DraftKings Inc.
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 7, 2025
DKNG$18.51-21.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001883685-25-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001883685-25-000038
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 113 current paragraphs.
61 unchanged; 40 reworded; 11 added; 12 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Sportsbook Handle increased by $1.0 billion, or 10.0%, to $11.4 billion in the three months ended September 30, 2025, from $10.4 billion in the three months ended September 30, 2024, reflecting strong customer acquisition and continued strength in existing user engagement. Sportsbook Handle increased by $3.6 billion, or 10.9%, to $36.8 billion in the nine months ended September 30, 2025, from $33.2 billion in the nine months ended September 30, 2024, primarily due to an increase in MUPs.
Current report
iGaming revenue increased$89.8 million, or 24.9%, to$451.3 million in the three months ended September 30, 2025, from $361.5 million in the three months ended September 30, 2024, and increased by $222.4 million, or 20.6%, to $1,304.4 million in the nine months ended September 30, 2025, from $1,082.0 million in the nine months ended September 30, 2024. The increase is primarily due to an increase in iGaming customers.
Current report
Other revenue increased$19.5 million, or 25.3%, to$96.6 million in the three months ended September 30, 2025, from $77.1 million in the three months ended September 30, 2024, primarily due to interest income on customer deposits. Other revenue increased $69.9 million, or 32.5%, to $285.0 million in the nine months ended September 30, 2025, from $215.1 million in the nine months ended September 30, 2024, primarily due to interest income on customer deposits and revenue from our digital lottery courier product offering.
Current report
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Current report
Revenue. Revenue increased by $48.5 million, or 4.4%, to $1,144.0 million in the three months ended September 30, 2025, from $1,095.5 million in the three months ended September 30, 2024. The increase was primarily attributable to our iGaming product offering, which increased$89.8 million, or 24.9%, due toincreased handle and improved promotional reinvestment, offset by our Sportsbook offering which decreased$60.8 million, or 9.3%, primarily due to customer-friendly sports outcomes.
Current report
Cost of revenue as a percentage of revenue increased by 0.8 percentage pointsto 68.5% in thethree months ended September 30, 2025, as compared to 67.8% in thethree months ended September 30, 2024, primarily attributable to higher gaming tax rates in certain states.
Current report
General and Administrative. General and administrative expense decreased by $51.3 million, or 24.7%, to $156.8 million in the three months ended September 30, 2025, from $208.1 million in the three months ended September 30, 2024. The decrease was primarily driven by higher expenses recognized in the prior year, including $27.8 million related to the discontinuance of our Reignmakers product offering, lower stock-based compensation expense of $10.8 million, and reduced non-ordinary course litigation, settlement, and related costs of $20.4 million.
Current report
Interest Income (Expense), net. We recorded net interest expense of $19.6 million in the three months ended September 30, 2025, compared to $8.3 million of net interest income in the three months ended September 30, 2024. This fluctuation was due to the inclusion of interest income on customer deposits in revenue rather than in interest income, as well as increased interest expense from the Term B Loan, which was entered into in the first quarter of 2025.
Current report
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Current report
n.m. = not meaningful
Current report
General and Administrative. General and administrative expense decreased $60.6 million, or 11.1%, to $486.9 million in the nine months ended September 30, 2025, from $547.5 million in the nine months ended September 30, 2024. The decrease was primarily driven by the non-recurrence of higher expenses recognized in the prior year, including $27.8 million related to the discontinuance of our Reignmakers product offering, a $40.6 million reduction in non-ordinary course litigation, settlement, and related costs, and a $17.5 million reduction in transaction-related costs.
Removed paragraphs (12)
Previous report
Revenue increased by $408.1 million and $641.9 million in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 as a result of continued healthy customer engagement, efficient acquisition of new customers, the expansion of the Company’s Sportsbook product offering into new jurisdictions, higher structural Sportsbook hold percentage, improved promotional reinvestment for Sportsbook, and the impact of our acquisition of Jackpocket Inc. (“Jackpocket”), which was completed on May 22, 2024 (the “Jackpocket Transaction”).
Previous report
Sportsbook Handle increased by $681.8 million, or 6.3%, to $11.5 billion in the three months ended June 30, 2025, from $10.8 billion in the three months ended June 30, 2024, and increased by $2.6 billion, or 11.2% to $25.4 billion in the six months ended June 30, 2025, from $22.8 billion in the six months ended June 30, 2024. The increase isprimarily due to MUPs increasing in 2025 as compared to 2024. The increase in MUPs was due to strong player retention and acquisition across our Sportsbook product offering.
