What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-07 · 110 added, 114 removed, 249 unchanged (47% of the section changed)

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

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

Three Months Ended September 30, Nine Months Ended September 30,

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

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(126,488) (58,504) 276,785 91,853

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)

Basic and Diluted Earnings (Loss) Per Share (0.52) (0.60) (0.27) (0.78)

Adjusted Earnings (Loss) Per Share (2)

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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 $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”).

Key Performance Indicators

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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 and six months ended June 30, 2024 and 2025:

The charts below present our average MUPs for the three and nine months ended September 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 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.

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

MUPs increased 1.5% in the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

MUPs increased 0.4 million or 11.8% in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily reflecting strong unique payer retention and acquisition across our Sportsbook and iGaming product offer ings, and the impact of the Jackpocket Transaction.

Exc luding the impact of the Jackpocket Transaction, MUPs in creased by 0.2 million or 7.4% in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

ARPMUP increased by $3 or 3.0% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to increased revenue in iGaming as well as structural improvement in our Sportsbook hold percentage, partially offset by customer-friendly sports outcomes .

ARPMUP increased $9 or 8.1% f or the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, due to increased handle and improvement in our Sportsbook hold percentage.

Excluding the impact of the Jackpocket Transaction, ARPMUP in creased by $14 or 11.8% in the nine months ended September 30, 2025 compared to the nine months ended September 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 and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,

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

Three Months Ended September 30,

(amounts in thousands) 2025 2024 $ Change % Change

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Total Revenue $ 1,144,019 $ 1,095,490 $ 48,529 4.4 %

Six Months Ended June 30,

Nine Months Ended September 30,

(amounts in thousands) 2025 2024 $ Change % Change

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Total Revenue $ 4,065,332 $ 3,374,927 $ 690,405 20.5 %

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 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 $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.

We consummated the Jackpocket Transaction on May 22, 2024.

Sportsbook Handle increased by $1.0 billion, or 10.0%, to $11.4 billion in the three months ended September 30, 2025, from $10.4 billion in the three months ended September 30, 2024, reflecting strong customer acquisition and continued strength in existing user engagement.

Sportsbook Handle increased by $3.6 billion, or 10.9%, to $36.8 billion in the nine months ended September 30, 2025, from $33.2 billion in the nine months ended September 30, 2024, primarily due to an increase in MUPs .

Sportsbook Net Revenue Margin decreased by 1.1 percentage points, to 5.2% in the three months ended September 30, 2025, from 6.3% in the three months ended September 30, 2024, primarily driven by customer-friendly sports outcomes.

Sportsbook Net Revenue Margin increased by 0.4 percentage points, to 6.7% in the nine months ended September 30, 2025, from 6.3% in the nine months ended September 30, 2024, primarily driven by higher structural hold percentage and improved promotional reinvestment, partially offset by customer-friendly sports outcomes in the first and third quarters.

iGaming revenue increased $89.8 million , or 24.9% , to $451.3 million in the three months ended September 30, 2025, from $361.5 million in the three months ended September 30, 2024, and increased by $222.4 million, or 20.6%, to $1,304.4 million in the nine months ended September 30, 2025, from $1,082.0 million in the nine months ended September 30, 2024.

The increase is primarily due to an increase in iGaming customers.

Other revenue increased $19.5 million, or 25.3% , to $96.6 million in the three months ended September 30, 2025, from $77.1 million in the three months ended September 30, 2024, primarily due to interest income on customer deposits.

Other revenue increased $69.9 million, or 32.5%, to $285.0 million in the nine months ended September 30, 2025, from $215.1 million in the nine months ended September 30, 2024, primarily due to interest income on customer deposits and revenue from our digital lottery courier product offering.

Non-GAAP Information

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 substitutes 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.

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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 diluted 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 basic earnings (loss) per share attributable to common stockholders before the impact of amortization of acquired intangible assets;

stock-based compensation;

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GAAP, for the periods indicated:

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

Three Months Ended September 30, Nine Months Ended September 30,

(amounts in thousands) 2025 2024 2025 2024

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66,071 89,952 201,486 204,755

Interest income (12,305) (14,212) (21,794) (29,279)

Interest expense 11,640 678 16,734 1,327

Interest expense (income), net 19,573 (8,328) 14,513 (36,280)

Income tax provision (benefit) (12,065) (1,287) (5,875) (75,208)

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Advocacy and other related legal expenses (5)

— 6,018 — 6,303

(Gain) loss on remeasurement of warrant liabilities (4,233) (21) (877) 8,282

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Adjusted EBITDA $ (126,488) $ (58,504) $ 276,785 $ 91,853

(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.

