What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-09 · 150 added, 73 removed, 213 unchanged (51% of the section changed)

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The forward-looking statements depend upon events, risks and uncertainties that may be outside of our control.

The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would,” “forecast,” “propose,” and similar expressions or the negative of these words may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would,” “forecast,” “propose,” and similar expressions or the negative of these words, or statements of vision, strategy or outlook, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

Our historical results are not necessarily indicative of the results that may be expected for any events in the future as our business and operations are subject to a variety of risks and uncertainties, many of which are beyond our control, and, consequently, our actual results may differ materially from those projected.

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The following table sets forth a summary of our financial results for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(amounts in thousands, except per share amounts) 2025 2024 2025 2024

$ 1,512,507 $ 1,104,441 $ 2,921,313 $ 2,279,437

(33,864) (142,568)

Net Income (Loss) 157,936 63,822 124,072 (78,746)

Adjusted EBITDA (1)

300,644 127,967 403,273 150,357

Basic and Diluted Loss Per Share (0.07) (0.30)

Basic Earnings (Loss) Per Share 0.32 0.13 0.25 (0.17)

Diluted Earnings (Loss) Per Share 0.30 0.10 0.23 (0.17)

Adjusted Earnings (Loss) Per Share (2)

0.38 0.22 0.50 0.27

(1) Adjusted EBITDA is a non-GAAP financial measure.

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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.

Revenue increased by $233.8 million in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 as a result of continued healthy customer engagement, efficient acquisition of new customers, the expansion of the Company’s Sportsbook product offering into new jurisdictions, higher structural Sportsbook hold percentage, improved promotional reinvestment for Sportsbook, and the impact of our acquisition of Jackpocket Inc.

Revenue increased by $408.1 million and $641.9 million in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 as a result of continued healthy customer engagement, efficient acquisition of new customers, the expansion of the Company’s Sportsbook product offering into new jurisdictions, higher structural Sportsbook hold percentage, improved promotional reinvestment for Sportsbook, and the impact of our acquisition of Jackpocket Inc.

(“Jackpocket”), which was completed on May 22, 2024 (the “Jackpocket Transaction”).

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We expect the number of MUPs to grow as we attract, retain and re-engage users in new and existing jurisdictions and expand our product offerings to appeal to a wider audience.

The charts below present our average MUPs for the three months ended March 31, 2024 and 2025:

The charts below present our average MUPs for the three and six months ended June 30, 2024 and 2025:

Average Revenue per MUP (“ARPMUP”).

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ARPMUP is a key indicator of our ability to drive usage and monetization of our product offerings.

The charts below present our ARPMUP for the three months ended March 31, 2024 and 2025:

The increase in MUPs for the three months ended March 31, 2025, compared to the same periods in 2024, primarily reflects strong unique payer retention and acquisition across our Sportsbook and iGaming product offerings and the impact of the Jackpocket Transaction.

Excluding the impact of the Jackpocket Transaction, MUPs increased 0.4 million or 10.8% to 3.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

ARPMUP decreased in the three months ended March 31, 2025, compared to the same periods in 2024 , primarily due to lower ARPMUP for Jackpocket customers, compared to DraftKings’ other product offerings, which was partially offset by structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook.

Excluding the impact of the Jackpocket Transaction, ARPMUP increased $8, or 6.8% to $122.1 for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 .

The charts below present our ARPMUP for the three and six months ended June 30, 2024 and 2025:

MUPs increased by 0.2 million or 6.5% and 0.5 million or 15.1% in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, primarily reflecting strong unique payer retention and acquisition across our Sportsbook and iGaming product offerings and the impact of the Jackpocket Transaction.

Excluding the impact of the Jackpocket Transaction, MUPs increased by 0.1 million or 4.7% and 0.3 million or 8.0% in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.

ARPMUP increased by $34 or 29.1% and $12 or 10.4% in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, primarily due to structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook.

Excluding the impact of the Jackpocket Transaction, ARPMUP in creased by $39 or 30.4% and $21 or 17.7% in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.

Sportsbook Handle.

