DraftKings Increases Investment in Prediction Markets Following Strong Q3 Results
During its third-quarter 2026 earnings call, DraftKings (DKNG) announced a significant increase in capital allocation toward its predictions business, raising the projected investment to between $650 million and $700 million for the year. This strategic move is driven by faster-than-expected customer payback cycles, with management noting that the 2026 cohort is expected to pay back in approximately 20 months, beating their two-year target. The company's core sportsbook and iGaming operations continue to provide robust free cash flow, allowing DraftKings to self-fund these new ventures without incurring additional debt. While the aggressive expansion into prediction markets may impact short-term profitability, management anticipates it will create a low-volatility revenue stream. Looking forward, the company projects fiscal year 2027 adjusted EBITDA to reach between $800 million and $1 billion.
Tickers: $DKNG
Topics: capital allocation earnings report EBITDA investment prediction markets revenue growth