Key Highlights
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- DraftKings announced Q1 revenue of $1.65 billion, marking a 17% year-over-year increase, while surpassing adjusted EBITDA projections with a record-setting $168 million
- A newly established market-making division launched this year has achieved profitability, representing one of the company’s quickest segments to reach this milestone
- Trading volume from consumers on DraftKings Predictions surpassed $1 billion in April, with annualized figures exceeding $2.3 billion
- Kalshi secured $1 billion in Series F financing at a $22 billion valuation, exceeding the combined market capitalizations of Flutter and DraftKings
- DraftKings maintained its 2026 annual revenue projections of $6.5 billion to $6.9 billion and expects to allocate $200 million to $300 million toward predictions initiatives this year
DraftKings exceeded first-quarter earnings expectations on Friday, showcasing revenue expansion and record-breaking adjusted EBITDA while accelerating its entry into prediction markets.
The sports betting and gaming platform announced $1.65 billion in quarterly revenue, representing a 17% climb compared to the corresponding period in 2025. These figures aligned with Wall Street projections.
Adjusted EBITDA reached $168 million, surpassing analyst expectations and establishing a new first-quarter benchmark for the company. CEO Jason Robins conveyed optimism during the earnings call, a notable shift from the more conservative outlook DraftKings presented in February.
A major discussion point centered on the company’s expanding prediction markets operations. DraftKings established a market-making division earlier in 2026, and according to Robins, it has already generated positive returns.
He described it as among the company’s “fastest to profitability” business segments ever launched.
Market makers facilitate liquidity on prediction platforms by guaranteeing that trades find matching counterparties. The space currently features only a select group of major participants, including Susquehanna International Group and Jump Trading.
DraftKings Pursues Dominance in Sports Prediction Markets
DraftKings also intends to launch a proprietary prediction market exchange via Railbird Exchange LLC, which it purchased last October for $84.8 million. The platform will enable combination trades for users.
Robins expressed the company’s ambition to establish itself as a frontrunner in sports predictions 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 infrastructure and expertise.
Consumer trading volume on DraftKings Predictions crossed the $1 billion threshold in April. Annualized volume traded surpassed $2.3 billion, with month-over-month growth of 38% and 43% across these metrics respectively.
The company indicated that predictions have minimally affected sportsbook handle to date, creating a negligible impact on overall revenue.
DraftKings maintained its 2026 full-year revenue outlook of $6.5 billion to $6.9 billion and adjusted EBITDA guidance ranging from $700 million to $900 million. CFO Alan Ellingson noted that for the first time, annual projections incorporate prediction market investments, anticipated to range between $200 million and $300 million for the current year.
Industry-Wide Competition Intensifies
The prediction markets sector has grown increasingly competitive. Total industry trading volume reached nearly $30 billion last month. Kalshi and Polymarket collectively accounted for approximately $24 billion in April volume, with Kalshi commanding a 62% market share.
Approximately 72% of Kalshi’s trading volume originated from sports-event contracts, according to Bernstein data.
Robinhood reported $147 million in “other transaction revenue” during the first quarter, reflecting a 320% year-over-year surge. This revenue category consists predominantly of event contract trading fees.
Competitor Flutter disclosed on its Wednesday earnings call that FanDuel intends to introduce a market-making platform before the end of this year. FanDuel has already initiated a pilot program for market-making services on a third-party prediction platform.
On Thursday, Kalshi unveiled a $1 billion Series F funding round that assigned the company a $22 billion valuation. This valuation surpasses both Flutter and DraftKings, which held market capitalizations of $17.7 billion and $12.9 billion respectively on Friday.
DraftKings shares climbed more than 7% to reach a session peak of $27.21 before retreating. By midday ET, the stock was trading at $25.92, representing a 2.78% gain.
The stock remains down approximately 25% over the trailing 12-month period. In February, shares dropped 20% following the company’s conservative guidance announcement.
DraftKings identified multiple risk factors associated with predictions in an SEC filing, including its capacity to develop innovative offerings and maintain competitiveness in the emerging market. FanDuel, Fanatics, and DraftKings have not disclosed specific prediction market revenue forecasts for 2026.