(1) The amounts include the amortization of acquired intangible assets of $33.9 million and $55.5 million for the three months ended September 30, 2025 and 2024, respectively, and $113.0 million and $121.2 million for the nine months ended September 30, 2025 and 2024, respectively.

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

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(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.

This adjustment excludes (i) costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate that are incurred in the ordinary course of business and (ii) costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate.

(6) Primarily includes the change in fair value of certain financial assets, as well as our equity method share of investee’s losses and other costs relating to non-recurring and non-operating items.

(6) Primarily includes the change in fair value of certain assets and liabilities, including contingent consideration, as well as our equity method share of investee’s gains and losses and other costs relating to non-recurring and non-operating items.

For the three and nine months ended September 30, 2024, this amount also includes $27.8 million in expense related to the discontinuance of our Reignmakers product offering, $7.5 million in expenses related to the termination of a market access agreement, and a $5.8 million loss on the sale of Vegas Sports Information Network, LLC.

For the nine month period ended September 30, 2024, these costs are offset by $20.9 million related to gaming tax credits as a result of audits and appeals related to prior periods.

Adjusted Earnings (Loss) Per Share

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.

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 U.S.

GAAP, for the periods indicated:

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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

Basic earnings (loss) per share attributable to common stockholders $ (0.52) $ (0.60) $ (0.27) $ (0.78)

Adjusted for:

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Discrete tax benefit attributed to the acquisition of Jackpocket Inc.

— (0.15) — (0.16)

Stock-based compensation (3)

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Advocacy and other related legal expenses (6)

— 0.01 — 0.01

(Gain) loss on remeasurement of warrant liabilities (0.01) 0.00 0.00 0.02

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_____________

* 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;

* Weighted average number of shares used to calculate Adjusted Earnings (Loss) Per Share for the three months ended September 30, 2025 and 2024 was 496.6 million and 486.2 million, respectively, and 495.5 million and 480.0 million for the nine months ended September 30, 2025 and 2024, respectively;

totals may not add due to rounding.

(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.

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(7) Beginning in the first quarter of the 2025, the Company began applying an estimated non-GAAP effective tax rate of 25%.

The non-GAAP effective tax rate reflects the non-GAAP tax provision commensurate with the Company’s level of non-GAAP profitability, which was determined after adjusting for the non-GAAP adjustments presented above and excluding the impact of changes in the valuation allowance.

(7) Beginning in the first quarter of 2025, the Company began applying an estimated non-GAAP effective tax rate, which is 23% as of the third quarter of 2025.

The non-GAAP effective tax rate reflects the non-GAAP tax provision commensurate

with the Company’s level of non-GAAP profitability, which was determined after adjusting for the non-GAAP adjustments presented above and excluding the impact of changes in the valuation allowance.

Results of Operations

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

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

Three Months Ended September 30,

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

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Income (loss) from operations (271,890) (298,594) 26,704 8.9 %

Interest income 12,305 14,212 (1,907) (13.4) %

Interest expense (11,640) (678) (10,962) 1,616.8 %

Gain (loss) on remeasurement of warrant liabilities (5,851) 9,791 (15,642) 159.8 %

Other gain (loss), net 24,459 (446) 24,905 5,584.1 %

Interest income (expense), net (19,573) 8,328 (27,901) (335.0) %

Gain (loss) on remeasurement of warrant liabilities 4,233 21 4,212 n.m.

Other gain (loss), net 16,720 (4,620) 21,340 n.m.

Income (loss) before income tax and equity method investments (270,510) (294,865) 24,355 8.3 %

Income tax provision (benefit) (12,065) (1,287) (10,778) 837.5 %

(Gain) loss from equity method investments 191 239 (48) 20.1 %

(Gain) loss from equity method investments (1,657) 110 (1,767) n.m.

Net income (loss) attributable to common stockholders $ (256,788) $ (293,688) $ 36,900 12.6 %

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.

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Revenue increased by $48.5 million, or 4.4%, to $1,144.0 million in the three months ended September 30, 2025, from $1,095.5 million in the three months ended September 30, 2024.

The increase was primarily attributable to our iGaming product offering, which increased $89.8 million , or 24.9% , due to increased handle and improved promotional reinvestment, offset by our Sportsbook offering which decreased $60.8 million, or 9.3%, primarily due to customer-friendly sports outcomes.

Cost of Revenue .

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.

Cost of revenue increased $41.6 million , or 5.6% , to $784.1 million in the three months ended September 30, 2025 , from $742.4 million in the three months ended September 30, 2024 .

The increase was primarily due to our revenue growth and a resulting increase in our variable expenses, such as gaming taxes and payment processing fees, which increased $58.4 million and $5.1 million, respectively.

These increases were partially offset by a decrease in amortization of intangible assets of $24.1 million.

