Abstract
DraftKings Inc. will release its fourth-quarter 2025 results after market close on February 12, 2026 Post Market, with consensus signaling an acceleration in revenue and a potential inflection in profitability as investors weigh forecasts against recent operational trends and segment performance.
Market Forecast
The market currently expects DraftKings Inc. to deliver fourth-quarter 2025 revenue of 1.96 billion US dollars, up 38.45% year over year, alongside adjusted EPS of 0.12, up 175.41% year over year; EBIT is projected at 71.11 million US dollars, up 181.96% year over year. Forecast margins are not disclosed; the company’s prior quarter gross profit margin was 71.27% and net profit margin was -22.45%.
The main business is anticipated to be driven by product mix and monetization improvements supported by efficient promotional spending and engagement metrics. The most promising segment is online gaming, with last quarter revenue of 451.30 million US dollars; segment-specific year-over-year data is not available.
Last Quarter Review
DraftKings Inc. reported prior-quarter revenue of 1.14 billion US dollars, up 4.43% year over year; gross profit margin was 71.27% and GAAP net profit attributable to the parent company was -257.00 million US dollars, resulting in a net profit margin of -22.45%, while adjusted EPS was -0.52, reflecting a 13.33% year-over-year improvement.
One notable financial highlight was the elevated gross profitability at 71.27%, demonstrating robust unit economics despite an earnings shortfall versus expectations. Main business performance was led by sports betting revenue of 596.12 million US dollars (52.11% of total) alongside online gaming revenue of 451.30 million US dollars; total revenue rose 4.43% year over year.
Current Quarter Outlook
Sports Betting
Sports betting is the largest revenue contributor and a primary determinant of near-term performance. With consensus revenue at 1.96 billion US dollars and adjusted EPS at 0.12, the implied operating leverage depends on promotional discipline and the quality of handle growth translating to sustainable hold and gross margin. The prior quarter’s 71.27% gross profit margin provides a constructive baseline, indicating that product mix and pricing are supportive, yet profitability remains sensitive to period-to-period outcomes that can swing net margins.
Operationally, product engagement and higher-value bet types can influence revenue per user, while careful calibration of promotional intensity against cohort profitability helps preserve margin trajectories. The last quarter’s net profit margin of -22.45% highlights the cost structure—in particular, user acquisition, taxes, and platform costs—that must be offset by revenue scale and improved unit economics to achieve the forecasted EPS of 0.12. For this quarter, the balance between top-line acceleration and operating expense containment will dictate whether EBIT can align with the 71.11 million US dollars forecast.
From a financial standpoint, consensus points toward year-over-year acceleration driven by enhanced monetization, while sequential dynamics hinge on timing effects in sports calendars and promotional deployment. The forecasted EBIT growth of 181.96% year over year underscores expectations for improved operating efficiency; however, the sensitivity of net outcomes to promotional strategies and event results remains a factor in short-term volatility. If the company sustains high gross margins near the recent 71.27% level while keeping variable costs in check, the path to positive net income will be more visible even as GAAP profitability lags adjusted metrics.
Online Gaming (iGaming)
Online gaming provides considerable potential for margin contribution, given its last quarter revenue base of 451.30 million US dollars and its historically favorable unit economics. The segment can benefit from cross-sell from the sports betting customer base, improving lifetime value and engagement frequency. With adjusted EPS forecast at 0.12 and EBIT at 71.11 million US dollars, the role of iGaming in driving mix improvement is important because it can lift blended margins when customer activity shifts toward products with more consistent take rates.
The revenue scale achieved last quarter indicates that iGaming is already entrenched within the company’s overall monetization framework. While segment-specific year-over-year growth data is not disclosed, an expansion in iGaming penetration would reinforce gross profit stability and resilience against volatility inherent in sports outcomes. This quarter, investors will examine whether iGaming’s revenue contribution grows as a percentage of total sales—last quarter it represented a substantial 451.30 million US dollars—potentially helping to smooth overall earnings and support the forecasted leap in adjusted EPS.
