DraftKings Inc.
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
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, 2026 · Filed Nov 6, 2026
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 2026-06-30; filed 2026-08-07.
0001883685-26-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001883685-26-000041
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 115 previous paragraphs and 115 current paragraphs.
54 unchanged; 49 reworded; 10 added; 11 removed; 1 previous and 2 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 (10)
Current report
ARPMUP increased by $3.1, or 2.9%, for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, and $3.8, or 3.2%, for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to a higher Sportsbook net revenue margin, partially offset by promotional investment associated with new customer acquisition on our prediction markets offering.
Current report
iGaming revenue increased$9.6 million, or 2.1%, to$460.9 million in the three months ended September 30, 2026, from $451.3 million in the three months ended September 30, 2025, and increased by $79.7 million, or 6.1%, to $1,384.2 million in the nine months ended September 30, 2026, from $1,304.4 million in the nine months ended September 30, 2025. The increases are primarily due to higher handle, partially offset by increased promotional reinvestment.
Current report
Other revenue decreased$12.1 million, or 12.5%, to$84.5 million in the three months ended September 30, 2026, from $96.6 million in the three months ended September 30, 2025, and decreased $20.8 million, or 7.3%, to $264.2 million in the nine months ended September 30, 2026, from $285.0 million in the nine months ended September 30, 2025, primarily due to lower interest income on player funds, as the prior-year period included a reclassification of interest income on customer deposits to revenue, and lower advertising sales revenue, partially offset by growth in our Lottery offering and the launch of DK Racing.
Current report
Adjusted Earnings (Loss) Per Share
Current report
Revenue. Revenue increased by $185.0 million, or 16.2%, to $1,329.1 million in the three months ended September 30, 2026, from $1,144.0 million in the three months ended September 30, 2025. The increase was primarily attributable to our Sports revenue, which increased $187.5 million, or 31.5%, due to higher Sports Consumer Volume and an increase in our Sports Net Revenue Margin of 0.4 percentage points, primarily due to a higher hold percentage and lower promotional reinvestment on our Sportsbook offering, partially offset by promotional investment associated with the launch of our prediction markets offering. Our iGaming offering also increased $9.6 million, or 2.1%, due to higher gross gaming revenue, partially offset by increased promotional reinvestment.
Current report
Cost of Revenue. Cost of revenue increased$115.9 million, or 14.8%, to$900.0 million in the three months ended September 30, 2026, from$784.1 million in thethree months ended September 30, 2025. The increase was primarily driven by higher variable costs associated with revenue growth, including an increase of gaming taxes of$64.4 million.
Current report
Cost of revenue as a percentage of revenue decreased by 0.8 percentage pointsto 67.7% in thethree months ended September 30, 2026, as compared to 68.5% in thethree months ended September 30, 2025, primarily attributable to a higher hold percentage and lower promotional reinvestment on our Sportsbook offering.
Current report
Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
Current report
Interest Income (Expense), net. We recorded net interest expense of $24.6 million in the nine months ended September 30, 2026, compared to $14.5 million of net interest expense in the nine months ended September 30, 2025. The increase was primarily due to a $7.7 million increase in interest expense related to the Term B-2 Loan, Term B-1 Loan and revolving credit facility, and a $2.3 million decrease in interest income.
Current report
Financing Activities. Net cash provided by financing activities during the nine months ended September 30, 2026 was $179.2 million compared to $151.7 million net cash provided by financing activities in the nine months ended September 30, 2025, primarily driven by$687.8 million of net proceeds from the Term B-2 Loan (compared to$588.1 million of Term B-1 Loan proceeds in the prior-year period), a$159.7 million decrease in treasury stock purchases under the Stock Repurchase Program and a$71.0 million decrease in treasury stock purchases for RSU withholding, partially offset by the $300.4 million utilized to repurchase $320.0 million principal amount of Convertible Notes.
Removed paragraphs (11)
Previous report
ARPMUP decreased by $19, or 12.6%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to customer-friendly sports outcomes and new customer promotions impacting revenue on our Sportsbook and Prediction Markets offerings. ARPMUP increased $4, or 3%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to a higher percentage of customers engaging with multiple offerings resulting in higher revenue per customer.
