DraftKings Q2 Results Dinged by Knicks, World Cup, Prediction Market Momentum Building

DraftKings (NASDAQ: DKNG) reported second-quarter results today that missed Wall Street forecasts, but the company’s prediction market stood out as a silver lining in the report.

On a non-generally accepted accounting principles (non-GAAP) basis, the gaming company notched June quarter earnings of nine cents a share on revenue of $1.44 billion. Analysts expected non-GAAP earnings of 19 cents on sales of $1.55 billion. In another sign the second quarter was unkind to sportsbook operators, DraftKings’ revenue slipped 5% year-over-year while adjusted earnings before interest, taxes, depreciation slid to $114.64 million from $300.6 million a year earlier. The company posted a net loss of $67.6 million after generating net income of $157.9 million in the second quarter of 2025.

The New York Knicks winning the NBA championship and a spate of customer-friendly outcomes on the World Cup were among the drags on DraftKings’ second-quarter results. However, the operator reiterated 2026 guidance calling for revenue of $6.5 billion to $6.9 billion and adjusted EBITDA of $700 million to $900 million.

Earlier this week, FanDuel parent Flutter Entertainment (NYSE: FLUT) trimmed its 2026 outlook.

Prediction Markets a Bright Spot

Spending on DraftKings Predictions has been a source of concern for some analysts and investors, the gaming company sees momentum in its yes/no exchange and at an opportune time at that.

DraftKings launched its DKeX exchange in late June, indicating the full benefits of that integration weren’t on display in the current quarter, but it is clear the operator is already wringing benefits from its market making operation as the below, courtesy of the company, confirms.

The Boston-based company said DraftKings Predictions has garnered more than 600,000 customers year-to-date while total traded volume on the platform surged 5x from April to July.

Customer Acquisition, Costs Trending the Right Way

DraftKings’ second-quarter results are an example of the house not always winning, but in addition to the aforementioned prediction market progress, there were other areas of strength.

For example, customer acquisition surged 73% year-over-year while DraftKings drove related costs down 8%, marking the gaming company’s best quarter for customer acquisition costs since the first three months of 2025. Reduced customer acquisition expenditures are vital at a time when some industry observers are speculating that the 2026 NFL season could bring a surge in promotional spending by prediction market and sportsbook operators.

Sports consumer volume increased 15%, indicating that the operator’s core business is healthy and that it may be able to realize long-term benefit from prediction markets.