Previous report
iGaming revenue increased$79.1 million, or 22.6%, to$429.7 million in the three months ended June 30, 2025, from $350.6 million in the three months ended June 30, 2024, and increased by $132.6 million, or 18.4%, to $853.1 million in the six months ended June 30, 2025, from $720.5 million in the six months ended June 30, 2024. The increase is primarilydue to an increase in MUPs for the product offering.
Previous report
Other revenue increased$18.0 million, or 26.8%, to$85.0 million in the three months ended June 30, 2025, from $67.0 million in the three months ended June 30, 2024, and increased $50.4 million, or 36.5%, to $188.4 million in the six months ended June 30, 2025, from $137.9 million in the six months ended June 30, 2024. The increase is primarily due to the inclusion of revenue from Jackpocket. We consummated the Jackpocket Transaction on May 22, 2024.
Previous report
Revenue. Revenue increased by $408.1 million, or 36.9%, to $1,512.5 million in the three months ended June 30, 2025, from $1,104.4 million in the three months ended June 30, 2024. The increase was primarily attributable to our Sportsbook and iGaming product offerings, which increased$390.1 million, or 37.6%, to$1,427.5 million in the three months ended June 30, 2025, from$1,037.4 million in the three months ended June 30, 2024, due to MUPs and ARPMUPs increasing by 6.5%, and 29.1%, respectively, as compared to the three months ended June 30, 2024. The increase in MUPs was due tostrong player retention and acquisition across our Sportsbook and iGaming product offerings and the Jackpocket Transaction. The increase in ARPMUP was primarily due to higher structural Sportsbook hold percentage, sportsbook-friendly outcomes, and improved promotional reinvestment.
Previous report
General and Administrative. General and administrative expense was consistent, increasing by $0.6 million, or 0.4%, to $165.7 million in the three months ended June 30, 2025, from $165.1 million in the three months ended June 30, 2024.
Previous report
Interest Expense. We recorded interest expense of $11.6 million in the three months ended June 30, 2025, compared to $0.7 million in the three months ended June 30, 2024, primarily due to interest incurred on the Term B Facility.
Previous report
Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024
Previous report
Cost of revenue as a percentage of revenue decreased by 2.2 percentage pointsto 58.1% in thesix months ended June 30, 2025, as compared to 60.3% in thesix months ended June 30, 2024, reflecting, in part, structural improvement in our Sportsbook hold rate, an improved Sportsbook Net Revenue Margin, and improved promotional reinvestment for our Sportsbook product offering, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our DFS product offering.
Previous report
General and Administrative. General and administrative expense decreased $9.2 million, or 2.7%, to $330.1 million in the six months ended June 30, 2025, from $339.3 million in the six months ended June 30, 2024. The decrease was primarily due to an $11.0 million reduction in professional services expenses, largely attributable to transaction costs incurred during the three and six months ended June 30, 2024, which were not incurred during the corresponding periods in 2025.
Previous report
Interest Income. We recorded interest income of $21.8 million in the six months ended June 30, 2025, compared to $29.3 million in the six months ended June 30, 2024, due to fluctuations in cash balances and interest rates during the respective periods.
Previous report
Interest Expense. We recorded interest expense of $16.7 million in the six months ended June 30, 2025, compared to $1.3 million in the six months ended June 30, 2024, primarily due to interest incurred on the Term B Facility.
Reworded paragraphs (40)
Previous wording
The charts below present our average MUPs for the three and six months ended June 30, 2024 and 2025:
Current wording
The charts below present our average MUPs for the three and nine months ended September 30, 2024 and 2025:
Previous wording
Average Revenue per MUP (“ARPMUP”). We define and calculate ARPMUP as the average monthly revenue, excluding revenue from gaming software services, for a reporting period, divided by the average number of MUPs for the same period. ARPMUP is a key indicator of our ability to drive usage and monetization of our product offerings. The charts below present our ARPMUP for the three and six months ended June 30, 2024 and 2025:
Current wording
Average Revenue per MUP (“ARPMUP”). We define and calculate ARPMUP as the average monthly revenue, excluding revenue from gaming software services, for a reporting period, divided by the average number of MUPs for the same period. ARPMUP is a key indicator of our ability to drive usage and monetization of our product offerings. The charts below present our ARPMUP for the three and nine months ended September 30, 2024 and 2025:
Previous wording
MUPs increased by 0.2 million or 6.5% and 0.5 million or 15.1% in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, primarily reflecting strong unique payer retention and acquisition across our Sportsbook and iGaming product offerings and the impact of the Jackpocket Transaction. Excluding the impact of the Jackpocket Transaction, MUPs increased by 0.1 million or 4.7% and 0.3 million or 8.0% in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.