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This provides useful information to investors and management as it is a key indicator in measuring the combined impact of our overall margin on our Sportsbook product offering and promotional reinvestment.

The chart below presents our Sportsbook Handle, Sportsbook Net Revenue Margin, and revenue disaggregation for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The chart below presents our Sportsbook Handle, Sportsbook Net Revenue Margin, and revenue disaggregation for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,

(amounts in thousands) 2025 2024 $ Change % Change

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Total Revenue $ 1,512,507 $ 1,104,441 $ 408,066 36.9 %

Sportsbook Handle increased by $1,879.0 million, or 16%, to $13,880.4 million in the three months ended March 31, 2025, from $12,001.4 million in the three months ended March 31, 2024.

Six Months Ended June 30,

(amounts in thousands) 2025 2024 $ Change % Change

Sportsbook Handle $ 25,355,232 $ 22,794,438 $ 2,560,794 11.2 %

Sportsbook Revenue 1,879,829 1,420,943 458,886 32.3 %

Sportsbook Net Revenue Margin 7.4 % 6.2 % N/A N/A

Sportsbook Revenue $ 1,879,829 $ 1,420,943 $ 458,886 32.3 %

iGaming Revenue 853,131 720,549 132,582 18.4 %

Other Revenue 188,353 137,945 50,408 36.5 %

Total Revenue $ 2,921,313 $ 2,279,437 $ 641,876 28.2 %

Sportsbook Handle increased by $681.8 million, or 6.3%, to $11.5 billion in the three months ended June 30, 2025, from $10.8 billion in the three months ended June 30, 2024, and increased by $2.6 billion, or 11.2% to $25.4 billion in the six months ended June 30, 2025, from $22.8 billion in the six months ended June 30, 2024.

The increase is primarily due to MUPs increasing in 2025 as compared to 2024.

The increase in MUPs was due to strong player retention and acquisition across our Sportsbook product offering.

Sportsbook Net Revenue Margin increased by 0.3 percentage points, to 6.4% in the three months ended March 31, 2025, from 6.1% in the three months ended March 31, 2024.

The increase is primarily due to structural improvement in our Sportsbook hold percentage and improved promotional reinvestment.

iGaming revenue increased $53.5 million , or 14.5% , to $423.5 million in the three months ended March 31, 2025, from $370.0 million in the three months ended March 31, 2024.

Sportsbook Net Revenue Margin increased by 2.3 percentage points, to 8.7% in the three months ended June 30, 2025, from 6.4% in the three months ended June 30, 2024, primarily driven by higher structural Sportsbook hold percentage, sportsbook-friendly outcomes, and improved promotional reinvestment.

Sportsbook Net Revenue Margin increased by 1.2 percentage points, to 7.4% in the six months ended June 30, 2025, from 6.2% in the six months ended June 30, 2024 primarily driven by higher structural hold percentage and improved promotional reinvestment, partially offset by customer-friendly sports outcomes.

iGaming revenue increased $79.1 million , or 22.6% , to $429.7 million in the three months ended June 30, 2025, from $350.6 million in the three months ended June 30, 2024, and increased by $132.6 million, or 18.4%, to $853.1 million in the six months ended June 30, 2025, from $720.5 million in the six months ended June 30, 2024.

The increase is primarily due to an increase in MUPs for the product offering.

Other revenue increased $32.4 million, or 46% , to $103.4 million in the three months ended March 31, 2025, from $70.9 million in the three months ended March 31, 2024.

Other revenue increased $18.0 million, or 26.8% , to $85.0 million in the three months ended June 30, 2025, from $67.0 million in the three months ended June 30, 2024, and increased $50.4 million, or 36.5%, to $188.4 million in the six months ended June 30, 2025, from $137.9 million in the six months ended June 30, 2024.

The increase is primarily due to the inclusion of revenue from Jackpocket.

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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.

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.

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 a substitute for any U.S.

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.

We define and calculate Adjusted EBITDA as net income (loss) before the impact of interest income and expense, income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items:

We define and calculate Adjusted EBITDA as net income (loss) before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items:

stock-based compensation;

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and other non-recurring and non-operating costs or income, as described in the reconciliation below.

