DraftKings reported its Q4 results on Thursday, highlighting revenue growth of 43%, largely due to record sports betting handles. 

In the three months between October and December last year, the company accepted $16.8 billion of sports bets. Favorable sporting results led to revenue of $1.35 billion, an increase of 63% from the same period in 2024. 

Esports betting contributed to those numbers in nine states, as well as Ontario. The platform also said its launch in Missouri was successful, and is eyeing entry into more states through DraftKings Predictions. 

The company also offers fantasy esports contests and noted that revenue in its DFS segment also grew.

“We closed 2025 on a high note. Fourth quarter revenue increased 43% year-over-year and we achieved records for revenue and Adjusted EBITDA. Our core business is strong as we enter 2026,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder.

Stock Price Falls Despite Profits

Overall revenue in Q4 reached $1.99 billion, up $596 million from Q4 2024. That led to total revenue for 2025 exceeding $6 billion, up from $4.77 billion the previous year. The company was able to post profits for the first time, reversing a net loss of $507 million in 2024 to profits of $3.7 million. 

Despite the positive numbers, a lower-than-expected forecast for 2026 led to DK’s stock price falling. The company projects revenue of $6.5 to $6.9 billion for the year, less than the $7.3 billion predicted by analysts. 

As a result, the company’s share price fell from over $26 on Thursday to just over $21 in extended trading at the end of the day. 

Gambling On Prediction Markets

One of the major focuses in Robins’ letter to shareholders was the company’s new vertical, DraftKings Predictions. 

The platform launched at the end of the year and Robins said it represents a “massive, incremental opportunity” to acquire new customers.

He added, “We plan to deploy growth capital to build the best customer experience in Predictions, and acquire millions of customers. We have the playbook to execute and win.”

The company is betting big on success and has already given up a sports betting license in Nevada when launching the platform. 

Robins said he believes prediction markets offer a unique opportunity to acquire new users and highlighted two sources of revenue from the emerging industry. Firstly, the company can take transaction fees from users’ peer-to-peer trades, while its well-established trading team can also use both the DK platform and other exchanges to increase profits. 

Esports markets are not currently available on DraftKings Predictions, but as the platform expands, we would expect to see a range of events become available. Rival platforms Kalshi and Polymarket have extensive coverage of major esports tournaments.