Current wording
MUPs increased 1.5% in the three months ended September 30, 2025 compared to the three months ended September 30, 2024. MUPs increased 0.4 million or 11.8% in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily reflecting strong unique payer retention and acquisition across our Sportsbook and iGaming product offer ings, and the impact of the Jackpocket Transaction. Excluding the impact of the Jackpocket Transaction, MUPs increased by 0.2 million or 7.4% in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Previous wording
ARPMUP increased by $34 or 29.1% and $12 or 10.4% in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, primarily due to structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook. Excluding the impact of the Jackpocket Transaction, ARPMUP increased by $39 or 30.4% and $21 or 17.7% in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.
Current wording
ARPMUP increased by $3 or 3.0% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to increased revenue in iGaming as well as structural improvement in our Sportsbook hold percentage, partially offsetby customer-friendly sports outcomes. ARPMUP increased$9 or 8.1% for thenine months ended September 30, 2025 compared to the nine months ended September 30, 2024, due to increased handle and improvement in our Sportsbook hold percentage. Excluding the impact of the Jackpocket Transaction, ARPMUP increased by $14 or 11.8% in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Previous wording
The chart below presents our Sportsbook Handle, Sportsbook Net Revenue Margin, and revenue disaggregation for the three and six months ended June 30, 2025 and 2024:
Current wording
The chart below presents our Sportsbook Handle, Sportsbook Net Revenue Margin, and revenue disaggregation for the three and nine months ended September 30, 2025 and 2024:
Previous wording
Sportsbook Net Revenue Margin increased by 2.3 percentage points, to 8.7% in the three months ended June 30, 2025, from 6.4% in the three months ended June 30, 2024, primarily driven by higher structural Sportsbook hold percentage, sportsbook-friendly outcomes, and improved promotional reinvestment. Sportsbook Net Revenue Margin increased by 1.2 percentage points, to 7.4% in the six months ended June 30, 2025, from 6.2% in the six months ended June 30, 2024 primarily driven by higher structural hold percentage and improved promotional reinvestment, partially offset by customer-friendly sports outcomes.
Current wording
Sportsbook Net Revenue Margin decreased by 1.1 percentage points, to 5.2% in the three months ended September 30, 2025, from 6.3% in the three months ended September 30, 2024, primarily driven by customer-friendly sports outcomes. Sportsbook Net Revenue Margin increased by 0.4 percentage points, to 6.7% in the nine months ended September 30, 2025, from 6.3% in the nine months ended September 30, 2024, primarily driven by higher structural hold percentage and improved promotional reinvestment, partially offset by customer-friendly sports outcomes in the first and third quarters.
Previous wording
Earnings (Loss) Per Share are useful in evaluating our operating performance, similar to measures reported by our publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share are not intended to be substitutes for any U.S. GAAP financial measure. As calculated, they may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
Current wording
This Report includes Adjusted EBITDA and Adjusted Earnings (Loss) Per Share, which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe Adjusted EBITDA and Adjusted Earnings (Loss) Per Share are useful in evaluating our operating performance, similar to measures reported by our publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share are not intended to be substitutes for any U.S. GAAP financial measure. As calculated, they may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
Previous wording
We define and calculate Adjusted Earnings (Loss) Per Share as diluted earnings (loss) per share attributable to common stockholders before the impact of amortization of acquired intangible assets; stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; other non-recurring and non-operating costs or income; and the tax impact of adjusting items, as described in the reconciliation below.
Current wording
We define and calculate Adjusted Earnings (Loss) Per Share as basic earnings (loss) per share attributable to common stockholders before the impact of amortization of acquired intangible assets; stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; other non-recurring and non-operating costs or income; and the tax impact of adjusting items, as described in the reconciliation below.
Previous wording
(1)The amounts include the amortization of acquired intangible assets of $36.4 million and $36.4 million for the three months ended June 30, 2025 and 2024, respectively, and $79.1 million and $65.7 million for the six months ended June 30, 2025 and 2024, respectively.
Current wording
(1)The amounts include the amortization of acquired intangible assets of $33.9 million and $55.5 million for the three months ended September 30, 2025 and 2024, respectively, and $113.0 million and $121.2 million for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
(6)Primarily includes the change in fair value of certain financial assets, as well as our equity method share of investee’s losses and other costs relating to non-recurring and non-operating items.
Current wording
(6)Primarily includes the change in fair value of certain assets and liabilities, including contingent consideration, as well as our equity method share of investee’s gains and losses and other costs relating to non-recurring and non-operating items. For the three and nine months ended September 30, 2024, this amount also includes $27.8 million in expense related to the discontinuance of our Reignmakers product offering, $7.5 million in expenses related to the termination of a market access agreement, and a $5.8 million loss on the sale of Vegas Sports Information Network, LLC. For the nine month period ended September 30, 2024, these costs are offset by $20.9 million related to gaming tax credits as a result of audits and appeals related to prior periods.
