DraftKings (DKNG) Stock Dips After EPS Miss Despite Revenue Beat

TLDR

• DraftKings posted Q1 revenue of $1.65B, up 17% YoY, beating forecasts of $1.63B
• EPS came in at 20 cents, missing the 22-cent analyst estimate
• The company swung to a $21.1M profit vs. a $33.9M loss in Q1 2025
• CEO Jason Robins highlighted prediction markets as a major strategic priority
• DKNG stock was down 1.4% in premarket Friday after gaining 5.4% the session before

DraftKings posted a solid first quarter, but Wall Street’s focus quickly shifted to what was missed rather than what was made.

The company reported Q1 revenue of $1.65 billion, a 17% jump from a year ago, edging past analyst forecasts of $1.63 billion. It also swung to a profit of $21.1 million, or 3 cents a share, compared with a loss of $33.9 million in the same period last year.

But adjusted EPS came in at 20 cents, short of the 22-cent consensus estimate. That was enough to nudge DKNG stock down 1.4% in premarket trading Friday, pulling back after a 5.4% gain the day before.

DraftKings Inc., DKNG

The sportsbook side of the business performed well. Sportsbook revenue jumped 24% year-over-year, and margins improved. DraftKings also reaffirmed its full-year 2026 revenue guidance of $6.5 billion to $6.9 billion.

Prediction Markets Take Center Stage

If there was one theme running through the earnings letter, it was prediction markets. Robins mentioned DraftKings Predictions more than 20 times, signaling how seriously the company is treating the space.

The urgency isn’t hard to understand. DKNG stock is down 28% since the start of 2026. Platforms like Kalshi and Polymarket have been offering event contracts that closely mimic sports betting in states where traditional sportsbooks can’t operate, sidestepping the taxes and regulations that companies like DraftKings have to navigate.

By building its own prediction market platform and integrating it into the main DraftKings app, the company is trying to turn a threat into an opportunity. Customer acquisition costs for DraftKings Predictions dropped more than 80% in April, according to Robins.

Market Making and Parlays Next

DraftKings has also moved into market making on prediction markets — acting as a counterparty in certain trades rather than just connecting two bettors. Rival Flutter, parent of FanDuel, announced a similar strategy this week.

Next on the roadmap for DraftKings Predictions: parlay bets. Parlays are high-margin products for sportsbooks, combining multiple bets into a single long-shot wager. Adding them to the prediction market platform would bring it much closer to a traditional sportsbook experience.

DraftKings backed its full-year 2026 revenue guidance of $6.5 billion to $6.9 billion, unchanged from prior forecasts.

The post DraftKings (DKNG) Stock Dips After EPS Miss Despite Revenue Beat appeared first on CoinCentral.