Previous report
iGaming revenue increased$32.3 million, or 7.5%, to$461.9 million in the three months ended June 30, 2026, from $429.7 million in the three months ended June 30, 2025, and increased by $70.1 million, or 8.2%, to $923.2 million in the six months ended June 30, 2026, from $853.1 million in the six months ended June 30, 2025. The increase is primarily due to improved promotional reinvestment and an increase in MUPs for the iGaming offering.
Previous report
Other revenue increased$4.4 million, or 5.2%, to$89.4 million in the three months ended June 30, 2026, from $85.0 million in the three months ended June 30, 2025, primarily due to the increased revenues from the new Keno offering within the Lottery offering. Other revenue decreased $8.7 million, or 4.6%, to $179.6 million in the six months ended June 30, 2026, from $188.4 million in the six months ended June 30, 2025, primarily due to a reduction in Fantasy entry fees and lower Lottery revenue following our exit from the Texas market.
Previous report
Adjusted Diluted Earnings (Loss) Per Share
Previous report
Revenue. Revenue decreased by $69.3 million, or 4.6%, to $1,443.2 million in the three months ended June 30, 2026, from $1,512.5 million in the three months ended June 30, 2025. The decrease was primarily attributable to our Sports revenue, which decreased $106.0 million, or 10.6%, due to a reduction in our Sports Net Revenue Margin of 1.9 percentage points primarily due to customer-friendly sports outcomes and higher promotions associated with new customers on our Sportsbook and Prediction Markets offerings. The decrease was partially offset by our iGaming offering, which increased $32.3 million, or 7.5%, due to improved promotional reinvestment.
Previous report
Cost of Revenue. Cost of revenue increased$37.2 million, or 4.4%, to$891.8 million in the three months ended June 30, 2026, from$854.6 million in thethree months ended June 30, 2025. The increase was primarily due to an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $17.7 million and $4.1 million, respectively. The remaining increase was primarily attributable to an increase in amortization of intangible assets of $14.5 million.
Previous report
Cost of revenue as a percentage of revenue increased by 5.3 percentage pointsto 61.8% in thethree months ended June 30, 2026, as compared to 56.5% in thethree months ended June 30, 2025, primarily attributable to an increase in gaming taxes due to tax rate increases in certain states.
Previous report
Interest Income (Expense), net. We recorded net interest expense of $7.4 million in the three months ended June 30, 2026, compared to $0.7 million of net interest income in the three months ended June 30, 2025. This fluctuation was primarily due to decreased interest income as a result of the inclusion of interest income on customer deposits in revenue in the three months ended June 30, 2026 rather than in interest income in the three months ended June 30, 2025.
Previous report
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Previous report
Financing Activities. Net cash used in financing activities during the six months ended June 30, 2026 was $186.6 million compared to $253.1 million net cash provided by financing activities in the six months ended June 30, 2025, primarily driven by a reduction of $588.1 million of cash received from borrowing under the Term B Facility, partially offset by a reduction of
Previous report
$88.5 million in treasury stock purchases under the Stock Repurchase Program, and a reduction of$58.4 million in cash paid for purchases of treasury stock for RSU withhol ding.
Reworded paragraphs (49)
Previous wording
•our ability to effectively compete in the global sports and gaming and emerging prediction markets industries;
Current wording
•our ability to effectively compete in the global sports and gaming and prediction markets industries;
Previous wording
We are a digital sports and gaming company. We provide users with online and retail sports betting (together, “Sportsbook”), online casino (“iGaming”), daily fantasy sports (“Fantasy”), digital lottery courier (“Lottery”), prediction markets (“Prediction Markets”), and other offerings.
Current wording
We are a digital sports and gaming company. We provide users with online and retail sports betting (together, “Sportsbook”), online casino (“iGaming”), daily fantasy sports (“Fantasy”), digital lottery courier (“Lottery”), prediction markets and other offerings.
