DraftKings’ second-quarter results showed strong top-line momentum, with revenue surpassing Wall Street’s expectations and notable margin expansion. Management attributed this performance primarily to product enhancements in the Sportsbook segment, improved cost discipline, and favorable Sportsbook betting outcomes. CEO Jason Robins highlighted that “revenue growth accelerated to 37% year-over-year,” and noted that improved promotional efficiency and a higher Sportsbook hold percentage were significant contributors to the company’s adjusted EBITDA growth.
Is now the time to buy DKNG? Find out in our full research report (it’s free).
DraftKings (DKNG) Q2 CY2025 Highlights:
- Revenue: $1.51 billion vs analyst estimates of $1.43 billion (36.9% year-on-year growth, 5.9% beat)
- Adjusted EPS: $0.38 vs analyst expectations of $0.41 (6.3% miss)
- Adjusted EBITDA: $300.6 million vs analyst estimates of $243.6 million (19.9% margin, 23.4% beat)
- The company reconfirmed its revenue guidance for the full year of $6.3 billion at the midpoint
- EBITDA guidance for the full year is $850 million at the midpoint, above analyst estimates of $840.8 million
- Operating Margin: 10%, up from -2.9% in the same quarter last year
- Monthly Unique Payers: 3.3 million, up 200,000 year on year
- Market Capitalization: $21.4 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From DraftKings’s Q2 Earnings Call
- Shaun Clisby Kelley (Bank of America) asked about DraftKings’ approach to the emerging prediction markets. CEO Jason D. Robins said they are “monitoring” developments and evaluating tech and regulatory considerations, but have not yet made firm investment decisions.
- Stephen White Grambling (Morgan Stanley) inquired about offsetting rising state taxes through cost initiatives. Robins responded that renegotiating old state access and data rights deals and optimizing payments and AI-driven efficiencies could provide upside.
- Robin Margaret Farley (UBS) questioned stagnant unique user growth and customer mix. Robins attributed this to the loss of Jackpocket Texas users and clarified that the 80/20 revenue split remains typical, with broad diversification across the customer base.
- Ryan Ronald Sigdahl (Craig-Hallum) asked about the impact of passing Illinois’ new wager tax to customers. Robins admitted it was uncharted territory and said the company would monitor effects and potentially adjust strategies if needed.
- Bernard Jerome McTernan (Needham & Company) asked how the Simplebet acquisition would shape live betting for the NFL season. Robins credited Simplebet technology and team integration as key contributors to DraftKings’ leadership in live betting and expects further gains as a result.
Catalysts in Upcoming Quarters
In the coming quarters, our team will track (1) the pace and profitability of DraftKings’ Missouri Sportsbook launch, (2) continued growth in live betting engagement and its impact on overall handle, and (3) the company’s success in offsetting new state tax headwinds through cost discipline and renegotiated agreements. Progress on AI-driven cost optimization and regulatory developments in prediction markets will be additional areas of focus.
DraftKings currently trades at $43.20, down from $45.38 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