Previous wording
The table below presents the Company’s Adjusted Earnings (Loss) Per Share reconciled to its diluted earnings (loss) per share attributable to common stockholders, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP, for the periods indicated:
Current wording
The table below presents the Company’s Adjusted Earnings (Loss) Per Share reconciled to its basic earnings (loss) per share attributable to common stockholders, which is the most directly comparable financial measure calculated in accordance with U.S. GAAP, for the periods indicated:
Previous wording
*Weighted average diluted number of shares used to calculate Adjusted Earnings (Loss) Per Share for the three months ended June 30, 2025 and 2024 was 529.5 million and 518.8 million, respectively, and 529.6 million and 476.8 million for the six months ended June 30, 2025 and 2024, respectively; totals may not add due to rounding.
Current wording
*Weighted average number of shares used to calculate Adjusted Earnings (Loss) Per Share for the three months ended September 30, 2025 and 2024 was 496.6 million and 486.2 million, respectively, and 495.5 million and 480.0 million for the nine months ended September 30, 2025 and 2024, respectively; totals may not add due to rounding.
Previous wording
(1)The amounts include the amortization of acquired intangible assets of $36.4 million and $36.4 million for the three months ended June 30, 2025 and 2024, respectively, and $79.1 million and $65.7 million for the six months ended June 30, 2025 and 2024, respectively.
Current wording
(1)The amounts include the amortization of acquired intangible assets of $33.9 million and $55.5 million for the three months ended September 30, 2025 and 2024, respectively, and $113.0 million and $121.2 million for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
(7)Beginning in the first quarter of the 2025, the Company began applying an estimated non-GAAP effective tax rate of 25%. The non-GAAP effective tax rate reflects the non-GAAP tax provision commensurate with the Company’s level of non-GAAP profitability, which was determined after adjusting for the non-GAAP adjustments presented above and excluding the impact of changes in the valuation allowance.
Current wording
(7)Beginning in the first quarter of 2025, the Company began applying an estimated non-GAAP effective tax rate, which is 23% as of the third quarter of 2025. The non-GAAP effective tax rate reflects the non-GAAP tax provision commensurate with the Company’s level of non-GAAP profitability, which was determined after adjusting for the non-GAAP adjustments presented above and excluding the impact of changes in the valuation allowance.
Previous wording
Cost of Revenue. Cost of revenue increased$191.1 million, or 28.8%, to$854.6 million in the three months ended June 30, 2025, from$663.4 million in thethree months ended June 30, 2024. The increase was primarily due to our revenue growth and an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $142.1 million and $20.7 million, respectively. The remaining increase was primarily attributable to an increase of $15.5 million in our variable platform costs resulting from additional customer activity and an increase in amortization of intangible assets of $4.5 million.
Current wording
Cost of Revenue. Cost of revenue increased$41.6 million, or 5.6%, to$784.1 million in the three months ended September 30, 2025, from$742.4 million in thethree months ended September 30, 2024. The increase was primarily due to our revenue growth and a resulting increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $58.4 million and $5.1 million, respectively. These increases were partially offset by a decrease in amortization of intangible assets of $24.1 million.
Previous wording
Sales and Marketing. Sales and marketing expense increased $17.5 million, or 8.1%, to $233.2 million in the three months ended June 30, 2025, from $215.7 million in the three months ended June 30, 2024. The increase was primarily attributable to higher external marketing costs.
Current wording
Sales and Marketing. Sales and marketing expense increased $20.4 million, or 6.0%, to $360.4 million in the three months ended September 30, 2025, from $339.9 million in the three months ended September 30, 2024, primarily attributable to higher external marketing costs.
Previous wording
Product and Technology. Product and technology expense increased $15.8 million, or 17.0%, to $108.4 million in the three months ended June 30, 2025, from $92.7 million in the three months ended June 30, 2024 due to increased headcount in our product and engineering departments.
Current wording
Product and Technology. Product and technology expense increased $11.1 million, or 10.7%, to $114.7 million in the three months ended September 30, 2025, from $103.6 million in the three months ended September 30, 2024, due to increased headcount in our product and engineering departments.
Previous wording
Gain (Loss) on Remeasurement of Warrant Liabilities. We recorded a loss of $3.4 million on remeasurement of warrant liabilities in the six months ended June 30, 2025, compared to a loss of $8.3 million in the six months ended June 30, 2024, due to changes in the underlying share price of our Class A common stock.