Previous wording
(2)Adjusted Diluted Earnings (Loss) Per Share is a non-GAAP financial measure. See “—Non-GAAP Information” below for additional information about this measure and a reconciliation of this measure to the most directly comparable financial measure calculated in accordance with U.S. GAAP.
Current wording
(2)Adjusted Earnings (Loss) Per Share is a non-GAAP financial measure. See “—Non-GAAP Information” below for additional information about this measure and a reconciliation of this measure to the most directly comparable financial measure calculated in accordance with U.S. GAAP.
Previous wording
Revenue decreased by$69.3 million in the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to lower revenue from our Sportsbook and Prediction Markets offerings (together, “Sports”), driven by customer-friendly sports outcomes and increased promotional reinvestment associated with new customer acquisition on our Sports offering. Revenue increased by $168.0 million in thesix months ended June 30, 2026, compared to thesix months ended June 30, 2025, primarily due to the strong performance of our Sports and iGaming offerings as a result of continued healthy user engagement and efficient acquisition of new customers.
Current wording
Revenue increased by$185.0 million in the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to higher revenue from our Sportsbook and prediction markets offerings (together, “Sports”), driven by higher Sportsbook handle and higher Sportsbook net revenue margin, partially offset by promotional investment associated with the launch of our prediction markets offering. Revenue increased by $353.0 million in thenine months ended September 30, 2026, compared to thenine months ended September 30, 2025, primarily due to the strong performance of our Sports offerings, driven by higher Sportsbook handle and Sportsbook net revenue margin, partially offset by promotional investment associated with the launch of our prediction markets offering.
Previous wording
The charts below present our average MUPs for the three and six months ended June 30, 2025 and 2026:
Current wording
The charts below present our average MUPs for the three and nine months ended September 30, 2025 and 2026:
Previous wording
Average Revenue per MUP (“ARPMUP”). We define and calculate ARPMUP as the average monthly revenue 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 offerings. The charts below present our ARPMUP for the three and six months ended June 30, 2025 and 2026:
Current wording
Average Revenue per MUP (“ARPMUP”). We define and calculate ARPMUP as the average monthly revenue 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 offerings. The charts below present our ARPMUP for the three and nine months ended September 30, 2025 and 2026:
Previous wording
MUPs increased 0.3 million, or 9.1%, and 0.1 million, or 2.6%, in the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, primarily due to unique payer retention and new customer acquisition on our Sportsbook offering, primarily related to engagement on the NBA Finals and FIFA World Cup, and on our Prediction Markets offering, which launched in December 2025.
Current wording
MUPs increased 0.5 million, or 12.9%, and 0.2 million, or 5.4%, in the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, primarily due to unique payer retention and new customer acquisition on our Sportsbook and iGaming offerings, and on our prediction markets offering, which launched in December 2025.
Previous wording
Prediction Markets offering. Sports Consumer Volume provides useful information to investors and management as it is a key indicator of customer engagement that is not impacted by variability of sports outcomes and provides important insight into underlying growth trends. We do not utilize volume information to track performance of our iGaming offering because iGaming is generally not subject to the same variability in outcomes.
Current wording
Sports Consumer Volume. We define Sports Consumer Volume as the total amount of settled customer wagers or trades on our Sportsbook and prediction markets offerings. Sports Consumer Volume excludes the volume from market makers on our prediction markets offering. Sports Consumer Volume provides useful information to investors and management as it is a key indicator of customer engagement that is not impacted by variability of sports outcomes and provides important insight into underlying growth trends. We do not utilize volume information to track performance of our iGaming offering because iGaming is generally not subject to the same variability in outcomes.
Previous wording
The tables below presents our Sports Consumer Volume, Sports Net Revenue Margin, and revenue disaggregation for the three and six months ended June 30, 2026 and 2025:
Current wording
The tables below present our Sports Consumer Volume, Sports Net Revenue Margin, and revenue disaggregation for the three and nine months ended September 30, 2026 and 2025:
Previous wording
Sports Consumer Volume increased by $1.7 billion, or 14.5%, to $13.1 billion in the three months ended June 30, 2026, from $11.5 billion in the three months ended June 30, 2025, and increased by $2.0 billion, or 7.8%, to $27.3 billion in the six months ended June 30, 2026, from $25.4 billion in the six months ended June 30, 2025. These increases are primarily due to an increase in MUPs due to unique payer retention and acquisition on our Sportsbook offering, primarily related to engagement on the NBA Finals and FIFA World Cup as well as new customer acquisition on our Prediction Markets offering, which launched in December 2025.
