. Prediction Markets Potential - Analysts see significant long-term potential in prediction markets, estimating they could generate around $10 billion in gross revenue with margins between 60% and 80%, surpassing the company's sportsbook margins. DraftKings has maintained solid fundamentals, with gross profit margins of 76% over the past year. BMO reiterated the stock as a Top Pick, noting its attractiveness at roughly 10× expected 2027 adjusted EBITDA [4]. Technical Picture - DraftKings is showing a mixed technical picture, trading above the 20-day simple moving average (SMA) but below longer-term averages, indicating short-term strength while highlighting ongoing struggles with the 50-day, 100-day, and 200-day SMAs, which suggest a bearish trend overall [5]. Relative Strength Index and MACD - The relative strength index (RSI) is at 38.34, indicating a neutral position, while the MACD is above its signal line, suggesting bullish momentum. However, caution is advised as this bullish signal may be short-lived given the overall bearish trend [6]. Support and Resistance Levels - DraftKings has a crucial support level at $21.00; a drop below this could indicate further downside. Conversely, breaking above the 50-day SMA near $29.85 may signal a potential trend reversal [7]. Death Cross and Market Position - A death cross occurred in October when the 50-day SMA crossed below the 200-day SMA, marking a significant bearish signal. This crossover has contributed to the ongoing downtrend, and the stock has declined by 40.30% over the past 12 months, indicating it is in a corrective phase [8][9]. Current Price Action - As of the latest publication, DraftKings shares were up 3.06% at $24.55, reflecting a position at 13.8% of its 52-week range, closer to its low of $21.01 than its high of $48.78, suggesting bearish sentiment [10].

4Q 2025 Earnings Review February 23, 2026 DISCLAIMERS Forward-Looking Statements Certain statements made in this presentation are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, Super Group's intention to pay a dividend, including the expected timing of such dividend, expectations and projections of market opportunity, growth and profitabili ...

Core Viewpoint - DraftKings reported strong growth in Q4 but issued conservative guidance, leading to a significant drop in its stock price, which is down approximately 35% year to date [1] Financial Performance - For Q4, DraftKings' revenue surged 43% to $1.99 billion, with sportsbook revenue increasing 64% to $1.4 billion and handle growth accelerating to 13% [5] - The company's net revenue margin improved by 250 basis points to 8%, driven by an increase in parlay betting, while iGaming revenue climbed 17% to $500 million [5] - Adjusted EBITDA skyrocketed fourfold year-over-year to $343 million, and adjusted EPS rose from $0.14 to $0.36 [6] Future Projections - DraftKings projected 2026 revenue between $6.5 billion and $6.9 billion, below the $7.3 billion analyst consensus, and forecasted adjusted EBITDA between $700 million and $900 million, short of the $998 million consensus [7] - The high end of the revenue guidance still represents a 14% growth, while EBITDA growth is projected at 45% [7] Market Dynamics - The stock has faced pressure due to the emergence of prediction market platforms that resemble sports betting, prompting DraftKings to launch its own prediction market platform [3] - CEO Jason Robins identified the prediction market as a significant growth opportunity, noting no adverse effects on its sportsbook from these new platforms [4]

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]