Current wording
Gain (Loss) on Remeasurement of Warrant Liabilities. We recorded a gain of $4.2 million on remeasurement of warrant liabilities in the three months ended September 30, 2025, compared to a nominal gain in the three months ended September 30, 2024, due to changes in the underlying share price of our Class A common stock.
Previous wording
Other Gain (Loss), net. We recorded a $24.5 million gain in the three months ended June 30, 2025, as compared to a loss of $0.4 million in the three months ended June 30, 2024. The gain was primarily attributable to the revaluation of contingent consideration for the three months ended June 30, 2025.
Current wording
Other Gain (Loss), net. We recorded a net gain of $16.7 million in the three months ended September 30, 2025, as compared to a net loss of $4.6 million in the three months ended September 30, 2024. The gain was primarily attributable to the revaluation of contingent consideration for the three months ended September 30, 2025.
Previous wording
Income Tax Provision (Benefit). We recorded income tax expense of$11.8 million in thethree months ended June 30, 2025, as compared to an income tax benefit of$73.6 million in thethree months ended June 30, 2024. Although we have a cumulative three year loss position, based on our recent financial performance and our future projections, we could record a reversal of all, or a portion of the valuation allowance associated with U.S. deferred tax assets in future periods. However, any such change is subject to actual performance and other considerations that may present positive or negative evidence at the time of the assessment.
Current wording
Income Tax Provision (Benefit). We recorded an income tax benefit of$12.1 million in thethree months ended September 30, 2025, as compared to an income tax benefit of$1.3 million in thethree months ended September 30, 2024. Although we have a cumulative three year loss position, based on our recent financial performance and our future projections, we could record a reversal of all, or a portion of the valuation allowance associated with U.S. deferred tax assets in future periods. However, any such change is subject to actual performance and other considerations that may present positive or negative evidence at the time of the assessment.
Previous wording
Net Income (Loss). Net income increased by $94.1 million to a net income of $157.9 million in the three months ended June 30, 2025, as compared to a net income of $63.8 million in the three months ended June 30, 2024, for the reasons discussed above.
Current wording
Net Income (Loss). Net loss decreased by $36.9 million to a net loss of $256.8 million in the three months ended September 30, 2025, as compared to a net loss of $293.7 million in the three months ended September 30, 2024, for the reasons discussed above.
Previous wording
Revenue. Revenue increased by $641.9 million, or 28.2%, to $2,921.3 million in the six months ended June 30, 2025, from $2,279.4 million in the six months ended June 30, 2024. The increase was primarily attributable to our Sportsbook and iGaming product offerings, which increased$591.5 million, or 27.6%, to$2,733.0 million in the six months ended June 30, 2025, from$2,141.5 million in the six months ended June 30, 2024, due to MUPs and ARPMUPs increasing by 6.5%, and 10.4%, respectively, as compared to the six months ended June 30, 2024. The increase in MUPs was due tostrong player retention and acquisition across our Sportsbook and iGaming product offerings, the expansion of our Sportsbook product offering into new jurisdictions and the Jackpocket Transaction. The increase in ARPMUP was primarily due to higher structural Sportsbook hold percentage and improved promotional reinvestment, partially offset by customer-friendly sports outcomes in the first quarter.
Current wording
Revenue. Revenue increased by $690.4 million, or 20.5%, to $4,065.3 million in the nine months ended September 30, 2025, from $3,374.9 million in the nine months ended September 30, 2024. The increase was primarily attributable to our Sportsbook and iGaming product offerings, which increased$620.5 million, or 19.6%, to$3,780.4 million in the nine months ended September 30, 2025, from$3,159.9 million in the nine months ended September 30, 2024, due to MUPs and ARPMUPs increasing by 11.8% and 8.1%, respectively, as compared to the nine months ended September 30, 2024. The increase in MUPs was primarily due tostrong player retention and acquisition across our Sportsbook and iGaming product offerings. The increase in ARPMUP was primarily due to higher Sportsbook hold percentage and improved promotional reinvestment, partially offset by customer-friendly sports outcomes in the first and third quarters of 2025.
Previous wording
Cost of Revenue. Cost of revenue increased$324.9 million, or 23.7%, to$1,698.4 millionin thesix months ended June 30, 2025, from$1,373.5 million in thesix months ended June 30, 2024. The increase was due primarily to revenue growth and an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $223.8 million and $49.8 million, respectively. The remaining increase was primarily attributable to an increase of $20.2 million in our variable platform costs resulting from additional customer activity and an increase in amortization of intangible assets of $22.8 million.