Current wording
Sports Consumer Volume increased by $2.5 billion, or 21.9%, to $13.9 billion in the three months ended September 30, 2026, from $11.4 billion in the three months ended September 30, 2025, and increased by $4.5 billion, or 12.2%, to $41.2 billion in the nine months ended September 30, 2026, from $36.8 billion in the nine months ended September 30, 2025. These increases are primarily due to an increase in MUPs driven by unique payer retention and acquisition on our Sportsbook offering, as well as new customer acquisition on our prediction markets offering, which launched in December 2025.
Previous wording
Sports Net Revenue Margin decreased by 1.9 percentage points, to 6.8% in the three months ended June 30, 2026, from 8.7% in the three months ended June 30, 2025, primarily due to customer-friendly sports outcomes and higher promotions associated with new customers on our Sportsbook offering and Prediction Markets offering. Sports Net Revenue Margin remained consistent at 7.3% in the six months ended June 30, 2026, compared to 7.4% in the six months ended June 30, 2025 primarily driven by a higher hold percentage on our Sportsbook offering, offset by higher promotions related to customer acquisition.
Current wording
Sports Net Revenue Margin increased by 0.4 percentage points, to 5.6% in the three months ended September 30, 2026, from 5.2% in the three months ended September 30, 2025, primarily due to a higher hold percentage on our Sportsbook offering, partially offset by promotional investment associated with new customer acquisition on our prediction markets offering. Sports Net Revenue Margin was flat at 6.7% in the nine months ended September 30, 2026, compared to 6.7% in the nine months ended September 30, 2025, primarily due to a higher hold percentage on our Sportsbook offering, partially offset by promotional investment associated with new customer acquisition on our prediction markets offering.
Previous wording
This Report includes Adjusted EBITDA and Adjusted Diluted 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 Diluted 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 Diluted 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 Diluted Earnings (Loss) Per Share as diluted earnings (loss) per share attributable to common stockholders adjusted for the impact of amortization of acquired intangible assets; discrete tax benefits attributed to acquisitions; 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. The weighted-average shares outstanding used in the calculation of diluted earnings (loss) per share are the GAAP weighted-average diluted shares reported in the consolidated financial statements and are not adjusted.
Current wording
We define and calculate Adjusted Earnings (Loss) Per Share as basic and diluted earnings (loss) per share attributable to common stockholders adjusted for the impact of amortization of acquired intangible assets; discrete tax benefits attributed to acquisitions; 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. The weighted-average shares outstanding used in the calculation of earnings (loss) per share are the GAAP weighted-average shares reported in the consolidated financial statements and are not adjusted.
Previous wording
We include non-GAAP financial measures because they are used by management to evaluate our core operating performance and trends and to make decisions regarding the allocation of capital and new investments. Adjusted EBITDA and Adjusted Diluted Earnings (Loss) Per Share exclude certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of depreciation and amortization, remeasurement of warrant liabilities and stock-based compensation), or non-operating items which are not related to our underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs).
Current wording
We include non-GAAP financial measures because they are used by management to evaluate our core operating performance and trends and to make decisions regarding the allocation of capital and new investments. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share exclude certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of depreciation and amortization, remeasurement of warrant liabilities and stock-based compensation), or non-operating items which are not related to our underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs).
Previous wording
(1)The amounts include the amortization of acquired intangible assets of $37.6 million and $36.4 million for the three months ended June 30, 2026 and 2025, respectively, and $75.1 million and $79.1 million for the six months ended June 30, 2026 and 2025, respectively.
