DraftKings Stock Plunges 19%: A $469 Million Loss Spooks Investors

DraftKings stock plunged about 19% in extended trading on Thursday, November 5, 2026, after the sports-betting company reported a third-quarter net loss of $468.7 million and issued 2027 earnings guidance that trailed analyst estimates. The selloff erased the stock's regular-session gain — DraftKings had closed up 1.8% at $23.52 — and made it one of the biggest after-hours losers on a brutal earnings night.

What happened

DraftKings reported third-quarter revenue of $1.329 billion, up 16.2% from $1.144 billion a year earlier, driven by healthy customer engagement and a higher sportsbook net revenue margin. On the surface, the top line grew. Underneath it, the losses widened sharply.

The net loss attributable to common stockholders reached $468.7 million, or $0.94 per share, compared with a $256.8 million loss, or $0.52 per share, a year earlier — an increase of about 82.5% in the net loss. The loss from operations widened to $493.1 million. Adjusted EBITDA was a loss of $316.9 million, and adjusted loss per share more than doubled to $0.53.

The biggest driver was spending. Sales and marketing expense jumped 68.1% to $605.7 million in the quarter, while cost of revenue rose 14.8% to $900.0 million. Product and technology spending rose 19.8% and general and administrative costs rose 14.3%, leaving total costs growing far faster than the 16% revenue gain.

Why it's blowing up

Three things hit at once. First, the quarter itself missed what investors wanted: revenue of $1.329 billion came in below the roughly $1.39 billion to $1.43 billion analysts had expected, according to earnings previews. Second, DraftKings cut its fiscal 2026 outlook. Third — and most damaging — its first fiscal 2027 earnings forecast trailed the average analyst estimate, according to Bloomberg reporting on the release.

The guidance tells the real story. DraftKings updated fiscal 2026 revenue guidance to $6.35 billion to $6.55 billion, with Adjusted EBITDA of just $175 million to $275 million. Management said that reflects a much larger investment in its Predictions business: $650 million to $700 million of Adjusted EBITDA investment in 2026 alone, including $175 million to $225 million in the fourth quarter. Predictions revenue, the company warned, will be immaterial in 2026 because customer promotions will offset most of the gross revenue it generates.

For 2027, DraftKings introduced revenue guidance of $7.35 billion to $7.75 billion — up 17% at the midpoint — and Adjusted EBITDA guidance of $800 million to $1.0 billion, which still includes about $300 million of Predictions investment at the midpoint. The core business is expected to deliver $1.15 billion to $1.25 billion of Adjusted EBITDA in 2027, but investors focused on the headline number that landed below expectations.

Key facts

• Stock move: Down about 19% in extended trading (Bloomberg via Binance and StockMarketWatch), after closing the regular session up 1.8% at $23.52.
• Revenue: $1.329 billion in Q3, up 16.2% year over year.
• Net loss: $468.7 million, or $0.94 per share, versus a $256.8 million loss a year earlier.
• Sports: Sportsbook handle rose 21.9% to $13.9 billion; sports revenue jumped 31.5% to $783.6 million as the net revenue margin improved to 5.6% from 5.2%.
• iGaming: Revenue rose just 2.1% to $460.9 million.
• Customers: Monthly unique payers rose about 13% to 4.1 million; average revenue per payer rose about 3% to $109.
• Predictions: More than 1.6 million customers have engaged with Predictions year to date; 2027 Predictions revenue is guided at $650 million to $750 million.

Sources: DraftKings Q3 release via Business Wire, Bloomberg via Binance, CDC Gaming, Global Gaming Insider.

What's next

Management will walk investors through the numbers on a conference call on Friday, November 6, from 8:30 a.m. to 9:15 a.m. ET. The questions are predictable: how long the Predictions spending lasts, whether the 2026 investment converts into the $650 million to $750 million of Predictions revenue guided for 2027, and whether marketing can come down without slowing payer growth.

CEO Jason Robins called the third quarter "a pivotal moment," saying Predictions is "now powering meaningful growth." CFO Alan Ellingson argued the core business generates significant free cash flow that is being deployed into Predictions at attractive payback periods. Thursday night's 19% drop shows investors are not yet willing to take that payback on faith — they wanted profit now, and DraftKings told them the profit is being spent on a new business instead. This article reports what happened and why markets reacted; it is not financial advice.

FAQ

Why did DraftKings stock fall 19%?

DraftKings reported a $468.7 million Q3 net loss, missed revenue expectations, cut its fiscal 2026 outlook, and issued 2027 earnings guidance below analyst estimates, sending shares down about 19% in extended trading.

How much revenue did DraftKings make in Q3 2026?

Revenue was $1.329 billion, up 16.2% year over year, with sports revenue up 31.5% to $783.6 million and iGaming revenue up 2.1% to $460.9 million.

What is DraftKings' 2027 guidance?

The company guided fiscal 2027 revenue to $7.35 billion to $7.75 billion and Adjusted EBITDA to $800 million to $1.0 billion, including about $300 million of investment in its Predictions business.

What is DraftKings Predictions?

Predictions is DraftKings' newer prediction-markets offering. More than 1.6 million customers have used it year to date, but the company is investing $650 million to $700 million in it in 2026, which is the main reason near-term profit guidance fell.