10-Q – 2025-11-07 – dkng-20250930.htm

Key Performance Indicators 
Monthly Unique Payers (“MUPs”). We define MUPs as the number of unique paid users per month who had one or more real-money, paid engagements across one or more of our Sportsbook, iGaming, DFS, digital lottery courier or other offerings via our technology. For reported periods longer than one month, we average the MUPs for the months in the reported period. Although the number of unique paid users includes those users that have participated in a real-money, paid engagement using only promotional incentives (which has not been a material number of users to date), which are fungible with other funds deposited into their wallets on our technology, it does not include users who have made a deposit but have not yet had a real-money, paid engagement.
MUPs is a key indicator of the scale of our online gaming user base and awareness of our brand. We believe that year-over-year growth in MUPs is also generally indicative of the long-term revenue growth potential of our online gaming product offerings, although MUPs in individual periods may be less indicative of our longer-term expectations. 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 nine months ended September 30, 2024 and 2025:

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Average Revenue per MUP (“ARPMUP”). We define and calculate ARPMUP as the average monthly revenue, excluding revenue from gaming software services, for a reporting period, divided by the average number of MUPs for the same period. 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 nine months ended September 30, 2024 and 2025:

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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. We define Sportsbook Handle as the total amount of settled customer wagers on our Sportsbook product offering. Sportsbook Handle provides useful information to investors and management as it is a key indicator of volume and customer engagement on our Sportsbook product offering that is not impacted by variability of sport outcomes and provides important insight into underlying growth trends. We do not utilize handle information to track performance of our iGaming products because iGaming is generally not subject to the same variability in outcomes.

Sportsbook Net Revenue Margin. We define Sportsbook Net Revenue Margin as Sportsbook revenue as a percentage of Sportsbook Handle. 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.

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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
Sportsbook Handle $ 11,402,405 $ 10,365,068 $ 1,037,337 10.0  %
Sportsbook Revenue 596,119 656,920 (60,801) (9.3) %
Sportsbook Net Revenue Margin 5.2% 6.3% N/A N/A

Sportsbook Revenue $ 596,119 $ 656,920 $ (60,801) (9.3) %
iGaming Revenue 451,300 361,460 89,840 24.9  %
Other Revenue 96,600 77,110 19,490 25.3  %
Total Revenue $ 1,144,019   $ 1,095,490   $ 48,529   4.4   %

Nine Months Ended September 30,
(amounts in thousands) 2025 2024 $ Change % Change
Sportsbook Handle $ 36,757,637 $ 33,159,506 $ 3,598,131  10.9  %
Sportsbook Revenue 2,475,948 2,077,863 398,085 19.2  %
Sportsbook Net Revenue Margin 6.7  % 6.3  % N/A N/A

Sportsbook Revenue $ 2,475,948 $ 2,077,863 $ 398,085  19.2  %
iGaming Revenue 1,304,431 1,082,009 222,422  20.6  %
Other Revenue 284,953 215,055 69,898  32.5  %
Total Revenue $ 4,065,332 $ 3,374,927 $ 690,405   20.5   %

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. GAAP. 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
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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 or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; 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; stock-based compensation; transaction-related costs; litigation, settlement and related costs; advocacy and other related legal expenses; gain or loss on remeasurement of warrant liabilities; 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. 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
The table below presents our Adjusted EBITDA reconciled to our net income (loss), which is the most directly comparable financial measure calculated in accordance with U.S. GAAP, for the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,
(amounts in thousands) 2025 2024 2025 2024
Net income (loss) $ (256,788) $ (293,688) $ (132,716) $ (372,434)
Adjusted for:
Depreciation and amortization (1)
66,071  89,952  201,486  204,755 
Interest expense (income), net 19,573  (8,328) 14,513  (36,280)
Income tax provision (benefit) (12,065) (1,287) (5,875) (75,208)
Stock-based compensation (2)
72,473  87,552  236,020  271,307 
Transaction-related costs (3)
6,860  840  6,860  24,333 
Litigation, settlement, and related costs (4)
—  20,448  —  40,572 
Advocacy and other related legal expenses (5)
—  6,018  —  6,303 
(Gain) loss on remeasurement of warrant liabilities (4,233) (21) (877) 8,282 
Other non-recurring costs and non-operating (income) costs (6)
(18,379) 40,010  (42,626) 20,223 
Adjusted EBITDA $ (126,488) $ (58,504) $ 276,785   $ 91,853  

(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.
(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 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
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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 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 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 September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Basic earnings (loss) per share attributable to common stockholders $ (0.52) $ (0.60) $ (0.27) $ (0.78)
Adjusted for:
Amortization of acquired intangible assets (1)
0.07  0.11  0.23  0.25 
Discrete tax benefit attributed to the acquisition of Jackpocket Inc. (2)
—  —  —  (0.16)
Stock-based compensation (3)
0.15  0.18  0.48  0.57 
Transaction-related costs (4)
0.01  0.00  0.01  0.05 
Litigation, settlement, and related costs (5)
—  0.04  —  0.08 
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 
Other non-recurring and non-operating costs (income) (0.03) 0.08  (0.08) 0.04 
Tax impact of adjusting items (7)
0.07  —   (0.09) —  
Adjusted Earnings (Loss) Per Share* $ (0.26) $ (0.17) $ 0.27   $ 0.09  

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*     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.