We define and calculate Adjusted Earnings (Loss) Per Share as basic earnings (loss) per share attributable to common stockholders before the impact of amortization of acquired intangible assets;

We define and calculate Adjusted Earnings (Loss) Per Share as diluted earnings (loss) per share attributable to common stockholders before the impact of amortization of acquired intangible assets;

stock-based compensation;

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gain or loss on remeasurement of warrant liabilities;

and other non-recurring and non-operating costs or income, as described in the reconciliation below.

other non-recurring and non-operating costs or income;

and the tax impact of adjusting items, as described in the reconciliation below.

We include non-GAAP financial measures because they are used by management to evaluate our core operating performance and trends and to make strategic 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.

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 amortization of acquired intangible assets, 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).

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 amortization of acquired intangible assets, 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).

Adjusted EBITDA

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GAAP, for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(amounts in thousands) 2025 2024 2025 2024

Net loss $ (33,864) $ (142,568)

Net income (loss) $ 157,936 $ 63,822 $ 124,072 $ (78,746)

Adjusted for:

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Transaction-related costs (3)

— 18,585 — 23,493

Litigation, settlement, and related costs (4)

— 10,804 — 20,124

Advocacy and other related legal expenses (5)

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Other non-recurring costs and non-operating (income) costs (6)

(24,268) (20,192) (24,247) (19,787)

Adjusted EBITDA $ 300,644 $ 127,967 $ 403,273 $ 150,357

(1) The amounts include the amortization of acquired intangible assets of $42.7 million and $29.3 million for the three months ended March 31, 2025 and 2024, respectively.

(1) The amounts include the amortization of acquired intangible assets of $36.4 million and $36.4 million for the three months ended June 30, 2025 and 2024, respectively, and $79.1 million and $65.7 million for the six months ended June 30, 2025 and 2024, respectively.

(2) Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans.

(3) Includes capital markets advisory, consulting, accounting and legal expenses related to the evaluation, negotiation, and consummation of transactions and offerings that are under consideration, pending, or completed, as well as integration costs related to acquisitions.

(4) Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.

(4) Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our ordinary-course business operations.

(5) Reflects non-recurring and non-ordinary course costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings.

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Adjusted Earnings (Loss) Per Share

The table below presents the Company’s Adjusted Earnings (Loss) Per Share reconciled to its basic earnings (loss) per share attributable to common stockholders, which is the most directly comparable financial measure calculated in accordance with GAAP, for the periods indicated:

Three Months Ended March 31,

Basic earnings (loss) per share attributable to common stockholders $ (0.07) $ (0.30)

The table below presents the Company’s Adjusted 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:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Diluted earnings (loss) per share attributable to common stockholders $ 0.30 $ 0.10 $ 0.23 $ (0.17)

Adjusted for:

Amortization of acquired intangible assets (1)

0.07 0.07 0.15 0.14

Discrete tax benefit attributed to the acquisition of Jackpocket Inc.

— (0.15) — (0.16)

Stock-based compensation (3)

0.16 0.17 0.31 0.39

Transaction-related costs (4)

— 0.04 — 0.05

Litigation, settlement, and related costs (5)

— 0.02 — 0.04

Advocacy and other related legal expenses (6)

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Tax impact of adjusting items (7)

(0.11) — (0.16) —

Adjusted Earnings (Loss) Per Share* $ 0.38 $ 0.22 $ 0.50 $ 0.27

_____________

* Weighted average number of shares used to calculate Adjusted Earnings (Loss) Per Share for the three months ended March 31, 2025 and 2024 was 493.3 million and 474.2 million, respectively;

* Weighted average diluted number of shares used to calculate Adjusted Earnings (Loss) Per Share for the three months ended June 30, 2025 and 2024 was 529.5 million and 518.8 million, respectively, and 529.6 million and 476.8 million for the six months ended June 30, 2025 and 2024, respectively;

totals may not add due to rounding.

(1) The amounts include the amortization of acquired intangible assets of $42.7 million and $29.3 million for the three months ended March 31, 2025 and 2024, respectively.