Current wording
Cost of Revenue. Cost of revenue increased$366.5 million, or 17.3%, to$2,482.4 millionin thenine months ended September 30, 2025, from$2,115.9 million in thenine months ended September 30, 2024. The increase was due to revenue growth and a resulting increase in our variable expenses, primarily gaming taxes and payment processing fees, which increased $282.3 million and $54.9 million, respectively.
Previous wording
Cost of revenue as a percentage of revenue decreased by 3.6 percentage pointsto 56.5% in thethree months ended June 30, 2025, as compared to 60.1% in thethree months ended June 30, 2024, reflecting, in part, structural improvement in our Sportsbook hold rate, an improved Sportsbook Net Revenue Margin, and improved promotional reinvestment for our Sportsbook product offering, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our DFS product offering.
Current wording
Cost of revenue as a percentage of revenue decreased by 1.6 percentage pointsto 61.1% in thenine months ended September 30, 2025, as compared to 62.7% in thenine months ended September 30, 2024, reflecting, in part, structural improvement in our Sportsbook hold rate, an improved Sportsbook Net Revenue Margin, and improved promotional reinvestment for our Sportsbook product offering, partially offset by higher gaming tax rate in certain states, including Illinois.
Previous wording
Sales and Marketing. Sales and marketing expense increased $20.5 million, or 3.7%, to $576.9 million in the six months ended June 30, 2025, from $556.4 million in the six months ended June 30, 2024. The increase was primarily attributable to higher external marketing costs.
Current wording
Sales and Marketing. Sales and marketing expense increased $40.9 million, or 4.6%, to $937.2 million in the nine months ended September 30, 2025, from $896.3 million in the nine months ended September 30, 2024. The increase was primarily attributable to higher external marketing costs.
Previous wording
Product and Technology. Product and technology expense increased $30.2 million, or 16.6%, to $211.7 million in the six months ended June 30, 2025, from $181.5 million in the six months ended June 30, 2024 due to increased headcount in our product and engineering departments.
Current wording
Product and Technology. Product and technology expense increased $41.3 million, or 14.5%, to $326.4 million in the nine months ended September 30, 2025, from $285.1 million in the nine months ended September 30, 2024, due to increased headcount in our product and engineering departments.
Previous wording
Interest Income. We recorded interest income of $12.3 million in the three months ended June 30, 2025, compared to $14.2 million in the three months ended June 30, 2024, due to fluctuations in cash balances and interest rates during the respective periods.
Current wording
Interest Income (Expense), net. We recorded net interest expense of $14.5 million in the nine months ended September 30, 2025, compared to $36.3 million of net interest income in the nine months ended September 30, 2024, due to fluctuations in cash balances and interest rates during the respective periods, the inclusion of interest income on customer deposits in revenue rather than in interest income, and increased interest expense from the Term B Loan, which was entered into in the first quarter of 2025.
Previous wording
Gain (Loss) on Remeasurement of Warrant Liabilities. We recorded a loss of $5.9 million on remeasurement of warrant liabilities in the three months ended June 30, 2025, compared to a gain of $9.8 million in the three months ended June 30, 2024, due to changes in the underlying share price of our Class A common stock.
Current wording
Gain (Loss) on Remeasurement of Warrant Liabilities. We recorded a gain of $0.9 million on remeasurement of warrant liabilities in the nine months ended September 30, 2025, compared to a loss of $8.3 million in the nine months ended September 30, 2024, due to changes in the underlying share price of our Class A common stock.
Previous wording
Other Gain (Loss), net. We recorded a $24.5 million gain in the six months ended June 30, 2025, as compared to a loss of $1.2 million in the six months ended June 30, 2024. The gain was primarily attributable to the revaluation of contingent consideration.
Current wording
Other Gain (Loss), net. We recorded a $41.2 million gain in the nine months ended September 30, 2025, as compared to a loss of $5.8 million in the nine months ended September 30, 2024. The gain was primarily attributable to the revaluation of contingent consideration.
Previous wording
Income Tax Provision (Benefit). We recorded income tax expense of$6.2 million in thesix months ended June 30, 2025, as compared to an income tax benefit of$73.9 million in thesix months ended June 30, 2024. Although we have a cumulative three year loss position, based on our recent financial performance and our future projections, we could record a reversal of all, or a portion of the valuation allowance associated with U.S. deferred tax assets in future periods. However, any such change is subject to actual performance and other considerations that may present positive or negative evidence at the time of the assessment.
Current wording
Income Tax Provision (Benefit). We recorded an income tax benefit of$5.9 million in thenine months ended September 30, 2025, as compared to an income tax benefit of$75.2 million in thenine months ended September 30, 2024. Although we have a cumulative three year loss position, based on our recent financial performance and our future projections, we could record a reversal of all, or a portion of the valuation allowance associated with U.S. deferred tax assets in future periods. However, any such change is subject to actual performance and other considerations that may present positive or negative evidence at the time of the assessment.
