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DraftKings Gears Up to Post Q2 Earnings: What's in the Cards?
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Key Takeaways
{\"0\":\"DraftKings is set to report Q2 results, with EPS expected to rise 241.7% year over year.\",\"1\":\"User growth, platform innovation and acquisitions like SimpleBet may fuel revenue gains.\",\"2\":\"Rising marketing costs and tax changes could weigh on EBITDA despite broader expansion.\"}
DraftKings Inc. (DKNG - Free Report) is scheduled to report second-quarter 2025 results on Aug. 6, after the closing bell. In the last reported quarter, the company registered an earnings miss of 33.3%.
DKNG’s Estimates Trend
The Zacks Consensus Estimate for second-quarter earnings is pegged at 41 cents per share, indicating a whopping 241.7% increase from the 12 cents reported in the year-ago quarter. The consensus estimate has been unchanged in the past 30 days.
For revenues, the consensus mark is pegged at $1.42 billion, indicating a 28.3% year-over-year increase.
Factors Likely to Shape DraftKings’ Quarterly Results
DraftKings’ second-quarter top and bottom lines are expected to have increased year over year, driven by a surge in new online sportsbook and iGaming users, with it maintaining strong customer-acquisition momentum. The steady rise in Monthly Unique Payers is likely to have supported revenue growth, reinforcing its expanding market presence. The integration of acquisitions like SimpleBet and Sports IQ is likely to have enhanced real-time wagering capabilities and driven higher user engagement across the platform.
The consensus estimate for Monthly Unique Payers is pegged at 3.9 million, indicating an increase from 3.1 million reported in the year-ago quarter.
Furthermore, DraftKings has been refining its product lineup with innovative features like in-house player prop wagers and progressive parlays, attracting more users to the Sportsbook platform. Additionally, the company is likely to have benefited from lower customer-acquisition costs, enhancing its profitability over time.
For the second quarter, DraftKings expects revenues to increase approximately 25% year over year and adjusted EBITDA to exceed $200 million. The company reported an adjusted EBITDA of $128 million in the year-ago quarter.
However, elevated marketing expenses due to continued investment in customer acquisition and brand building are likely to have pressured adjusted EBITDA. Also, customer-friendly sport outcomes are likely to have weighed on performance, creating a headwind to both revenues and profitability.
In addition, Maryland increasing its sportsbook tax rate and Jackpocket shutting down digital lottery courier operations in Texas and New Mexico are likely to have added to cost pressures despite the overall business expansion.
What Does the Zacks Model Unveil for DKNG?
Our proven model does not conclusively predict an earnings beat for DraftKings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
DKNG’s Earnings ESP: DraftKings has an Earnings ESP of -10.30% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank of DKNG: The company carries a Zacks Rank #3 at present.
Stocks With the Favorable Combination
Here are some stocks from the Zacks Consumer-Discretionary space that investors may consider, as our model shows that these have the right combination of elements to deliver an earnings beat this time around.
In the to-be-reported quarter, Carnival’s earnings are expected to increase 3.2%. Carnival’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 169.9%.
PENN Entertainment, Inc. (PENN - Free Report) currently has an Earnings ESP of +23.32% and a Zacks Rank of 3.
PENN Entertainment’s earnings for the to-be-reported quarter are expected to increase 77.8%. PENN reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 13.5%.
Live Nation Entertainment, Inc. (LYV - Free Report) currently has an Earnings ESP of +1.19% and a Zacks Rank of 3.
In the to-be-reported quarter, Live Nation’s earnings are expected to remain flat year over year. Live Nation’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 40.8%.
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DraftKings Gears Up to Post Q2 Earnings: What's in the Cards?
Key Takeaways
DraftKings Inc. (DKNG - Free Report) is scheduled to report second-quarter 2025 results on Aug. 6, after the closing bell. In the last reported quarter, the company registered an earnings miss of 33.3%.
DKNG’s Estimates Trend
The Zacks Consensus Estimate for second-quarter earnings is pegged at 41 cents per share, indicating a whopping 241.7% increase from the 12 cents reported in the year-ago quarter. The consensus estimate has been unchanged in the past 30 days.
For revenues, the consensus mark is pegged at $1.42 billion, indicating a 28.3% year-over-year increase.
Factors Likely to Shape DraftKings’ Quarterly Results
DraftKings’ second-quarter top and bottom lines are expected to have increased year over year, driven by a surge in new online sportsbook and iGaming users, with it maintaining strong customer-acquisition momentum. The steady rise in Monthly Unique Payers is likely to have supported revenue growth, reinforcing its expanding market presence. The integration of acquisitions like SimpleBet and Sports IQ is likely to have enhanced real-time wagering capabilities and driven higher user engagement across the platform.
The consensus estimate for Monthly Unique Payers is pegged at 3.9 million, indicating an increase from 3.1 million reported in the year-ago quarter.
Furthermore, DraftKings has been refining its product lineup with innovative features like in-house player prop wagers and progressive parlays, attracting more users to the Sportsbook platform. Additionally, the company is likely to have benefited from lower customer-acquisition costs, enhancing its profitability over time.
For the second quarter, DraftKings expects revenues to increase approximately 25% year over year and adjusted EBITDA to exceed $200 million. The company reported an adjusted EBITDA of $128 million in the year-ago quarter.
DraftKings Inc. Price and EPS Surprise
DraftKings Inc. price-eps-surprise | DraftKings Inc. Quote
However, elevated marketing expenses due to continued investment in customer acquisition and brand building are likely to have pressured adjusted EBITDA. Also, customer-friendly sport outcomes are likely to have weighed on performance, creating a headwind to both revenues and profitability.
In addition, Maryland increasing its sportsbook tax rate and Jackpocket shutting down digital lottery courier operations in Texas and New Mexico are likely to have added to cost pressures despite the overall business expansion.
What Does the Zacks Model Unveil for DKNG?
Our proven model does not conclusively predict an earnings beat for DraftKings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
DKNG’s Earnings ESP: DraftKings has an Earnings ESP of -10.30% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank of DKNG: The company carries a Zacks Rank #3 at present.
Stocks With the Favorable Combination
Here are some stocks from the Zacks Consumer-Discretionary space that investors may consider, as our model shows that these have the right combination of elements to deliver an earnings beat this time around.
Carnival Corporation & plc (CCL - Free Report) currently has an Earnings ESP of +0.40% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the to-be-reported quarter, Carnival’s earnings are expected to increase 3.2%. Carnival’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 169.9%.
PENN Entertainment, Inc. (PENN - Free Report) currently has an Earnings ESP of +23.32% and a Zacks Rank of 3.
PENN Entertainment’s earnings for the to-be-reported quarter are expected to increase 77.8%. PENN reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 13.5%.
Live Nation Entertainment, Inc. (LYV - Free Report) currently has an Earnings ESP of +1.19% and a Zacks Rank of 3.
In the to-be-reported quarter, Live Nation’s earnings are expected to remain flat year over year. Live Nation’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 40.8%.