- DraftKings Predictions is now live, unifying the ecosystem under one “Super App” roof
- The new platform slashed customer acquisition costs by a staggering 80% in April
- Revenue hit $1.65 billion in Q1, crushing estimates and fueling a 599% jump in EBITDA
DraftKings’ (NASDAQ: DKNG) is officially shedding its ‘sportsbook-only’ skin, reporting a record-breaking $1.65 billion in Q1 revenue as its unified ‘Super App’ strategy begins to consolidate the market under one powerhouse roof.
Announced in March, the operator’s all-encompassing mobile application now features DraftKings Predictions — the company’s prediction markets platform — and drove a decline in April prediction market customer acquisition costs of more than 80%.
Within Predictions, we have more than doubled markets available to trade, which is driving Predictions volume per customer above Sportsbook handle per customer,” wrote CEO and co-founder Jason Robins in his quarterly letter to shareholders. “In April, our annualized Predictions consumer volume exceeded $1 billion, and our annualized total volume traded exceeded $2.3 billion, an increase of 38% and 43% month-over-month, respectively.”
The gaming company launched its prediction market platform last December and it’s already seeing positive outcomes from its market-making business.
“We have also launched market making, which unlocks access to an additional layer of the value chain. Market making is already generating a positive return for us,” adds Robins. “In the coming weeks, we expect to launch our proprietary exchange and to begin offering combos.”
Combos is prediction market vernacular for parlays.
Q1 Update
DraftKings’ first-quarter results were solid with the operator reporting non-GAAP earnings per share of 20 cents, which beat the consensus estimate of 17 cents. Revenue of $1.65 billion beat Wall Street forecasts by $20 million.
Helped by higher sportsbook net revenue margins, average revenue per monthly unique player (ARPMUP) rose 21% year-over-year. The company also repurchased $99 million of its shares during the quarter.
Boston-based DraftKings maintained its 2026 outlook calling for revenue of $6.5 billion to $6.9 billion on adjusted EBITDA of $700 million to $900 million. An interesting footnote: DraftKings noted that 69% of sports prediction market volume is coming from states where sports wagering is prohibited.
DraftKings Sees Big Opportunity in Sports Event Contracts
While there’s debate pertaining to for how long sports derivatives can carry the prediction markets industry, the reality is those event contracts currently account for a substantial majority of volume on yes/no exchanges and while the percentage may decrease over time, sports will remain important to the industry.
That’s a plus for DraftKings, which can potentially leverage its established sportsbook capabilities for increased market share in the prediction markets arena. As Robins notes, whether it’s a traditional sports bet or an event contract, positive outcomes for operators boil down to “compelling markets, pricing, liquidity, trust, and a seamless customer experience.”
The DraftKings CEO points out that starting in the third quarter, the operator will break out its sports revenue, which will include sportsbook and Predictions. That may give analysts and investors a cleaner view of the sizable earnings before interest, taxes, depreciation, and amortization (EBITDA) opportunity set DraftKings sees.
“The opportunity ahead in Sports is massive. At Investor Day, we laid out a path to a $55 billion to $80 billion gross revenue opportunity by 2030, along with at least a 30% long-term Adjusted EBITDA Margin,” observes Robins.
“Predictions is an important part of this opportunity, broadening our reach, strengthening our Sports platform, and driving meaningful incremental Adjusted EBITDA over time,” he added.
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Rephrased by The Mystic Gambler