Revenue growth decelerated to -4.6% in Q2 2026 from 16.8% in Q1, with gross margins fluctuating between 31.5% and 46.0% over ten quarters, reflecting structural cost pressures from state taxes and promotional spend.
DraftKings Inc. (DKNG) annual income statement — 9-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Sales/Revenue | 6.41B | 6.05B | 4.77B | 3.67B | 2.24B | 1.3B | 614.53M | 323.41M | 226.28M | 191.84M |
| Revenue Growth % | 17.4% | 26.99% | 30.07% | 63.6% | 72.87% | 110.9% | 90.02% | 42.93% | 17.95% | - |
| Cost of Goods Sold | 3.82B | 3.56B | 2.95B | 2.29B | 1.48B | 794.16M | 346.59M | 103.89M | 48.69M | 31.75M |
| COGS % of Revenue | - | 58.75% | 61.89% | 62.54% | 66.25% | 61.28% | 56.4% | 32.12% | 21.52% | 16.55% |
| Gross Profit | 2.59B | 2.5B | 1.82B | 1.37B | 756.19M | 501.86M | 267.94M | 219.52M | 177.59M | 160.09M |
| Gross Margin % | 40.45% | 41.25% | 38.11% | 37.46% | 33.75% | 38.72% | 43.6% | 67.88% | 78.48% | 83.45% |
| Gross Profit Growth % | - | 37.45% | 32.33% | 81.6% | 50.68% | 87.3% | 22.06% | 23.61% | 10.93% | - |
| Operating Expenses | 3B | 2.51B | 2.43B | 2.16B | 2.27B | 2.06B | 1.11B | 366.07M | 254.37M | 233.29M |
| OpEx % of Revenue | - | 41.51% | 50.89% | 59% | 101.23% | 159.22% | 180.82% | 113.19% | 112.41% | 121.61% |
| Selling, General & Admin | 2.47B | 2.05B | 2.03B | 1.81B | 1.95B | 1.81B | 942.57M | 310.14M | 221.48M | 213.08M |
| SG&A % of Revenue | - | 33.92% | 42.56% | 49.31% | 87.02% | 139.64% | 153.38% | 95.9% | 97.88% | 111.07% |
| Research & Development | 394.12M | 459.91M | 397.11M | 355.16M | 318.25M | 253.66M | 168.63M | 55.93M | 32.88M | 20.21M |
| R&D % of Revenue | - | 7.6% | 8.33% | 9.69% | 14.2% | 19.57% | 27.44% | 17.29% | 14.53% | 10.54% |
| Other Operating Expenses | 1000K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -607K |
| Operating Income | -403.7M | -15.82M | -609M | -789.23M | -1.51B | -1.56B | -843.26M | -146.54M | -76.78M | -73.2M |
| Operating Margin % | -6.3% | -0.26% | -12.77% | -21.53% | -67.48% | -120.49% | -137.22% | -45.31% | -33.93% | -38.16% |
| Operating Income Growth % | - | 97.4% | 22.84% | 47.79% | 3.19% | -85.19% | -475.42% | -90.86% | -4.89% | - |
| EBITDA | -100.31M | 259.67M | -338.14M | -587.3M | -1.34B | -1.44B | -765.85M | -132.91M | -69.28M | -66.9M |
| EBITDA Margin % | -1.57% | 4.29% | -7.09% | -16.02% | -59.92% | -111.15% | -124.62% | -41.1% | -30.62% | -34.87% |
| EBITDA Growth % | -156.08% | 176.79% | 42.42% | 56.25% | 6.8% | -88.09% | -476.22% | -91.84% | -3.57% | - |
| D&A (Non-Cash Add-back) | 303.38M | 275.49M | 270.85M | 201.92M | 169.25M | 121.14M | 77.41M | 13.64M | 7.5M | 6.3M |
| EBIT | -353.65M | 27.93M | -590.2M | -788.57M | -1.44B | -1.52B | -843.26M | -146.54M | -76.78M | -73.2M |
| Net Interest Income | -5.64M | -19.94M | 44.3M | 55.74M | 18.7M | 1.96M | -1.07M | 1.35M | 666K | -1.54M |
| Interest Income | 0 | 0 | 47.26M | 58.42M | 21.35M | 4.07M | 0 | 1.35M | 666K | 0 |
| Interest Expense | 5.64M | 19.94M | 2.96M | 2.68M | 2.65M | 2.11M | 1.07M | 0 | 0 | 1.54M |