Previous wording
Net Income (Loss). Net income increased by $202.8 million to a net income of $124.1 million in the six months ended June 30, 2025, as compared to a net loss of $78.7 million in the six months ended June 30, 2024, for the reasons discussed above.
Current wording
Net Income (Loss). Net loss decreased by $239.7 million to a net loss of $132.7 million in the nine months ended September 30, 2025, as compared to a net loss of $372.4 million in the nine months ended September 30, 2024, for the reasons discussed above.
Previous wording
We had $1,262.0 million in cash and cash equivalents as of June 30, 2025 (excluding restricted cash and cash reserved for users, which we segregate on behalf of our paid users for all jurisdictions and product offerings). We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months. We will continue to evaluate our long-term operating performance and cash needs and believe we are well positioned to continue to fund the operations of our business long-term.
Current wording
We had $1,228.3 million in cash and cash equivalents as of September 30, 2025 (excluding restricted cash and cash reserved for users, which we segregate on behalf of our paid users for all jurisdictions and product offerings). We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months. We will continue to evaluate our long-term operating performance and cash needs and believe we are well positioned to continue to fund the operations of our business long-term.
Previous wording
Debt. In March 2021, we issued zero-coupon convertible senior notes in an aggregate principal amount of $1,265.0 million (the “Convertible Notes”). The Convertible Notes mature on March 15, 2028, subject to earlier conversion, redemption or repurchase. In connection with the pricing of the Convertible Notes and the exercise of the option to purchase additional Convertible Notes, we entered into privately negotiated capped call transactions (the “Capped Call Transactions”). The Capped Call Transactions are expected generally to reduce potential dilution to DraftKings Inc.’s Class A common stock upon any conversion of the Convertible Notes. The net cost of $124.0 million incurred to enter into the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company’s condensed consolidated balance sheets. As of June 30, 2025, the Convertible Notes, net of issuance costs, balance was $1,257.8 million.
Current wording
Debt. In March 2021, we issued zero-coupon convertible senior notes in an aggregate principal amount of $1,265.0 million (the “Convertible Notes”). The Convertible Notes mature on March 15, 2028, subject to earlier conversion, redemption or repurchase. In connection with the pricing of the Convertible Notes and the exercise of the option to purchase additional Convertible Notes, we entered into privately negotiated capped call transactions (the “Capped Call Transactions”). The Capped
Previous wording
Term Loan. In March 2025, we and certain of our subsidiaries entered into a first amendment to the Credit Agreement, which provides for a new class of incremental term loans under the Credit Agreement in an aggregate principal amount of $600.0 million (the “Term B Facility” and, such term loans, the “Term B Loan”). The Term B Facility requires principal payments in the amount of 1.00% per annum of the original aggregate principal amount of the Term B Loan payable in quarterly installments. Term B Loan bear interest at the Company’s election at either (i) in the case of Term SOFR Loans, Term SOFR plus an applicable margin of 1.75% per annum, or (ii) in the case of ABR Term Loans, ABR plus an applicable margin of 0.75% per annum (with each of the capitalized terms used in clauses (i) and (ii) as defined in the Credit Agreement). As of June 30, 2025, there was $600.0 million in aggregate principal amount of Term B Loan outstanding.
Current wording
Term Loan. In March 2025, we and certain of our subsidiaries entered into a first amendment to the Credit Agreement, which provides for a new class of incremental term loans under the Credit Agreement in an aggregate principal amount of $600.0 million (the “Term B Facility” and, such term loans, the “Term B Loan”). The Term B Facility requires principal payments in the amount of 1.00% per annum of the original aggregate principal amount of the Term B Loan payable in quarterly installments. The Term B Loan bears interest at the Company’s election at either (i) in the case of Term SOFR Loans, Term SOFR plus an applicable margin of 1.75% per annum, or (ii) in the case of ABR Term Loans, ABR plus an applicable margin of 0.75% per annum (with each of the capitalized terms used in clauses (i) and (ii) as defined in the Credit Agreement). As of September 30, 2025, there was $597.0 million in aggregate principal amount of Term B Loan outstanding.
Previous wording
Other Purchase Obligations. We have certain non-cancelable contracts with vendors, licensors and others requiring us to make future cash payments. As of June 30, 2025, these purchase obligations were $794.9 million, with $219.6 million payable in the remainder of 2025.