(2) The Company recorded a discrete income tax benefit of $75.8 million during the second quarter of 2024 which was attributable to non-recurring partial releases of the Company's U.S.

valuation allowance as a result of the purchase accounting for Jackpocket.

(3) Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans.

(4) Includes capital markets advisory, consulting, accounting and legal expenses related to the evaluation, negotiation, and consummation of transactions and offerings that are under consideration, pending, or completed, as well as integration costs related to acquisitions.

(4) Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.

(5) Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our ordinary-course business operations.

(6) Reflects non-recurring and non-ordinary course costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings.

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Results of Operations

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024

The following table sets forth a summary of our consolidated results of operations for the interim periods indicated, and the changes between periods:

Three Months Ended March 31,

Three Months Ended June 30,

(amounts in thousands, except percentages) 2025 2024 $ Change % Change

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Net income (loss) attributable to common stockholders $ 157,936 $ 63,822 $ 94,114 147.5 %

Revenue increased by $233.8 million, or 19.9%, to $1,408.8 million in the three months ended March 31, 2025, from $1,175.0 million in the three months ended March 31, 2024.

The increase was primarily attributable to our Sportsbook and iGaming product offerings, which increased $201.4 million , or 18.2% , to $1,305.4 million in the three months ended March 31, 2025 , from $1,104.1 million in the three months ended March 31, 2024 , due to MUPs increasing by 26.5% , partially offset by ARPMUP decreasing by 5.3% as compared to the three months ended March 31, 2024.

The increase in MUPs was due to strong player retention and acquisition across our Sportsbook and iGaming product offerings, the expansion of our Sportsbook product offering into new jurisdictions and the Jackpocket Transaction.

The decrease in ARPMUP was due to lower ARPMUP for Jackpocket customers compared to customers for DraftKings’ existing product offerings prior to the Jackpocket Transaction, partially offset by structural improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook and iGaming.

Revenue increased by $408.1 million, or 36.9%, to $1,512.5 million in the three months ended June 30, 2025, from $1,104.4 million in the three months ended June 30, 2024.

The increase was primarily attributable to our Sportsbook and iGaming product offerings, which increased $390.1 million , or 37.6% , to $1,427.5 million in the three months ended June 30, 2025 , from $1,037.4 million in the three months ended June 30, 2024 , due to MUPs and ARPMUPs increasing by 6.5% , and 29.1%, respectively, as compared to the three months ended June 30, 2024.

The increase in MUPs was due to strong player retention and acquisition across our Sportsbook and iGaming product offerings and the Jackpocket Transaction.

The increase in ARPMUP was primarily due to higher structural Sportsbook hold percentage, sportsbook-friendly outcomes, and improved promotional reinvestment.

Cost of Revenue .

Cost of revenue increased $133.7 million , or 18.8% , to $843.8 million in the three months ended March 31, 2025 , from $710.1 million in the three months ended March 31, 2024 .

The increase was due primarily to revenue growth from our expanded product and jurisdictional footprint, including the launch of our Sportsbook product offering in North Carolina and Washington, D.C.

In particular, the cost of revenue increase was primarily attributable to an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $81.7 million and $29.1 million, respectively.

The remaining increase was primarily attributable to an increase in our variable platform costs resulting from additional customer activity and an increase in amortization of intangible assets of $18.3 million.

Cost of revenue as a percentage of revenue decreased by 0.5 percentage points to 59.9% in the three months ended March 31, 2025 , as compared to 60.4% in the three months ended March 31, 2024 , reflecting, in part, structural improvement in our Sportsbook hold rate, an improved Sportsbook Net Revenue Margin, and improved promotional reinvestment for our Sportsbook product offering, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our DFS product offering.

Cost of revenue increased $191.1 million , or 28.8% , to $854.6 million in the three months ended June 30, 2025 , from $663.4 million in the three months ended June 30, 2024 .

The increase was primarily due to our revenue growth and an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $142.1 million and $20.7 million, respectively.

The remaining increase was primarily attributable to an increase of $15.5 million in our variable platform costs resulting from additional customer activity and an increase in amortization of intangible assets of $4.5 million.