Current wording
(1)The amounts include the amortization of acquired intangible assets of $37.6 million and $33.9 million for the three months ended September 30, 2026 and 2025, respectively, and $112.7 million and $113.0 million for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
(5)Reflects non-recurring and non-ordinary course costs relating to advocacy efforts primarily in pursuit of legalization of DraftKings offerings. For the three and six months ended June 30, 2026, this spend primarily relates to legislative efforts for legalizing iGaming, supporting a ballot measure for legalizing Sportsbook, and other advocacy activities related to certain states. Advocacy and legal expenses incurred in the ordinary course of business have not been adjusted in this measure.
Current wording
(5)Reflects non-recurring and non-ordinary course costs relating to advocacy efforts primarily in pursuit of legalization of DraftKings offerings. For the three and nine months ended September 30, 2026, this spend primarily relates to legislative efforts for legalizing iGaming, supporting a ballot measure for legalizing Sportsbook, and other advocacy activities related to certain states. Advocacy and legal expenses incurred in the ordinary course of business have not been adjusted in this measure.
Previous 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.
Current wording
(6)Primarily includes the gain on repurchase of convertible notes, changes in the 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.
Previous wording
The table below presents the Company’s Adjusted Diluted 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 and 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:
Previous wording
*Weighted average diluted number of shares used to calculate Adjusted Diluted Earnings (Loss) Per Share for the three months ended June 30, 2026 and 2025 was 496.1 million and 529.5 million, respectively, and for the six months ended June 30, 2026 and 2025 was 495.2 million and 529.6 million, 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, 2026 and 2025 was 496.9 million and 496.6 million, respectively, and for the nine months ended September 30, 2026 and 2025 was 495.8 million and 495.5 million, respectively; totals may not add due to rounding.
Previous wording
(1)The amounts include the amortization of acquired intangible assets of $37.6 million and $36.4 million for the three months ended June 30, 2026 and 2025, respectively, and $75.1 million and $79.1 million for the six months ended June 30, 2026 and 2025, respectively.
Current wording
(1)The amounts include the amortization of acquired intangible assets of $37.6 million and $33.9 million for the three months ended September 30, 2026 and 2025, respectively, and $112.7 million and $113.0 million for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
(5)Reflects non-recurring and non-ordinary course costs relating to advocacy efforts primarily in pursuit of legalization of DraftKings offerings. For the three and six months ended June 30, 2026, this spend primarily relates to legislative efforts for legalizing iGaming, supporting a ballot measure for legalizing Sportsbook, and other advocacy activities related to certain states. Advocacy and legal expenses incurred in the ordinary course of business have not been adjusted in this measure.
Current wording
(5)Reflects non-recurring and non-ordinary course costs relating to advocacy efforts primarily in pursuit of legalization of DraftKings offerings. For the three and nine months ended September 30, 2026, this spend primarily relates to legislative efforts for legalizing iGaming, supporting a ballot measure for legalizing Sportsbook, and other advocacy activities related to certain states. Advocacy and legal expenses incurred in the ordinary course of business have not been adjusted in this measure.
Previous wording
(6)Beginning in the first quarter of 2025, the Company began applying an estimated non-GAAP effective tax rate, which was 23% in 2025 and is 28% as of the second quarter of 2026. 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
(6)Beginning in the first quarter of 2025, the Company began applying an estimated non-GAAP effective tax rate, which was 23% in 2025 and is 27% as of the third quarter of 2026. 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
Sales and Marketing. Sales and marketing expense increased $89.3 million, or 38.3%, to $322.5 million in the three months ended June 30, 2026, from $233.2 million in the three months ended June 30, 2025, primarily due to higher external marketing costs, including increased customer acquisition costs associated with the FIFA World Cup, the NBA Playoffs, and the launch of our Super App and Prediction Markets offering.
Current wording
Sales and Marketing. Sales and marketing expense increased $245.3 million, or 68.1%, to $605.7 million in the three months ended September 30, 2026, from $360.4 million in the three months ended September 30, 2025, primarily due to an increase in external marketing costs primarily related to our prediction markets offering and the launch of our Super App, as well as customer acquisition costs associated with the FIFA World Cup and launches in new jurisdictions.
