DraftKings’ Profit Breakthrough Isn’t Enough for Wall Street

DraftKings reported fiscal fourth-quarter revenue of nearly $2 billion for the three months ending Dec. 31, 2025, a 43% increase compared to the same time period last year. It also reported positive net income—$3.7 million on the year—for the first time in company history (DraftKings was founded in 2012). Last year, the company reported a total net loss of $507 million.

“Our core business is strong as we enter 2026,” said Jason Robins, CEO and cofounder of DraftKings, in a Thursday press release. 

Still, the market punished the sports betting giant because it issued a 2026 sales forecast that fell below analyst estimates. Shares fell by as much as 16% following the results release on Thursday, down roughly 4.3%. . Shares are down more than 50% in the last year.

The market’s reaction can be attributed in part to the fact that analysts generally expected the company’s 2026 sales guidance to be roughly $7.3 billion; DraftKings reported expected guidance of between $6.5 billion and $6.9 billion. Analysts were also concerned about a deceleration in the company’s handle—or total dollars bet by customers. Citizens noted that DraftKings’ handle increased by 4% in January, lower than the 11% increase the company saw a year ago.

J.P. Morgan analysts called the revenue guidance “disappointing” and said it is “unlikely to calm investor fears that handle declines are attributable to prediction markets, especially as it coincides with [DraftKings] more aggressively investing in the nascent category.”

“I thought we had a good year,” Robins said, adding he’s “very frustrated” DraftKings didn’t beat its guidance. He expressed no concern about prediction-market platforms like Kalshi and Polymarket potentially eating into DraftKings’ business.

DraftKings appears primed to invest significantly in prediction markets this year: it launched its app, DraftKings Predictions, in 38 states in late December, with sports event contracts only available in states where online sports betting is still illegal, like California, Texas, and Georgia. Earlier this month, it leaned further into prediction markets through a new deal with Crypto.com.

“There’s real opportunity here,” Robins told Front Office Sports on Radio Row ahead of Super Bowl LX. “We’ll see how big it ultimately can be.”

In a letter to shareholders issued in conjunction with the latest results, Robins said the company sees “a massive, incremental opportunity in DraftKings Predictions.”

“We plan to deploy growth capital to build the best customer experience in Predictions, and acquire millions of customers,” he said. 

Robins noted the industry is “rapidly developing,” and said DraftKings is “moving with urgency.” As two examples, in the second quarter of 2026 the company intends to integrate Railbird—the federally licensed exchange it acquired over the summer in a deal worth up to $250 million—and it will also launch its own market-making division to boost liquidity in prediction-market offerings. Robins forecasted “hundreds of millions in annual revenue for DraftKings Predictions in the years ahead.” He called prediction markets “the most exciting new growth opportunity we have seen since PASPA was struck down in 2018,” referring to the U.S. Supreme Court decision that allowed states to begin legalizing, and regulating, sports betting. 

In Friday’s earnings call, Robins noted the “most common theme” DraftKings is seeing in prediction markets is that the users “tend to be Californians and Texans.” (Sports betting is illegal in those states.)

“Otherwise, they look a lot like our existing customers,” he said.

Robins also signaled support for the Commodity Futures Trading Commission, the federal regulator that oversees prediction markets, citing the agency’s “engagement on event contracts and the advancement of a more defined and durable regulatory framework.” That comes as no surprise—Robins was among 35 executives named to the CFTC’s new “innovation advisory committee.” Others include Kalshi cofounder and CEO Tarek Mansour, Polymarket founder and CEO Shayne Coplan, and Robinhood cofounder and CEO Vlad Tenev.

Robins said there’s been “real lean in” from the CFTC since new chair Mike Selig was approved, noting the regulator has gone from a “hands off, not gonna comment posture” to “full-fledged affirmation that this is something the CFTC considers to be firmly under its jurisdiction.” 

“Anything that creates a stable regulatory environment and allows us to operate freely is a real upside for us,” he said.