Current wording
Other Purchase Obligations. We have certain non-cancelable contracts with vendors, licensors and others requiring us to make future cash payments. As of September 30, 2025, these purchase obligations were $2.1 billion, with $0.2 billion payable in the remainder of 2025. This includes $1.3 billion of expected contractual obligations over the next five years as part of multi-year content integration agreements signed with three media distribution counterparties in the three month period ended September 30, 2025.
Previous wording
Stock Repurchase Program. On July 30, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $1.0 billion of our Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws. We repurchased 2.9 million shares for $100.5 million during the three months ended June 30, 2025 and 6.5 million shares and $242.7 million for the six months ended June 30, 2025. As of June 30, 2025, we have purchased 7.7 million shares of Class A common stock for $290.8 million since the inception of the stock repurchase program.
Current wording
Stock Repurchase Program. On July 30, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $1.0 billion of our Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws. We repurchased 1.6 million shares for $71.2 million during the three months ended September 30, 2025 and 8.2 million shares and $314.0 million for the nine months ended September 30, 2025. As of September 30, 2025, we have purchased 9.3 million shares of Class A common stock for $362.0 million since the inception of the stock repurchase program.
Previous wording
Operating Activities. Net cash provided by operating activities in the six months ended June 30, 2025 was $54.9 million, compared to $41.0 million used in operating activities in the six months ended June 30, 2024, primarily from an improvement in net income, net of non-cash items, of$262.5 million for reasons discussed in Results of Operations above, offset by $166.6 million of cash used from changes in operating assets and liabilities, primarily related to a larger reduction in liabilities to users, due to timing of player activity, and a larger reduction in accounts payable due to timing of vendor payments.
Current wording
Operating Activities. Net cash provided by operating activities in the nine months ended September 30, 2025 was $342.4 million, compared to $92.6 million provided by operating activities in the nine months ended September 30, 2024, primarily from an improvement in net income (loss), net of non-cash items, of$223.9 million for reasons discussed in Results of Operations above, in addition to $25.9 million of cash provided from changes in operating assets and liabilities, primarily related to timing of player activity, impacting receivables reserved for users and liabilities to users, as well as timing of vendor payments.
Previous wording
Investing Activities. Net cash used in investing activities during the six months ended June 30, 2025 decreased by $382.3 million to $74.3 million, compared to $456.5 million in the six months ended June 30, 2024, primarily due to a decrease of $392.0 million in cash paid for acquisitions, net of cash required, and a decrease of $10.5 million in cash paid for gaming licenses, offset by an increase of $16.3 million in cash paid for internally developed software costs.
Current wording
Investing Activities. Net cash used in investing activities during the nine months ended September 30, 2025 decreased by $372.1 million to $116.1 million, compared to $488.2 million in the nine months ended September 30, 2024, primarily due to a decrease of $392.5 million in cash paid for acquisitions, net of cash acquired, and a decrease of $10.5 million in cash paid for gaming market access and licenses, offset by an increase of $22.4 million in cash paid for internally developed software costs, an increase of $3.2 million in cash paid for purchases of property plant and equipment, and an increase of $5.3 million in cash paid for other investing activities.
Previous wording
Financing Activities. Net cash provided by financing activities during the six months ended June 30, 2025 increased by $305.6 million to $253.1 million, compared to $52.5 million used in the six months ended June 30, 2024, primarily driven by$588.1 million of cash received from borrowing under the Term B Facility, partially offset by$242.7 million in treasury stock purchases under the Stock Repurchase Program, and an increase of$43.9 million of RSU withhol ding activity relating to tax obligations upon vesting of restricted stock units.
Current wording
Financing Activities. Net cash provided by financing activities during the nine months ended September 30, 2025 increased by $223.1 million to $151.7 million, compared to $71.4 million used in the nine months ended September 30, 2024, primarily driven by$588.1 million of cash received from borrowing under the Term B Facility, partially offset by$314.0 million in treasury stock purchases under the Stock Repurchase Program, and an increase of$55.3 million in cash paid for purchases of treasury stock for RSU withhol ding.
Previous wording
During the six months ended June 30, 2025, there were no changes to the critical accounting estimates discussed in the 2024 Annual Report.
Current wording
During the nine months ended September 30, 2025, there were no changes to the critical accounting estimates discussed in the 2024 Annual Report.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Call Transactions are expected generally to reduce potential dilution to DraftKings Inc.’s Class A common stock upon any conversion of the Convertible Notes. The net cost of $124.0 million incurred to enter into the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company’s condensed consolidated balance sheets. As of September 30, 2025, the Convertible Notes, net of issuance costs, balance was $1,258.4 million.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
This Report includes Adjusted EBITDA and Adjusted Earnings (Loss) Per Share, which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe Adjusted EBITDA and Adjusted