Previous wording
Product and Technology. Product and technology expense increased $19.2 million, or 17.7%, to $127.6 million in the three months ended June 30, 2026, from $108.4 million in the three months ended June 30, 2025, primarily due to higher software and licensing costs and increased employee compensation, including stock-based compensation, in our product and engineering departments.
Current wording
Product and Technology. Product and technology expense increased $22.7 million, or 19.8%, to $137.4 million in the three months ended September 30, 2026, from $114.7 million in the three months ended September 30, 2025, primarily due to higher software and licensing costs and increased employee compensation, including stock-based compensation, in our product and engineering departments.
Previous wording
General and Administrative. General and administrative expense increased by $3.7 million, or 2.3%, to $169.4 million in the three months ended June 30, 2026, from $165.7 million in the three months ended June 30, 2025. The increase was primarily driven by a $19.9 million increase in advocacy and other related legal expenses recognized in the three months ended June 30, 2026, partially offset by lower stock-based compensation expense of $9.5 million.
Current wording
General and Administrative. General and administrative expense increased by $22.3 million, or 14.3%, to $179.1 million in the three months ended September 30, 2026, from $156.8 million in the three months ended September 30, 2025. The increase was primarily driven by a $12.8 million increase in advocacy expenses as well as an increase in stock-based compensation of $4.5 million.
Previous wording
Interest Income (Expense), net. We recorded net interest expense of $13.2 million in the six months ended June 30, 2026, compared to $5.1 million of net interest income in the six months ended June 30, 2025. This fluctuation was primarily due to increased interest expense as a result of the Term B Loan that was entered into in March 2025 and the inclusion of interest income on customer deposits in revenue in the six months ended June 30, 2026 rather than in interest income in the six months ended June 30, 2025.
Current wording
Interest Income (Expense), net. We recorded net interest expense of $11.4 million in the three months ended September 30, 2026, compared to $19.6 million of net interest expense in the three months ended September 30, 2025. The decrease primarily reflects a reclassification recorded in the prior-year period that moved interest income on customer deposits from interest income to revenue, partially offset in the three months ended September 30, 2026 by an increase in interest expense, primarily related to our Term B-2 Loan entered into in August 2026.
Previous wording
Gain (Loss) on Remeasurement of Warrant Liabilities. As all warrants were exercised or expired as of December 31, 2025, there was no remeasurement of warrant liabilities in the three months ended June 30, 2026, compared to a $5.9 million loss in the three months ended June 30, 2025.
Current wording
Gain (Loss) on Remeasurement of Warrant Liabilities. As all warrants were exercised or expired as of December 31, 2025, there was no remeasurement of warrant liabilities in the three months ended September 30, 2026, compared to a $4.2 million gain in the three months ended September 30, 2025.
Previous wording
Other Gain (Loss), net. We recorded a net gain of $3.8 million in the three months ended June 30, 2026, as compared to a $24.5 million gain in the three months ended June 30, 2025. The decrease was primarily attributable to larger gains on the revaluation of contingent consideration for the three months ended June 30, 2025 compared to the three months ended June 30, 2026.
Current wording
Other Gain (Loss), net. We recorded a net gain of $25.8 million in the three months ended September 30, 2026, as compared to a net gain of $16.7 million in the three months ended September 30, 2025. The increase was primarily attributable to an $18.6 million gain on the repurchase of convertible notes, partially offset by lower gains on the remeasurement of contingent consideration.
Previous wording
Income Tax Provision (Benefit). We recorded an income tax benefit of$1.8 million in thethree months ended June 30, 2026, as compared to an income tax expense of$11.8 million in thethree months ended June 30, 2025. 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 provision of$7.3 million in thethree months ended September 30, 2026, as compared to an income tax benefit of$12.1 million in thethree months ended September 30, 2025. 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 decreased by $225.5 million to a net loss of $67.6 million in the three months ended June 30, 2026, as compared to a net income of $157.9 million in the three months ended June 30, 2025, for the reasons discussed above.