Financial Data and Key Metrics Changes - In Q4 2025, revenue grew 43% year-over-year to nearly $2 billion, with Adjusted EBITDA reaching $343 million, four times the prior year period [5][14] - Adjusted EBITDA margin expanded by over 1,000 basis points year-over-year to 17% [5][14] - For the fiscal year 2025, revenue increased 27% year-over-year to above $6 billion, and Adjusted EBITDA more than tripled to over $600 million [7][17] Business Line Data and Key Metrics Changes - Fantasy revenue increased as Pick6 began to scale [14] - Sportsbook revenue increased over 30% year-over-year, with a standout Q4 where revenue rose 64% year-over-year to $1.4 billion [15] - iGaming revenue grew by 20% due to expanded offerings [15] - Lottery revenue benefited from a stronger jackpot environment and the rollout of new games [15] Market Data and Key Metrics Changes - Sportsbook handle increased 11% year-over-year to $54 billion, with a total potential payout across all open wagers of $2.5 trillion [16] - In January, Sportsbook handle increased 4% year-over-year, despite two consecutive months of Sportsbook-friendly outcomes [8] Company Strategy and Development Direction - The company is focusing on the predictions market as a significant growth opportunity, expecting to capture a $10 billion annual gross revenue opportunity [10] - Plans to integrate Railbird and launch a market-making division to enhance customer experience and liquidity [12][13] - The company aims to lead the predictions category while maintaining strong positions in existing markets [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the predictions market, citing a stable regulatory environment as a key factor [22][23] - The company anticipates continued revenue and Adjusted EBITDA growth for many years, with a focus on customer acquisition and retention [8][17] - Management acknowledged the importance of optimizing promotional spending and improving customer monetization [40][68] Other Important Information - The company repurchased 16 million shares during the fiscal year and plans to remain active in share repurchases as Adjusted EBITDA grows [5][17] - The company reported positive net income for the first time, indicating improved operational efficiency [17] Q&A Session Summary Question: Discussion on prediction markets and investment confidence - Management highlighted regulatory clarity from the CFTC as a significant factor in their increased focus on prediction markets, viewing it as a major growth opportunity [22][23] Question: Guidance on revenue deceleration - Management explained that the guidance reflects a conservative approach, with expectations for sports betting handle and promotional strategies factored in [25][26] Question: Competitive environment and promotional intensity - Management characterized the current promotional environment as rational, with no significant uptick in promotional activity from smaller operators [71][86] Question: Customer demographics in prediction markets - Management noted that prediction market players tend to be from states like California and Texas, resembling existing customer profiles [90][91] Question: Impact of promotional spending on revenue - Management indicated that promotional spending would be strategically managed, with flexibility to adjust based on customer acquisition and retention metrics [88][86]

Financial Data and Key Metrics Changes - In Q4 2025, revenue grew 43% year-over-year to nearly $2 billion, with Adjusted EBITDA reaching $343 million, four times the prior year period [4][13] - Adjusted EBITDA margin expanded by over 1,000 basis points year-over-year to 17% [4][13] - For fiscal year 2025, revenue increased 27% year-over-year to above $6 billion, and Adjusted EBITDA more than tripled to over $600 million [6][16] Business Line Data and Key Metrics Changes - Fantasy revenue increased as the Pick Six product began to scale [13] - Sportsbook revenue rose over 30% year-over-year, with Q4 revenue increasing 64% year-over-year to $1.4 billion [14] - iGaming revenue grew by 20% due to expanded offerings [14] - Lottery revenue benefited from a stronger jackpot environment and the rollout of new games [14] Market Data and Key Metrics Changes - Sportsbook handle increased 11% year-over-year to $54 billion, with a total potential payout across all open wagers reaching $2.5 trillion [15] - In January, Sportsbook handle increased 4% year-over-year, despite sportsbook-friendly outcomes [7][15] Company Strategy and Development Direction - The company is focusing on the predictions market as a significant growth opportunity, targeting hundreds of millions in annual revenue in the coming years [5][9] - Plans include integrating Railbird and launching a market-making division to enhance customer experience and liquidity [11][12] - The company aims to lead the predictions category and is optimistic about regulatory developments that support this growth [9][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's efficiency and sustainability, expecting revenue and Adjusted EBITDA growth for many years [6][7] - The regulatory environment has improved, providing a stable backdrop for predictions, which is seen as a major growth area [20][21] - Management acknowledged the importance of customer acquisition and retention, with a focus on optimizing promotional strategies [38][39] Other Important Information - The company repurchased 16 million shares during fiscal year 2025 and plans to continue share repurchases as Adjusted EBITDA grows [4][16] - The company reported positive net income for the first time, indicating improved operational efficiency [16] Q&A Session Summary Question: Discussion on prediction markets and investment confidence - Management highlighted regulatory clarity from the CFTC as a key factor in their increased focus on prediction markets, viewing it as a significant growth opportunity [20][21] Question: Guidance on revenue deceleration - Management explained that the guidance reflects a conservative approach, with expectations of handle growth and net revenue margin improvements [24][25] Question: Revenue drivers for 2026 - Predictions are seen as an upside opportunity, with no revenue included in the guidance for 2026, focusing instead on customer acquisition costs [31] Question: Competitive environment and promotional intensity - Management characterized the current promotional environment as rational, with no significant uptick in promotional activity from competitors [70][85] Question: Legislative updates on prediction markets - Management noted that discussions around prediction markets are gaining traction in state legislatures, which could influence future legalization of online sports betting [72]

FY 2025 EARNINGS PRESENTATION February 12, 2026 | 1 Legal Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements about DraftKings Inc. ("DraftKings", the "Company", "we", "us", and "our") and its industry that involve substantial risks and uncertainties. All statements, other than statements of historical fac ...