DraftKings shares decline following lowered revenue guidance
DraftKings lowered its full-year revenue outlook and cited heavy investments in prediction markets as the company faces investor scrutiny.
DraftKings shares fell 23.6% on Friday, reaching a six-month low following a third-quarter earnings report that missed previous revenue expectations. The company adjusted its full-year guidance to between $6.35 billion and $6.55 billion, down from the earlier projection of $6.5 billion to $6.9 billion.
The revenue revision is linked to a $650 million to $700 million investment into prediction market products. DraftKings is currently positioning itself to compete with platforms like Kalshi and Polymarket, which facilitate wagering on real-world events such as elections.
CEO Jason Robins stated that the new prediction offering is generating engagement from 1.6 million customers, though the costs of acquiring these users are currently offsetting immediate gross revenue. The company also issued a 2027 revenue forecast of $7.35 billion to $7.75 billion, a figure that analysts noted falls below the consensus of $7.6 billion.
Year-to-date, DraftKings stock has declined by more than 49%, reflecting investor concern over the timeline for profitability amidst aggressive spending on new business lines.