Current wording
Net Income (Loss). Net loss increased by $211.9 million to a net loss of $468.7 million in the three months ended September 30, 2026, as compared to a net loss of $256.8 million in the three months ended September 30, 2025, for the reasons discussed above.
Previous wording
Revenue. Revenue increased by $168.0 million, or 5.8%, to $3,089.3 million in the six months ended June 30, 2026, from $2,921.3 million in the six months ended June 30, 2025. The increase was primarily attributable to our Sports revenue, which increased $106.6 million, or 5.7%, due to higher Sports Consumer Volume, primarily driven by an increase in MUPs due to unique payer retention and acquisition on our Sportsbook offering as well as new customer acquisition on our Prediction Markets offering, which launched in December 2025. Our iGaming offering also increased $70.1 million, or 8.2%, due to improved promotional reinvestment.
Current wording
Revenue. Revenue increased by $353.0 million, or 8.7%, to $4,418.4 million in the nine months ended September 30, 2026, from $4,065.3 million in the nine months ended September 30, 2025. The increase was primarily attributable to our Sports revenue, which increased $294.1 million, or 11.9%, due to higher Sports Consumer Volume, primarily driven by an increase in MUPs due to unique payer retention and acquisition on our Sportsbook offering as well as new customer acquisition on our prediction markets offering, which launched in December 2025. Our iGaming offering also increased $79.7 million, or 6.1%, due to higher handle, partially offset by increased promotional reinvestment.
Previous wording
Cost of Revenue. Cost of revenue increased$142.8 million, or 8.4%, to$1,841.2 million in the six months ended June 30, 2026, from$1,698.4 million in thesix months ended June 30, 2025. The increase was primarily due to an increase in our variable expenses, such as gaming taxes and platform costs, which increased $103.8 million and $17.8 million, respectively. The remaining increase was primarily attributable to an increase in amortization of intangible assets of $15.4 million.
Current wording
Cost of Revenue. Cost of revenue increased$258.7 million, or 10.4%, to$2,741.2 million in the nine months ended September 30, 2026, from$2,482.4 million in thenine months ended September 30, 2025. The increase was primarily due to an increase in our variable expenses from higher revenue, such as gaming taxes, which increased $168.3 million.
Previous wording
Cost of revenue as a percentage of revenue increased by 1.5 percentage pointsto 59.6% in thesix months ended June 30, 2026, as compared to 58.1% in thesix months ended June 30, 2025, primarily attributable to an increase in promotional reinvestment around new customer acquisition for our Sportsbook and Prediction Markets offerings.
Current wording
Cost of revenue as a percentage of revenue increased by 0.9 percentage pointsto 62.0% in thenine months ended September 30, 2026, as compared to 61.1% in thenine months ended September 30, 2025, primarily attributable to an increase in promotional reinvestment around new customer acquisition for our Sportsbook and prediction markets offerings.
Previous wording
Sales and Marketing. Sales and marketing expense increased $147.4 million, or 25.6%, to $724.3 million in the six months ended June 30, 2026, from $576.9 million in the six months ended June 30, 2025, primarily due to higher external marketing costs, including increased customer acquisition costs associated with the Super Bowl, FIFA World Cup, the NBA Playoffs, the recent launches in Missouri and Arkansas, and the recent launch of our Prediction Markets offering.
Current wording
Sales and Marketing. Sales and marketing expense increased $392.7 million, or 41.9%, to $1,329.9 million in the nine months ended September 30, 2026, from $937.2 million in the nine months ended September 30, 2025, primarily due to higher external marketing costs, including increased customer acquisition costs associated with the FIFA World Cup, the launches in Missouri and Arkansas, and the launch of our prediction markets offering.
Previous wording
Product and Technology. Product and technology expense increased $39.1 million, or 18.5%, to $250.8 million in the six months ended June 30, 2026, from $211.7 million in the six months ended June 30, 2025, due to increased compensation, including stock-based compensation, for employees in our product and engineering departments.
Current wording
Product and Technology. Product and technology expense increased $61.9 million, or 19.0%, to $388.2 million in the nine months ended September 30, 2026, from $326.4 million in the nine months ended September 30, 2025, due to increased compensation, including stock-based compensation, for employees in our product and engineering departments.