Cost of revenue as a percentage of revenue decreased by 3.6 percentage points to 56.5% in the three months ended June 30, 2025 , as compared to 60.1% in the three months ended June 30, 2024 , reflecting, in part, structural improvement in our Sportsbook hold rate, an improved Sportsbook Net Revenue Margin, and improved promotional reinvestment for our Sportsbook product offering, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our DFS product offering.

Sales and Marketing.

Sales and marketing expense increased $3.0 million, or 0.9%, to $343.7 million in the three months ended March 31, 2025, from $340.7 million in the three months ended March 31, 2024.

The increase was primarily attributable to higher stock-based compensation expense.

Sales and marketing expense increased $17.5 million, or 8.1%, to $233.2 million in the three months ended June 30, 2025, from $215.7 million in the three months ended June 30, 2024.

The increase was primarily attributable to higher external marketing costs.

Product and Technology.

Product and technology expense increased $14.4 million, or 16.3%, to $103.3 million in the three months ended March 31, 2025, from $88.8 million in the three months ended March 31, 2024 due to increased headcount in our product and engineering departments.

Product and technology expense increased $15.8 million, or 17.0%, to $108.4 million in the three months ended June 30, 2025, from $92.7 million in the three months ended June 30, 2024 due to increased headcount in our product and engineering departments.

General and Administrative.

General and administrative expense decreased $9.9 million, or 5.7%, to $164.4 million in the three months ended March 31, 2025, from $174.3 million in the three months ended March 31, 2024.

This decrease was primarily driven by a decrease in non-core litigation expense of $9.3 million.

General and administrative expense was consistent, increasing by $0.6 million, or 0.4%, to $165.7 million in the three months ended June 30, 2025, from $165.1 million in the three months ended June 30, 2024.

Interest Income.

We recorded interest income of $9.5 million in the three months ended March 31, 2025, compared to $15.1 million in the three months ended March 31, 2024, due to fluctuations in cash balances and interest rates during the respective periods.

We recorded interest income of $12.3 million in the three months ended June 30, 2025, compared to $14.2 million in the three months ended June 30, 2024, due to fluctuations in cash balances and interest rates during the respective periods.

Interest Expense.

We recorded interest expense of $5.1 million in the three months ended March 31, 2025, compared to $0.6 million in the three months ended March 31, 2024, primarily due to interest incurred on the Term B Facility.

We recorded interest expense of $11.6 million in the three months ended June 30, 2025, compared to $0.7 million in the three months ended June 30, 2024, primarily due to interest incurred on the Term B Facility.

Gain (Loss) on Remeasurement of Warrant Liabilities.

We recorded a gain of $2.5 million on remeasurement of warrant liabilities in the three months ended March 31, 2025, compared to a loss of $18.1 million in the three months ended March 31, 2024, due to changes in the underlying share price of our Class A common stock.

We recorded a loss of $5.9 million on remeasurement of warrant liabilities in the three months ended June 30, 2025, compared to a gain of $9.8 million in the three months ended June 30, 2024, due to changes in the underlying share price of our Class A common stock.

Other Gain (Loss), net .

We recorded a nominal gain in the three months ended March 31, 2025, as compared to a loss of $0.7 million in the three months ended March 31, 2024.

We recorded a $24.5 million gain in the three months ended June 30, 2025, as compared to a loss of $0.4 million in the three months ended June 30, 2024.

The gain was primarily attributable to the revaluation of contingent consideration for the three months ended June 30, 2025.

Income Tax Provision (Benefit).

We recorded an income tax benefit of $5.6 million in the three months ended March 31, 2025 , as compared to an income tax benefit of $0.4 million in the three months ended March 31, 2024 .

We recorded income tax expense of $11.8 million in the three months ended June 30, 2025 , as compared to an income tax benefit of $73.6 million in the three months ended June 30, 2024 .

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.

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Net Income (Loss).

Net loss decreased by $108.7 million to a net loss of $33.9 million in the three months ended March 31, 2025, as compared to a net loss of $142.6 million in the three months ended March 31, 2024, for the reasons discussed above.

Net income increased by $94.1 million to a net income of $157.9 million in the three months ended June 30, 2025, as compared to a net income of $63.8 million in the three months ended June 30, 2024, for the reasons discussed above.

Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

The following table sets forth a summary of our consolidated results of operations for the interim periods indicated, and the changes between periods:

Six Months Ended June 30,

(amounts in thousands, except percentages) 2025 2024 $ Change % Change

Revenue $ 2,921,313 $ 2,279,437 $ 641,876 28.2 %

Cost of revenue 1,698,362 1,373,483 324,879 23.7 %

Sales and marketing 576,867 556,375 20,492 3.7 %

Product and technology 211,677 181,470 30,207 16.6 %

General and administrative 330,094 339,335 (9,241) (2.7) %

Income (loss) from operations 104,313 (171,226) 275,539 160.9 %

Interest income 21,794 29,279 (7,485) (25.6) %

Interest expense (16,734) (1,327) (15,407) 1,161.0 %

Gain (loss) on remeasurement of warrant liabilities (3,356) (8,303) 4,947 59.6 %

Other gain (loss), net 24,481 (1,181) 25,662 2,172.9 %

Income (loss) before income tax and equity method investments 130,498 (152,758) 283,256 185.4 %

Income tax provision (benefit) 6,190 (73,921) 80,111 108.4 %

(Gain) loss from equity method investments 236 (91) 327 359.3 %

Net income (loss) attributable to common stockholders $ 124,072 $ (78,746) $ 202,818 257.6 %

Revenue increased by $641.9 million, or 28.2%, to $2,921.3 million in the six months ended June 30, 2025, from $2,279.4 million in the six months ended June 30, 2024.

The increase was primarily attributable to our Sportsbook and iGaming product offerings, which increased $591.5 million , or 27.6% , to $2,733.0 million in the six months ended June 30, 2025 , from $2,141.5 million in the six months ended June 30, 2024 , due to MUPs and ARPMUPs increasing by 6.5% , and 10.4%, respectively, as compared to the six months ended June 30, 2024.

The increase in MUPs was due to strong player retention and

acquisition across our Sportsbook and iGaming product offerings, the expansion of our Sportsbook product offering into new jurisdictions and the Jackpocket Transaction.

The increase in ARPMUP was primarily due to higher structural Sportsbook hold percentage and improved promotional reinvestment, partially offset by customer-friendly sports outcomes in the first quarter.

Cost of Revenue .

Cost of revenue increased $324.9 million , or 23.7% , to $1,698.4 million in the six months ended June 30, 2025 , from $1,373.5 million in the six months ended June 30, 2024 .

The increase was due primarily to revenue growth and an increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $223.8 million and $49.8 million, respectively.

The remaining increase was primarily attributable to an increase of $20.2 million in our variable platform costs resulting from additional customer activity and an increase in amortization of intangible assets of $22.8 million.

Cost of revenue as a percentage of revenue decreased by 2.2 percentage points to 58.1% in the six months ended June 30, 2025 , as compared to 60.3% in the six months ended June 30, 2024 , reflecting, in part, structural improvement in our Sportsbook hold rate, an improved Sportsbook Net Revenue Margin, and improved promotional reinvestment for our Sportsbook product offering, partially offset by a change in revenue mix from our more mature DFS product offering to our Sportsbook and iGaming product offerings, which, in general, produce revenue at a higher cost per revenue dollar relative to our DFS product offering.

Sales and Marketing.

Sales and marketing expense increased $20.5 million, or 3.7%, to $576.9 million in the six months ended June 30, 2025, from $556.4 million in the six months ended June 30, 2024.

The increase was primarily attributable to higher external marketing costs.

Product and Technology.

Product and technology expense increased $30.2 million, or 16.6%, to $211.7 million in the six months ended June 30, 2025, from $181.5 million in the six months ended June 30, 2024 due to increased headcount in our product and engineering departments.

General and Administrative.

General and administrative expense decreased $9.2 million, or 2.7%, to $330.1 million in the six months ended June 30, 2025, from $339.3 million in the six months ended June 30, 2024.

The decrease was primarily due to an $11.0 million reduction in professional services expenses, largely attributable to transaction costs incurred during the three and six months ended June 30, 2024, which were not incurred during the corresponding periods in 2025.