Cost of revenue as a percentage of revenue increased by 0.8 percentage points to 68.5% in the three months ended September 30, 2025 , as compared to 67.8% in the three months ended September 30, 2024 , primarily attributable to higher gaming tax rates in certain states.

Sales and Marketing.

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.

Sales and marketing expense increased $20.4 million, or 6.0%, to $360.4 million in the three months ended September 30, 2025, from $339.9 million in the three months ended September 30, 2024, primarily attributable to higher external marketing costs.

Product and Technology.

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.

Product and technology expense increased $11.1 million, or 10.7%, to $114.7 million in the three months ended September 30, 2025, from $103.6 million in the three months ended September 30, 2024, due to increased headcount in our product and engineering departments.

General and Administrative.

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 $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 $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.

General and administrative expense decreased by $51.3 million, or 24.7%, to $156.8 million in the three months ended September 30, 2025, from $208.1 million in the three months ended September 30, 2024.

The decrease was primarily driven by higher expenses recognized in the prior year, including $27.8 million related to the discontinuance of our Reignmakers product offering, lower stock-based compensation expense of $10.8 million, and reduced non-ordinary course litigation, settlement, and related costs of $20.4 million.

Interest Income (Expense), net.

We recorded net interest expense of $19.6 million in the three months ended September 30, 2025, compared to $8.3 million of net interest income in the three months ended September 30, 2024.

This fluctuation was due to the inclusion of interest income on customer deposits in revenue rather than in interest income, as well as increased interest expense from the Term B Loan, which was entered into in the first quarter of 2025.

Gain (Loss) on Remeasurement of Warrant Liabilities.

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.

We recorded a gain of $4.2 million on remeasurement of warrant liabilities in the three months ended September 30, 2025, compared to a nominal gain in the three months ended September 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 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.

We recorded a net gain of $16.7 million in the three months ended September 30, 2025, as compared to a net loss of $4.6 million in the three months ended September 30, 2024.

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

Income Tax Provision (Benefit).

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 .

We recorded an income tax benefit of $12.1 million in the three months ended September 30, 2025 , as compared to an income tax benefit of $1.3 million in the three months ended September 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 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

Net loss decreased by $36.9 million to a net loss of $256.8 million in the three months ended September 30, 2025, as compared to a net loss of $293.7 million in the three months ended September 30, 2024, for the reasons discussed above.

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 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,

Nine Months Ended September 30,

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

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Income (loss) from operations (167,577) (469,820) 302,243 64.3 %

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 %

Interest income (expense), net (14,513) 36,280 (50,793) (140.0) %

Gain (loss) on remeasurement of warrant liabilities 877 (8,282) 9,159 n.m.

Other gain (loss), net 41,201 (5,801) 47,002 n.m.

Income (loss) before income tax and equity method investments (140,012) (447,623) 307,611 68.7 %

Income tax provision (benefit) (5,875) (75,208) 69,333 (92.2) %

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

(Gain) loss from equity method investments (1,421) 19 (1,440) n.m.

Net income (loss) attributable to common stockholders $ (132,716) $ (372,434) $ 239,718 64.4 %

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.

= not meaningful

Revenue increased by $690.4 million, or 20.5%, to $4,065.3 million in the nine months ended September 30, 2025, from $3,374.9 million in the nine months ended September 30, 2024.

The increase was primarily attributable to our Sportsbook and iGaming product offerings, which increased $620.5 million , or 19.6% , to $3,780.4 million in the nine months ended September 30, 2025 , from $3,159.9 million in the nine months ended September 30, 2024 , due to MUPs and ARPMUPs increasing by 11.8% and 8.1%, respectively, as compared to the nine months ended September 30, 2024.

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

The increase in ARPMUP was primarily due to higher Sportsbook hold percentage and improved promotional reinvestment, partially offset by customer-friendly sports outcomes in the first and third quarters of 2025.

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.

Cost of revenue increased $366.5 million , or 17.3% , to $2,482.4 million in the nine months ended September 30, 2025 , from $2,115.9 million in the nine months ended September 30, 2024 .

The increase was due to revenue

growth and a resulting increase in our variable expenses, primarily gaming taxes and payment processing fees, which increased $282.3 million and $54.9 million, respectively.

Cost of revenue as a percentage of revenue decreased by 1.6 percentage points to 61.1% in the nine months ended September 30, 2025 , as compared to 62.7% in the nine months ended September 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 higher gaming tax rate in certain states, including Illinois.

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.

Sales and marketing expense increased $40.9 million, or 4.6%, to $937.2 million in the nine months ended September 30, 2025, from $896.3 million in the nine months ended September 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.