Previous wording
General and Administrative. General and administrative expense increased by $5.3 million, or 1.6%, to $335.4 million in the six months ended June 30, 2026, from $330.1 million in the six months ended June 30, 2025. The increase was primarily driven by a $46.2 million increase in advocacy and other related legal expenses, partially offset by a $38.0 million decrease in compensation expense, of which $32.0 million related to stock-based compensation.
Current wording
General and Administrative. General and administrative expense increased by $27.6 million, or 5.7%, to $514.5 million in the nine months ended September 30, 2026, from $486.9 million in the nine months ended September 30, 2025. The increase was primarily driven by a $59.1 million increase in advocacy and other related legal expenses, partially offset by a decrease in stock-based compensation expense of $27.5 million.
Previous wording
Gain (Loss) on Remeasurement of Warrant Liabilities. As all warrants were exercised or expired as of December 31, 2025, there was no remeasurement of warrant liabilities in the six months ended June 30, 2026, compared to a $3.4 million loss in the six months ended June 30, 2025.
Current wording
Gain (Loss) on Remeasurement of Warrant Liabilities. As all warrants were exercised or expired as of December 31, 2025, there was no remeasurement of warrant liabilities in the nine months ended September 30, 2026, compared to a $0.9 million gain in the nine months ended September 30, 2025.
Previous wording
Other Gain (Loss), net. We recorded a net gain of $26.6 million in the six months ended June 30, 2026, as compared to a $24.5 million gain in the six months ended June 30, 2025. The increase was primarily attributable to larger gains on the revaluation of contingent consideration for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Current wording
Other Gain (Loss), net. We recorded a net gain of $52.4 million in the nine months ended September 30, 2026, as compared to a $41.2 million gain in the nine months ended September 30, 2025. The increase was primarily attributable to an $18.6 million gain on the repurchase of convertible notes, partially offset by lower gains on the remeasurement of contingent consideration.
Previous wording
Income Tax Provision (Benefit). We recorded an income tax expense of$4.6 million in thesix months ended June 30, 2026, as compared to an income tax expense of$6.2 million in thesix months ended June 30, 2025. 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 provision of$11.8 million in thenine months ended September 30, 2026, as compared to an income tax benefit of$5.9 million in thenine months ended September 30, 2025. 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 decreased by $170.6 million to a net loss of $46.5 million in the six months ended June 30, 2026, as compared to a net income of $124.1 million in the six months ended June 30, 2025, for the reasons discussed above.
Current wording
Net Income (Loss). Net loss increased by $382.5 million to a net loss of $515.3 million in the nine months ended September 30, 2026, as compared to a net loss of $132.7 million in the nine months ended September 30, 2025, for the reasons discussed above.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
On August 31, 2026, we repurchased $320.0 million in aggregate principal amount of the Convertible Notes for $300.4 million in cash. As of September 30, 2026, the Convertible Notes, net of issuance costs, balance was $942.1 million.
Current report — wording carried from elsewhere
Term B-2 Loan. In August 2026, we and certain of our subsidiaries entered into the Second Amendment, which provides for a new class of incremental term loans under the Credit Agreement in an aggregate principal amount of $700.0 million (the “Term B-2 Facility” and, such term loans, the “Term B-2 Loan”). The Term B-2 Facility requires principal payments in the amount of 1.00% per annum of the original aggregate principal amount of the Term B-2 Loan payable in quarterly installments. The Term B-2 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 2.00% per annum, or (ii) in the case of ABR Term Loans, ABR plus an applicable margin of 1.00% per annum (with each of the capitalized terms used in clauses (i) and (ii) as defined in the Credit Agreement). As of September 30, 2026, $700.0 million in aggregate principal amount was outstanding under the Term B-2 Facility.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Sports Consumer Volume. We define Sports Consumer Volume as the total amount of settled customer wagers or trades on our Sportsbook and Prediction Markets offerings. Sports Consumer Volume excludes the volume from market makers on our