Strategically, sustaining product innovation and user experience enhancements could improve retention and conversion among existing cohorts. On the financial side, maintaining a disciplined approach to promotional credits in iGaming—where engagement responds consistently to product quality—can reinforce the gross margin profile and aid in delivering the consensus EBIT.
Key Stock Price Drivers This Quarter
The primary stock price drivers revolve around the magnitude of revenue outperformance or underperformance relative to the 1.96 billion US dollars consensus, the quality of margin results, and evidence of a transition toward sustained adjusted profitability. A key swing factor is whether adjusted EPS at 0.12 is met or exceeded, as this would underscore the ability to convert scale into earnings even with a cost base that produced a -22.45% net profit margin last quarter. Investors will also parse guidance and commentary around promotional spending, looking for signs of improved efficiency and stable cohort payback periods.
Another driver is the balance between sports betting and iGaming in the revenue mix. If iGaming’s share increases beyond recent levels, margins could show greater stability, underpinning EBIT performance. The last quarter’s elevated gross profit margin of 71.27% sets a high benchmark; reaffirmation of a similar margin range this quarter would likely be viewed positively if accompanied by tighter expense control. Management’s trajectory on cost of revenue and sales and marketing will be important to confirm whether the year-over-year EBIT improvement implied by consensus—181.96%—can be realized.
Lastly, the degree of alignment between segment performance and consensus expectations will influence sentiment. If sports betting revenue trends are solid and unit economics remain favorable, the 38.45% year-over-year revenue growth forecast looks achievable. Should the company deliver consistent execution on product features and user engagement while demonstrating promotional discipline, the earnings bridge to adjusted profitability becomes clearer, and the market could reward the stock even if GAAP net income remains below breakeven.
Analyst Opinions
Recent institutional views skew bullish, with multiple firms reiterating Buy ratings and supportive price targets, while a minority have expressed caution through price-target reductions and one rating downgrade. The prevailing majority is constructive: UBS maintained a Buy rating with a 56.00 US dollars price target, pointing to revenue scaling and improving earnings visibility. Citi reiterated Buy with targets of 56.00 US dollars and 48.00 US dollars in separate notes, emphasizing operating leverage potential as revenue accelerates. Argus Research affirmed Buy with a 40.00 US dollars target, underscoring confidence in the company’s monetization and margin framework. Jefferies reiterated Buy at 54.00 US dollars, highlighting trajectory toward adjusted profitability as a key support for valuation. TD Cowen maintained Buy with targets at 45.00 US dollars and 50.00 US dollars in recent communications, focusing on the strength of engagement and revenue growth. Bank of America Securities maintained Buy, reflecting continued belief in the earnings improvement potential as scale increases.
While several brokerages lowered price targets and one firm downgraded the rating to Underperform, citing competitive intensity, promotional costs, and margin headwinds, these views remain in the minority relative to the number of firms maintaining Buy stances. The aggregate of recent commentary suggests that analysts expect the company to deliver meaningful year-over-year top-line growth, with particular emphasis on the potential for improved earnings metrics in the near term. The focus for bullish institutions is the bridge from revenue scale to earnings, supported by the 38.45% forecasted revenue growth and the 175.41% forecasted increase in adjusted EPS.
In examining the upside and risks through this quarter’s lens, bullish perspectives concentrate on several measurable checkpoints. First, revenue performance against the 1.96 billion US dollars consensus is viewed as a primary catalyst for sentiment. Second, the ability to preserve or enhance gross margin from the prior quarter’s 71.27% will indicate whether product monetization strategies and promotional calibration are delivering consistent profitability at the unit level. Third, confirmation of the projected EBIT of 71.11 million US dollars—paired with a more favorable adjusted EPS outcome—would signal that the company is progressing along the path to sustainable adjusted profitability. These markers form the core of the majority opinion, anchoring the constructive stance on near-term earnings delivery and validating the Buy ratings that dominate institutional coverage.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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