Product and technology expense increased $41.3 million, or 14.5%, to $326.4 million in the nine months ended September 30, 2025, from $285.1 million in the nine months ended September 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.

General and administrative expense decreased $60.6 million, or 11.1%, to $486.9 million in the nine months ended September 30, 2025, from $547.5 million in the nine months ended September 30, 2024.

The decrease was primarily driven by the non-recurrence of higher expenses recognized in the prior year, including $27.8 million related to the discontinuance of our Reignmakers product offering, a $40.6 million reduction in non-ordinary course litigation, settlement, and related costs, and a $17.5 million reduction in transaction-related costs.

Interest Income (Expense), net.

We recorded net interest expense of $14.5 million in the nine months ended September 30, 2025, compared to $36.3 million of net interest income in the nine months ended September 30, 2024, due to fluctuations in cash balances and interest rates during the respective periods, the inclusion of interest income on customer deposits in revenue rather than in interest income, and increased interest expense from the Term B Loan, which was entered into in the first quarter of 2025.

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.

We recorded a gain of $0.9 million on remeasurement of warrant liabilities in the nine months ended September 30, 2025, compared to a loss of $8.3 million in the nine months ended September 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.

We recorded a $41.2 million gain in the nine months ended September 30, 2025, as compared to a loss of $5.8 million in the nine months ended September 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 .

We recorded an income tax benefit of $5.9 million in the nine months ended September 30, 2025 , as compared to an income tax benefit of $75.2 million in the nine months ended September 30, 2024 .

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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.

Net loss decreased by $239.7 million to a net loss of $132.7 million in the nine months ended September 30, 2025, as compared to a net loss of $372.4 million in the nine months ended September 30, 2024, for the reasons discussed above.

Liquidity and Capital Resources

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 had $1,228.3 million in cash and cash equivalents as of September 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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In connection with the pricing of the Convertible Notes and the exercise of the option to purchase additional Convertible Notes, we entered into privately negotiated capped call transactions (the “Capped Call Transactions”).

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.

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 condensed consolidated balance sheets.

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

As of September 30, 2025, the Convertible Notes, net of issuance costs, balance was $1,258.4 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 June 30, 2025, $10.0 million in letters of credit were issued under the Revolving Credit Facility, with $490.0 million available for borrowing.

As of September 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.

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.

The Term B Loan bears 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 September 30, 2025, there was $597.0 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 June 30, 2025, these purchase obligations were $794.9 million, with $219.6 million payable in the remainder of 2025.

As of September 30, 2025, these purchase obligations were $2.1 billion, with $0.2 billion payable in the remainder of 2025.

This includes $1.3 billion of expected contractual obligations over the next five years as part of multi-year content integration agreements signed with three media distribution counterparties in the three month period ended September 30, 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.

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.

We repurchased 1.6 million shares for $71.2 million during the three months ended September 30, 2025 and 8.2 million shares and $314.0 million for the nine months ended September 30, 2025.

As of September 30, 2025, we have purchased 9.3 million shares of Class A common stock for $362.0 million since the inception of the stock repurchase program.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(amounts in thousands) 2025 2024

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Operating Activities .

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.

Net cash provided by operating activities in the nine months ended September 30, 2025 was $342.4 million, compared to $92.6 million provided by operating activities in the nine months ended September 30, 2024, primarily from an improvement in net income (loss), net of non-cash items , of $223.9 million for reasons discussed in Results of Operations above, in addition to $25.9 million of cash provided from changes in operating assets and liabilities, primarily related to timing of player activity, impacting receivables reserved for users and liabilities to users, as well as timing of vendor payments.

Investing Activities.

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 .

Net cash used in investing activities during the nine months ended September 30, 2025 decreased by $372.1 million to $116.1 million, compared to $488.2 million in the nine months ended September 30, 2024, primarily due to a decrease of $392.5 million in cash paid for acquisitions, net of cash acquired, and a decrease of $10.5 million in cash paid for

gaming market access and licenses, offset by an increase of $22.4 million in cash paid for internally developed software costs, an increase of $3.2 million in cash paid for purchases of property plant and equipment, and an increase of $5.3 million in cash paid for other investing activities .

Financing Activities.

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.

Net cash provided by financing activities during the nine months ended September 30, 2025 increased by $223.1 million to $151.7 million, compared to $71.4 million used in the nine months ended September 30, 2024, primarily driven by $588.1 million of cash received from borrowing under the Term B Facility, partially offset by $314.0 million in treasury stock purchases under the Stock Repurchase Program, and an increase of $55.3 million in cash paid for purchases of treasury stock for RSU withhol ding.

Commitments and Contingencies

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

During the nine months ended September 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 six months ended June 30, 2025.

There have been no significant changes in our exposure to market risk during the nine months ended September 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