DraftKings Stock Plunges 23.6% After Cutting 2026 Revenue Outlook

DraftKings shares fell 23.6% to $17.90 on Friday, a day after the company cut its full-year revenue outlook and laid out a heavy bet on prediction markets.

The stock's lowest close in six months extends a brutal run: DraftKings Inc. (Nasdaq: DKNG) is now down more than 49% year to date. The sell-off followed Thursday's third-quarter earnings report, in which the sports-betting operator said it expects 2026 revenue of $6.35 billion to $6.55 billion — down from its previous guidance of $6.5 billion to $6.9 billion.

The company pinned the shortfall on a deliberate strategy shift rather than a weakening core business.

Why did DraftKings cut its guidance?

DraftKings said the lower outlook reflects increased investment in its Predictions offering, with roughly $650 million to $700 million committed to the sector. That spending will not show up in this year's revenue line, because "new customer promotions will offset the lion's share of gross revenue generated," the company said in its report.

The investment is a defensive and offensive move at once. Prediction markets such as Kalshi and Polymarket continue to gain ground in the U.S., letting users wager on real-life events — from political elections to a TV show's finale — a category that overlaps with traditional sports betting but extends well beyond it.

DraftKings is effectively paying now to build a foothold before rivals lock up the market.

What does the 2027 forecast say?

Alongside the guidance cut, DraftKings issued its first 2027 outlook, and the numbers frame the payoff it expects from the prediction bet:

• Revenue of $7.35 billion to $7.75 billion
• Adjusted EBITDA of $800 million to $1 billion
• Revenue of roughly $650 million to $750 million from the Predictions investments

The 2027 revenue forecast sits below Wall Street's expectations. Analysts project $7.6 billion in revenue for that year, according to consensus estimates cited by the Wall Street Journal — a figure above the midpoint of DraftKings' own range.

That gap suggests investors have two concerns at once: the company is spending heavily today, and even its medium-term targets may underwhelm the Street.

What did CEO Jason Robins say?

Jason Robins, DraftKings' CEO and co-founder, cast the quarter as an inflection point. "The third quarter marked a pivotal moment for DraftKings, as the Predictions offering we have been building is now powering meaningful growth for our business," Robins said in the report.

He pointed to customer adoption as evidence the bet is working. "More than 1.6 million customers have engaged with Predictions year-to-date, and combined with the strength of our core, we believe we are set up for an exceptional 2027," Robins added.

The 1.6 million figure is the company's clearest proof point so far that the prediction business has traction beyond the promotional spend funding it.

What's next for the stock?

DraftKings reported third-quarter revenue growth of 16%, but the market's verdict centered on the guidance cut and the cost of the prediction push. Investors now must decide whether a roughly $700 million investment that suppresses 2026 results can deliver the $650 million to $750 million in 2027 revenue the company promises — and whether that return justifies a stock trading at half its January value.