Key Highlights
- DraftKings delivered first-quarter revenue of $1.65 billion, marking a 17% year-over-year increase, while achieving a record $168 million in adjusted EBITDA that surpassed analyst expectations
- A newly established market-making operation launched earlier in 2026 has achieved profitability, representing one of the company’s quickest paths to positive returns
- DraftKings Predictions saw consumer trading volume surpass $1 billion in April alone, with annualized volumes reaching beyond $2.3 billion
- Prediction market startup Kalshi secured $1 billion in Series F financing at a $22 billion valuation, eclipsing the market capitalizations of Flutter and DraftKings
- The company maintained its full-year 2026 revenue outlook of $6.5 billion to $6.9 billion while allocating $200 million to $300 million for prediction market initiatives
DraftKings exceeded Wall Street’s first-quarter earnings projections on Friday, showcasing revenue expansion and record-setting adjusted EBITDA while accelerating its entry into prediction markets.
The sports betting operator disclosed $1.65 billion in quarterly revenue, reflecting a 17% climb compared to the prior-year period. The figures aligned with analyst consensus estimates.
Adjusted EBITDA reached $168 million, surpassing market forecasts and establishing a new first-quarter benchmark for the company. During the earnings conference, CEO Jason Robins adopted an optimistic stance, departing from the conservative projections DraftKings had provided in February.
Much of the discussion centered on the company’s expanding prediction markets operations. DraftKings established a market-making operation earlier in 2026, and according to Robins, the division has already generated positive financial returns.
Robins characterized it as among the swiftest business segments to achieve profitability throughout the company’s existence.
Market makers facilitate liquidity on prediction platforms by guaranteeing that trades connect with opposing parties. Currently, only a select group of significant entities operate in this arena, including Susquehanna International Group and Jump Trading.
DraftKings Pursues Dominance in Sports Predictions Sector
DraftKings additionally intends to launch a proprietary prediction market exchange via Railbird Exchange LLC, the entity it purchased last October for $84.8 million. The platform will feature combination trading capabilities.
Robins expressed the company’s ambition to establish itself as a sports predictions leader before year-end. He informed analysts that DraftKings should “theoretically have one of the top two or three market makers in the world” based on its modeling expertise.
Consumer trading volume on DraftKings Predictions crossed the $1 billion threshold in April. Annualized trading volume exceeded $2.3 billion, with monthly growth rates of 38% and 43% across these metrics.
According to company statements, predictions have exerted minimal influence on sportsbook handle thus far, producing an insignificant impact on revenue streams.
DraftKings maintained its 2026 annual revenue guidance between $6.5 billion and $6.9 billion, alongside adjusted EBITDA projections of $700 million to $900 million. CFO Alan Ellingson noted that for the first time, the yearly forecast incorporates prediction market expenditures, anticipated to range from $200 million to $300 million in 2026.
Industry Competition Intensifies
The prediction markets sector has grown increasingly competitive. Industry-wide trading volume approached $30 billion last month. Kalshi and Polymarket collectively accounted for nearly $24 billion in April volume, with Kalshi commanding a 62% market share.
Approximately 72% of Kalshi’s trading activity originated from sports-event contracts, according to Bernstein data.
Robinhood reported $147 million in “other transaction revenue” during the first quarter, representing a 320% year-over-year surge. This revenue category predominantly consists of event contract trading fees.
Competitor Flutter disclosed during its Wednesday earnings call that FanDuel will introduce a market-making platform within the year. FanDuel has already initiated testing of market-making services on an external prediction platform.
Thursday brought news of Kalshi’s $1 billion Series F financing round, which assigned the company a $22 billion valuation. This valuation surpasses both Flutter and DraftKings, whose market capitalizations stood at $17.7 billion and $12.9 billion respectively on Friday.
DraftKings stock climbed more than 7% to reach an intraday peak of $27.21 before retreating. By midday Eastern Time, shares traded at $25.92, representing a 2.78% gain.
The stock remains down nearly 25% across the past twelve months. In February, shares plummeted 20% following the company’s conservative guidance announcement.
DraftKings identified multiple risk factors associated with predictions in an SEC disclosure, including its capacity to develop innovative products and maintain competitiveness in this emerging sector. FanDuel, Fanatics, and DraftKings have not disclosed specific prediction market revenue forecasts for 2026.
