Today, DraftKings (NASDAQ: DKNG) released its Q2 results, which fell short of Wall Street expectations. Nevertheless, the company’s prediction market emerged as a notable highlight.
On a non-GAAP basis, the gaming operator reported earnings of nine cents per share in the June quarter, alongside revenue of $1.44 billion. Analysts had projected non-GAAP earnings of 19 cents with sales reaching $1.55 billion. The second quarter proved challenging for sportsbook operators, with DraftKings experiencing a 5% year-over-year revenue decline and adjusted earnings before interest, taxes, and depreciation decreasing to $114.64 million from $300.6 million the previous year. The company recorded a net loss of $67.6 million, contrasting sharply with net income of $157.9 million from Q2 2025.
The New York Knicks’ NBA championship win and a series of favorable outcomes for customers during the World Cup negatively impacted DraftKings’ second-quarter performance. Nonetheless, the company reaffirmed its 2026 revenue forecast, expecting between $6.5 billion and $6.9 billion, along with adjusted EBITDA ranging from $700 million to $900 million.
This week, FanDuel’s parent company, Flutter Entertainment (NYSE: FLUT), adjusted its 2026 outlook downward.
Bright Prospects for Prediction Markets
While some analysts and investors expressed concerns about spending on DraftKings Predictions, the gaming company is witnessing positive momentum in its yes/no exchange at a pivotal moment.
“Our Super App is now available nationwide, and Predictions is already growing at a rate surpassing our expectations,” stated CEO and co-founder Jason Robins. “The alignment of Predictions customer metrics with those of our Sportsbook, our advantageous lifetime value position, and our innovative strategy for enhancing our Predictions offering all bolster our confidence in winning this category during the NFL season and beyond.”
DraftKings introduced its DKeX exchange in late June, indicating that the full advantages of this integration were not yet reflected in the current quarter. However, it is evident that the operator is already capitalizing on its market-making operations, as confirmed by the data provided by the company.
The Boston-based company revealed that DraftKings Predictions has attracted over 600,000 customers year-to-date, with total traded volume on the platform increasing fivefold from April to July.
Positive Trends in Customer Acquisition Costs
DraftKings’ Q2 results illustrate that not every quarter favors the house. However, beyond the strides made in prediction markets, other sectors also showed progress.
For instance, customer acquisition rose by 73% year-over-year while associated costs decreased by 8%, marking the company’s best performance for customer acquisition expenses since Q1 2025. Lower customer acquisition costs are crucial at a time when some industry experts anticipate that the 2026 NFL season might trigger a surge in promotional spending from prediction market and sportsbook operators.
Sports consumer volume was up 15%, indicating the operator’s core business remains robust and that it may reap long-term advantages from its prediction markets.