(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) 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.
(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. 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.
(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
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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 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 September 30,
(amounts in thousands, except percentages) 2025 2024 $ Change % Change
Revenue $ 1,144,019   $ 1,095,490   $ 48,529   4.4   %
Cost of revenue 784,079  742,434  41,645  5.6  %
Sales and marketing 360,370  339,943  20,427  6.0  %
Product and technology 114,680  103,581  11,099  10.7  %
General and administrative 156,780  208,126  (51,346) (24.7) %
Income (loss) from operations (271,890) (298,594) 26,704   8.9   %
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 (1,657) 110  (1,767) n.m.
Net income (loss) attributable to common stockholders $ (256,788) $ (293,688) $ 36,900   12.6   %
n.m. = not meaningful
Revenu e. 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 $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 $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 $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 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.

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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 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 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 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. 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 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:

Nine Months Ended September 30,
(amounts in thousands, except percentages) 2025 2024 $ Change % Change
Revenue $ 4,065,332   $ 3,374,927   $ 690,405   20.5   %
Cost of revenue 2,482,441  2,115,917  366,524  17.3  %
Sales and marketing 937,237  896,318  40,919  4.6  %
Product and technology 326,357  285,051  41,306  14.5  %
General and administrative 486,874  547,461  (60,587) (11.1) %
Income (loss) from operations (167,577) (469,820) 302,243   64.3   %
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 (1,421) 19  (1,440) n.m.
Net income (loss) attributable to common stockholders $ (132,716) $ (372,434) $ 239,718   64.4   %
n.m. = not meaningful

Revenu e. 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 $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
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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 $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 $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 $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 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 $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 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 . 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. 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 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 $1,228.3 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. We will continue to evaluate our long-term operating performance and cash needs and believe we are well positioned to continue to fund the operations of our business long-term.
Debt. In March 2021, we issued zero-coupon convertible senior notes in an aggregate principal amount of $1,265.0 million (the “Convertible Notes”). The Convertible Notes mature on March 15, 2028, subject to earlier conversion, redemption or repurchase. 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
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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 September 30, 2025, the Convertible Notes, net of issuance costs, balance was $1,258.4 million.
Revolving Credit Facility. In November 2024, we and certain of our subsidiaries entered into a credit agreement (the “Credit Agreement”) with various financial institutions, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, providing for a senior secured revolving credit facility of up to $500.0 million (the “Revolving Credit Facility”). 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 September 30, 2025, $10.0 million in letters of credit were issued under the Revolving Credit Facility, with $490.0 million available for borrowing.

Term Loan . 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. 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 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 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.

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

Nine Months Ended September 30,
(amounts in thousands) 2025 2024
Net cash provided by (used in) operating activities $ 342,382  $ 92,578 
Net cash provided by (used in) investing activities (116,109) (488,184)
Net cash provided by (used in) financing activities 151,721  (71,372)
Net increase (decrease) in cash and cash equivalents, restricted cash, and cash reserved for users 377,994  (466,978)
Cash and cash equivalents, restricted cash, and cash reserved for users at beginning of period 1,330,193  1,623,493 
Cash and cash equivalents, restricted cash, and cash reserved for users at end of period $ 1,708,187   $ 1,156,515  

Operating Activities . 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 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
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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 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 September 30, 2025.

Critical Accounting Estimates
Our consolidated financial statements have been prepared in accordance with U.S. GAAP. Our discussion and analysis of the financial condition and results of operations are based on these financial statements. The preparation of these financial statements requires the application of accounting policies in addition to certain estimates and judgments by our management. Our estimates and judgments are based on currently available information, historical results and other assumptions we believe are reasonable. Actual results could differ materially from these estimates.
During the nine months ended September 30, 2025, there were no changes to the critical accounting estimates discussed in the 2024 Annual Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no significant changes in our exposure to market risk during the nine months ended September 30, 2025. Refer to Item 7A. Quantitative and Qualitative Disclosures about Market Risk in the 2024 Annual Report.

Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Report.

Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures
Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, as specified above. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.
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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.
The information required by this item is included in “Note 13 — Commitments and Contingencies” to the unaudited condensed consolidated financial statements, which is incorporated herein by reference.

Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Report are any of the risks described in the 2024 Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
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. On November 6, 2025, our Board of Directors approved a $1.0 billion increase to our existing stock repurchase authorization, which brings the aggregate share repurchase authorization to $2.0 billion of our Class A common stock. Our stock repurchase authorization does not have an expiration date and the pace of our repurchase activity will depend on factors such as our working capital needs, our debt repayment obligations or repurchases of our debt, our stock price, and economic and market conditions. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.

The table below provides information with respect to repurchases of shares of our Class A common stock during the three months ended September 30, 2025:

Total Number of Shares Purchased (1)
Average Price Paid per Share (2)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(in thousands)

July 1, 2025 to July 31, 2025 63,088 $ 40.56  63,088 $ 706,632 
August 1, 2025 to August 31, 2025 286,570 $ 42.95  286,570 $ 694,319 
September 1, 2025 to September 30, 2025 1,290,200 $ 43.65  1,290,200 $ 637,980 
Total 1,639,858   1,639,858  

(1) The total number of shares purchased excludes any shares withheld to satisfy tax withholding obligations in connection with the vesting of employee restricted stock units (“RSUs”).
(2) Average price paid per share excludes broker commissions and excise tax.

Item 3. Defaults Upon Senior Securities.
None.

Item 4. Mine Safety Disclosures.
Not applicable.

Item 5. Other Information.
Securities Trading Plans of Directors and Executive Officers
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Certain of our directors and executive officers have made, and may from time to time enter into trading plans or make elections to have shares sold or withheld to cover withholding taxes or pay the exercise price of options, which may be designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).

On September 9, 2025 , Matthew Kalish, our President, DraftKings North America and a member of our Board of Directors , entered into a trading agreement designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange act (the “Kalish 10b5-1 Plan”). The Kalish 10b5-1 Plan provides for the sale of up to 1,260,000 shares of the Company's Class A common stock and terminates on March 3, 2026 , or earlier if all transactions under such trading agreement are completed.

Matthew Kalish Transition
On November 6, 2025, Mr. Kalish and the Company mutually agreed that Mr. Kalish will transition out of his role as President, DraftKings North America, effective as of March 31, 2026 (the “Transition Date”). In connection with Mr. Kalish’s transition, the Company entered into a Transition Agreement with Mr. Kalish, pursuant to which Mr. Kalish will step down from all other roles as an officer or employee of the Company and any of its subsidiaries, effective as of the Transition Date. Mr. Kalish will remain a director on the Board of Directors of the Company after the Transition Date.

In recognition of, among other things, Mr. Kalish’s 14 years of service as a co-founder of the Company, subject to the terms and conditions of the Transition Agreement, (i) the performance-based restricted stock units (“PSUs”) that were granted in November 2022 and February 2023 with respect to performance in calendar year 2026 will accelerate and vest as of December 10, 2025 (the “Accelerated Vesting Date”), with performance deemed to be achieved at the maximum performance level (200%), (ii) outstanding time-based RSUs will continue vesting, under their original terms, through the last scheduled March 1, 2026 vesting date, (iii) PSUs that were granted in February 2024 with respect to performance in calendar year 2025 will continue vesting, under their original terms, through the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and (iv) vested stock options will remain outstanding subject to their terms. Other than as set forth above, all remaining equity awards that would have been outstanding and unvested as of the execution of the Transition Agreement were forfeited and cancelled as of November 6, 2025.

Pursuant to the Transition Agreement, Mr. Kalish will receive continued security services and payment of COBRA premiums until March 31, 2027. He also will receive director compensation in connection with his continued service on the Board of Directors.

The foregoing descriptions are qualified in their entirety by reference to the Transition Agreement, which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Report:
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Exhibit Index

Exhibit No.   Description
10.1*+
Transition Agreement, dated as of November 6, 2025, by and between DraftKings Inc. and Matthew Kalish.

31.1*
  Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.

31.2*
  Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.

32.1**
  Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**
  Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*   Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*   Inline XBRL Taxonomy Extension Schema Document.
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*   Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104.1 Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit).

* Filed herewith.
** Furnished herewith.
+    Management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

  DRAFTKINGS INC.
Date: November 7, 2025  
  By: /s/ Alan W. Ellingson
  Name: Alan W. Ellingson
  Title: Chief Financial Officer
  (Principal Financial Officer)

By: /s/ Erik Bradbury
Name: Erik Bradbury
Title: Chief Accounting Officer
(Principal Accounting Officer)

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