Interest Income.

We recorded interest income of $21.8 million in the six months ended June 30, 2025, compared to $29.3 million in the six months ended June 30, 2024, due to fluctuations in cash balances and interest rates during the respective periods.

Interest Expense.

We recorded interest expense of $16.7 million in the six months ended June 30, 2025, compared to $1.3 million in the six months ended June 30, 2024, primarily due to interest incurred on the Term B Facility.

Gain (Loss) on Remeasurement of Warrant Liabilities.

We recorded a loss of $3.4 million on remeasurement of warrant liabilities in the six months ended June 30, 2025, compared to a loss of $8.3 million in the six months ended June 30, 2024, due to changes in the underlying share price of our Class A common stock.

Other Gain (Loss), net .

We recorded a $24.5 million gain in the six months ended June 30, 2025, as compared to a loss of $1.2 million in the six months ended June 30, 2024.

The gain was primarily attributable to the revaluation of contingent consideration.

Income Tax Provision (Benefit).

We recorded income tax expense of $6.2 million in the six months ended June 30, 2025 , as compared to an income tax benefit of $73.9 million in the six months ended June 30, 2024 .

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.

Net Income (Loss).

Net income increased by $202.8 million to a net income of $124.1 million in the six months ended June 30, 2025, as compared to a net loss of $78.7 million in the six months ended June 30, 2024, for the reasons discussed above.

Liquidity and Capital Resources

We had $1,119.7 million in cash and cash equivalents as of March 31, 2025 (excluding restricted cash and cash reserved for users, which we segregate on behalf of our paid users for all jurisdictions and product offerings).

We had $1,262.0 million in cash and cash equivalents as of June 30, 2025 (excluding restricted cash and cash reserved for users, which we segregate on behalf of our paid users for all jurisdictions and product offerings).

We believe our cash on hand is sufficient to meet our current working capital and capital expenditure requirements for a period of at least twelve months.

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The Capped Call Transactions are expected generally to reduce potential dilution to DraftKings Inc.’s Class A common stock upon any conversion of the Convertible Notes.

The net cost of $124.0 million incurred to enter into the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company’s consolidated balance sheet.

As of March 31, 2025, the Convertible Notes, net of issuance costs, balance was $1,257.1 million.

The net cost of $124.0 million incurred to enter into the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company’s condensed consolidated balance sheets.

As of June 30, 2025, the Convertible Notes, net of issuance costs, balance was $1,257.8 million.

Revolving Credit Facility.

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The Revolving Credit Facility provides for revolving loans, swing line borrowings and letters of credit and has a maturity date of November 7, 2029.

As of March 31, 2025, $10.0 million in letters of credit were issued under the Credit Agreement, with $490.0 million available for borrowing.

As of June 30, 2025, $10.0 million in letters of credit were issued under the Revolving Credit Facility, with $490.0 million available for borrowing.

In March 2025, we and certain of our subsidiaries entered into a first amendment to the Credit Agreement, which provides for a new class of incremental term loans under the Credit Agreement in an aggregate principal amount of $600.0 million (the “Term B Facility” and, such term loans, the “Term B Loan”).

The Term B Facility requires principal payments in the amount of 1.00% per annum of the original aggregate principal amount of the Term B Loan payable in quarterly installments.

of 0.75% per annum (with each of the capitalized terms used in clauses (i) and (ii) as defined in the Credit Agreement).

As of March 31, 2025, there were $600.0 million aggregate principal amount of Term B Loan outstanding.

Term B Loan bear interest at the Company’s election at either (i) in the case of Term SOFR Loans, Term SOFR plus an applicable margin of 1.75% per annum, or (ii) in the case of ABR Term Loans, ABR plus an applicable margin of 0.75% per annum (with each of the capitalized terms used in clauses (i) and (ii) as defined in the Credit Agreement).

As of June 30, 2025, there was $600.0 million in aggregate principal amount of Term B Loan outstanding.

Other Purchase Obligations .

We have certain non-cancelable contracts with vendors, licensors and others requiring us to make future cash payments.

