DraftKings Inc. - Ordinary Shares - Class A

Strong Q3 momentum; core + “predictions” both accelerating - Total revenue +16% YoY to $1.33B in Q3, driven by sportsbook margin expansion and early success in predictions. - Monthly Unique Payers (MUPs) +13% YoY to 4.1M; avg revenue per MUP +3% YoY to $109. - Sports consumer volume +22% YoY, and sportsbook net revenue +36% YoY (with handle +12% YoY and net revenue margin up ~120 bps to 6.4%). - iGaming customer acquisition +76% YoY, while iGaming gross revenue +7% YoY and net revenue +2% YoY (promotions elevated as they invest to welcome new customers).

Predictions scaling fast; large investment with improving economics - 1.6M+ customers engaged with predictions YTD (management says it’s already powering growth across the business). - Higher engagement/volume: predictions is operating with strong retention and significant trading activity (management cites high combo usage—notably ~27% of consumer volume in October and 70%+ of customers trading combos). - Management says 2026 predictions cohort payback ~20 months (better than their 2-year target) and run-rating ~ $350M annualized gross profit. - Take rates ~11.1% on DKX on trades (management notes they capture ~2/3 of gross revenue; third-party market makers capture the remainder).

Forecasts / guidance updates: predictions spend up in 2026; strong 2027 outlook - FY2026 guidance lowered on adjusted EBITDA (still revenue up): - Revenue: $6.35B–$6.55B (vs prior $6.5B–$6.9B). - Adjusted EBITDA: loss of $175M–$275M (vs prior $700M–$900M), primarily due to higher predictions investment. - Management expects predictions spend $650M–$700M in FY26; predictions revenue immaterial in FY26 because promotions offset most gross revenue. - FY2027 guidance (new): - Revenue: $7.35B–$7.75B (+17% YoY at midpoint). - Adjusted EBITDA: $800M–$1B. - Predictions investment steps down to $250M–$350M (midpoint $300M), with predictions contributing meaningful gross profit into 2027. - Core adjusted EBITDA expected ~ $1.2B at midpoint, driving core adjusted EBITDA margin ~18% (management cites ~+370 bps in 2026 and +~360 bps in 2027 to ~18% at midpoint).