| Other Income/Expense | 44.41M | 23.8M | 15.37M | -2.75M | 65.9M | 46.69M | -389.2M | 3.87M | 666K | -2.15M |
| Pretax Income | -359.29M | 7.98M | -593.63M | -791.97M | -1.45B | -1.51B | -1.23B | -142.68M | -76.11M | -75.35M |
| Pretax Margin % | -5.61% | 0.13% | -12.45% | -21.61% | -64.53% | -116.89% | -200.55% | -44.12% | -33.64% | -39.27% |
| Income Tax | 19.54M | 4.27M | -86.34M | 10.17M | -67.87M | 8.27M | -622K | 58K | 105K | 210K |
| Effective Tax Rate % | -5.44% | 53.53% | 14.54% | -1.28% | 4.69% | -0.55% | 0.05% | -0.04% | -0.14% | -0.28% |
| Net Income | -378.83M | 3.71M | -507.29M | -802.14M | -1.38B | -1.52B | -1.23B | -142.73M | -76.22M | -75.56M |
| Net Margin % | -5.91% | 0.06% | -10.64% | -21.88% | -61.5% | -117.53% | -200.45% | -44.13% | -33.68% | -39.38% |
| Net Income Growth % | -41.58% | 100.73% | 36.76% | 41.79% | 9.53% | -23.65% | -763.03% | -87.27% | -0.88% | - |
| Net Income (Continuing) | -378.83M | 3.71M | -507.29M | -802.14M | -1.38B | -1.52B | -1.23B | -142.73M | -76.22M | -75.56M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.76 | -0.01 | -1.05 | -1.73 | -3.15 | -3.79 | -4.03 | -0.77 | -0.41 | -0.41 |
| EPS Growth % | -47.64% | 99.23% | 39.31% | 45.08% | 16.89% | 5.96% | -423.38% | -87.8% | 0% | - |
| EPS (Basic) | - | -0.01 | -1.05 | -1.73 | -3.15 | -3.79 | -4.03 | -0.77 | -0.41 | -0.41 |
| Diluted Shares Outstanding | 496.93M | 495.9M | 481.95M | 462.6M | 436.51M | 402.49M | 305.59M | 184.6M | 184.6M | 184.6M |
| Basic Shares Outstanding | 496.93M | 371M | 481.95M | 462.6M | 436.51M | 402.49M | 305.59M | 184.6M | 184.6M | 184.6M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying DKNG stock.
For fiscal year 2025, DraftKings Inc. (DKNG) reported total revenue of $6.05B. This represents a 3056.0% increase compared to $191.8M in 2017.
DraftKings Inc. (DKNG) is profitable, generating $3.7M in net income for the fiscal year ending 2025 with a net profit margin of 0.1%.
DraftKings Inc. (DKNG) reported an operating income of $-15.8M, resulting in an operating profit margin of -0.3%. This margin reflects the operational efficiency of the business before interest and taxes.
DraftKings Inc. (DKNG) generated $2.50B in gross profit for the year, representing a gross profit margin of 41.3%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Regulatory and leverage overhang
Metrics are mathematically derived from official filings.
Seasonal Swings Mask Underlying Growth
DraftKings' revenue growth decelerated to -4.6% in Q2 2026 from 16.8% in Q1, reflecting seasonal sports calendar shifts, yet Q4 2025 surged 42.8% year-over-year, per reported figures.
The revenue trajectory is heavily influenced by the sports calendar, with Q4 peaks driven by NFL and NBA seasons. The -4.6% decline in Q2 2026 appears to be a seasonal trough rather than a structural slowdown, as Q1 2026 still grew 16.8%. However, the deceleration from Q4's 42.8% growth suggests that the pace of new state launches and user acquisition may be normalizing, warranting close monitoring of MUP trends.
Gross Margin Capped by Structural Costs
Gross margin fluctuated between 31.5% and 46.0% over the last ten quarters, with Q2 2026 at 38.2%, reflecting high variable costs from state taxes and promotional spend, as reported in financial statements.
The gross margin is structurally constrained by gaming taxes and revenue-sharing agreements, which are non-negotiable external costs. The wide quarterly swings, from 31.5% in Q3 2025 to 46.0% in Q4 2025, appear to be driven by customer-friendly sporting outcomes and promotional intensity. The Q2 2026 margin of 38.2% is below the trailing average, suggesting that promotional competition may be intensifying, which could limit near-term margin expansion.
Operating Leverage Emerges in Peak Quarters
Operating margin swung from -23.8% in Q3 2025 to +7.6% in Q4 2025, demonstrating significant operating leverage, but Q2 2026 fell to -4.7%, per reported data, indicating ongoing volatility.
The operating leverage is evident in the Q4 2025 quarter, where revenue of $2.0B drove a positive operating margin of 7.6%, while Q3 2025's lower revenue of $1.1B resulted in a -23.8% margin. This suggests that fixed costs, including technology and corporate overhead, are being absorbed more efficiently at higher revenue levels. However, the Q2 2026 margin of -4.7% indicates that the company has not yet achieved consistent profitability, and the thin margin profile leaves little buffer against competitive spending or regulatory changes.
SBC and Tax Anomalies Distort EPS
Net income swung from a $157.9M profit in Q2 2025 to a $67.6M loss in Q2 2026, with stock-based compensation averaging $82.6M per quarter, as per SEC filings, complicating earnings quality.
The reported EPS figures are heavily influenced by non-operating items and stock-based compensation. For instance, Q2 2024 reported a net income of $63.8M despite an operating loss of -$32.4M, suggesting a tax benefit or other one-time gains. The consistent SBC expense, ranging from $65.2M to $110.1M per quarter, represents a real economic cost that is excluded from adjusted EBITDA metrics. Investors should focus on cash-based profitability measures, as the GAAP net income appears to be subject to significant volatility from non-operating items.
SG&A Dominates Cost Structure
SG&A expenses ranged from $380.8M to $629.4M over the last ten quarters, with Q2 2026 at $492.0M, representing the largest cost line, as reported in financial statements, and driving operating losses.
SG&A, which includes sales and marketing, is the primary cost driver, reflecting the company's aggressive user acquisition strategy. The Q2 2026 SG&A of $492.0M is higher than the Q2 2025 level of $398.9M, indicating that promotional spending has not been curtailed despite the revenue decline. This suggests that management is still prioritizing market share over profitability, which may be necessary to defend its duopoly position but could delay the path to sustained positive operating income.
Q4 2025 Marks Profitability Inflection
Q4 2025 was the first quarter with significant operating income of $151.8M and a 7.6% operating margin, a stark contrast to the -27.3% margin in Q4 2024, based on reported figures.
The Q4 2025 quarter represents a clear inflection point, as operating income turned positive for the first time in the provided data, driven by a 42.8% revenue surge and a gross margin of 46.0%. This suggests that the company's investments in technology and market share are beginning to pay off, with the peak sports season providing the scale needed to cover fixed costs. However, the subsequent quarters have not sustained this profitability, indicating that the inflection may be seasonal rather than structural, and investors should monitor whether Q4 2026 can replicate this performance.
Promotional Spending Threatens Margins
Despite Q4 2025 profitability, Q2 2026 operating margin fell to -4.7% with SG&A up 23% year-over-year, suggesting that competitive pressures may keep marketing costs elevated, as per reported data.
The short-seller thesis would focus on the sustainability of the Q4 2025 profitability, given that Q2 2026 reverted to an operating loss. The increase in SG&A from $398.9M in Q2 2025 to $492.0M in Q2 2026, despite a revenue decline, indicates that the company is still spending heavily to acquire and retain users. This suggests that the 'defensive marketing' costs may be permanent, and the path to consistent profitability could be longer than expected. Additionally, the high debt-to-equity ratio of 3.06 and the ongoing SEC/IRS investigations add to the risk profile, potentially limiting financial flexibility.