As of March 31, 2025, these purchase obligations were $839.9 million, with $317.8 million payable in the remainder of 2025.

As of June 30, 2025, these purchase obligations were $794.9 million, with $219.6 million payable in the remainder of 2025.

Stock Repurchase Program.

On July 30, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $1.0 billion of our Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws.

The Company repurchased 3.7 million shares for $142.3 million during the three months ended March 31, 2025.

As of March 31, 2025, we have purchased 4.8 million shares of Class A common stock since the inception of the stock repurchase program.

We repurchased 2.9 million shares for $100.5 million during the three months ended June 30, 2025 and 6.5 million shares and $242.7 million for the six months ended June 30, 2025.

As of June 30, 2025, we have purchased 7.7 million shares of Class A common stock for $290.8 million since the inception of the stock repurchase program.

The following table summarizes our cash flows for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

(amounts in thousands) 2025 2024

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Operating Activities .

Net cash used in operating activities in the three months ended March 31, 2025 was $119.0 million, compared to $70.4 million used in operating activities in the three months ended March 31, 2024, primarily from $141.7 million of cash used from changes in operating assets and liabilities from timing differences, offset by an improvement in net loss, net of non-cash items , of $93.1 million.

Net cash provided by operating activities in the six months ended June 30, 2025 was $54.9 million, compared to $41.0 million used in operating activities in the six months ended June 30, 2024, primarily from an improvement in net income, net of non-cash items , of $262.5 million for reasons discussed in Results of Operations above, offset by $166.6 million of cash used from changes in operating assets and liabilities, primarily related to a larger reduction in liabilities to users, due to timing of player activity, and a larger reduction in accounts payable due to timing of vendor payments.

Investing Activities.

Net cash used in investing activities during the three months ended March 31, 2025 increased by $0.2 million to $39.0 million, compared to $39.2 million in the three months ended March 31, 2024, primarily due to a decrease of $10.0 million in cash paid for gaming licenses, offset by an increase of $8.6 million in cash paid for internally developed software costs .

Net cash used in investing activities during the six months ended June 30, 2025 decreased by $382.3 million to $74.3 million, compared to $456.5 million in the six months ended June 30, 2024, primarily due to a decrease of $392.0 million in cash paid for acquisitions, net of cash required, and a decrease of $10.5 million in cash paid for gaming licenses, offset by an increase of $16.3 million in cash paid for internally developed software costs .

Financing Activities.

Net cash provided by (used in) financing activities during the three months ended March 31, 2025 increased by $403.5 million to $372.8 million, compared to $30.6 million used in the three months ended March 31, 2024, primarily driven by $588.1 million of cash received from entering into the Term B Facility, partially offset by $142.3 million in treasury stock purchases under the Stock Repurchase Program, and an increase of $40.8 million of RSU withhol ding activity relating to tax obligations upon vesting of restricted stock units.

Net cash provided by financing activities during the six months ended June 30, 2025 increased by $305.6 million to $253.1 million, compared to $52.5 million used in the six months ended June 30, 2024, primarily driven by $588.1 million of cash received from borrowing under the Term B Facility, partially offset by $242.7 million in treasury stock purchases under the Stock Repurchase Program, and an increase of $43.9 million of RSU withhol ding activity relating to tax obligations upon vesting of restricted stock units.

Commitments and Contingencies

Refer to Note 13 of our unaudited condensed consolidated financial statements included elsewhere in this Report for a summary of our commitments as of March 31, 2025.

Refer to “Note 13 — Commitments and Contingencies” of our unaudited condensed consolidated financial statements included elsewhere in this Report for a summary of our commitments and contingencies as of June 30, 2025.

Critical Accounting Estimates

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Actual results could differ materially from these estimates.

During the three months ended March 31, 2025, there were no changes to the critical accounting estimates discussed in the 2024 Annual Report.

During the six months ended June 30, 2025, there were no changes to the critical accounting estimates discussed in the 2024 Annual Report.

Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in our exposure to market risk during the three months ended March 31, 2025.

There have been no significant changes in our exposure to market risk during the six months ended June 30, 2025.

Refer to Item 7A.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis