DraftKings's record-breaking Q2 2025 earnings as prediction market ambitions resurface
DraftKings has reported a record-breaking second quarter, with revenue jumping 37% year-on-year to $1.513 billion, surpassing expectations.
“We set records for revenue, net income, and Adjusted EBITDA in the second quarter, driven by an acceleration in revenue growth to 37% year-over-year,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “We are pleased to be maintaining our fiscal year 2025 guidance, with revenue expected to be closer to the high end of our range, highlighting the strength of our platform as we prepare for an exciting new state launch.”
The Boston-based gaming giant posted net income of $158 million for the quarter ending June 30, a sharp improvement from $63.8 million in Q2 2024. Adjusted EBITDA more than doubled to $301 million, up from $127.9 million a year earlier.
User growth and product strength driving momentum
Monthly Unique Payers (MUPs) rose to 3.3 million, a 6% year-on-year increase, described as “strong unique payer retention and acquisition across DraftKings’ Sportsbook and iGaming product offerings and the impact of the acquisition of Jackpocket.” Excluding the Jackpocket impact, MUPs still grew 5% year-on-year.
At the same time, Average Revenue per MUP (ARPMUP) climbed 29% to $151. DraftKings attributed this growth to an “improvement in our Sportsbook hold percentage and improved promotional reinvestment for Sportsbook.” Excluding Jackpocket, the ARPMUP was up 30%.
CFO Alan Ellingson reaffirmed the company’s long-term strategy. “We remain focused on investing in key growth initiatives across the organisation to maximise shareholder returns over the long-term,” he said. He also noted that DraftKings had repurchased 6.5 million shares during the first half of the year as part of its stock repurchase programme.
DraftKings also reaffirmed its full-year 2025 guidance, expecting revenue to come in at the higher end of its $6.2 billion to $6.4 billion range, translating to approximately 32% annual growth. Adjusted EBITDA is forecasted between $800 million and $900 million.
Record sportsbook and iGaming revenues
The company’s revenue gains were powered by a surge in sportsbook performance. Sportsbook revenue for Q2 reached $997.9 million, up 45.3% from the same period last year, with handle exceeding $11.4 billion, a 6.3% increase. The net revenue margin rose to 8.7% from 6.4% in Q2 2024.
iGaming revenue also grew substantially, climbing 22.6% year-on-year to $429.7 million.
Other revenue, including daily fantasy and advertising, totalled $85 million, up 26.8%.
Geographically, DraftKings is now live with mobile sports betting in 25 states and Washington, D.C., representing nearly half the U.S. population. The company expects to launch in Missouri later this year, pending necessary approvals. iGaming is currently available in five states, covering around 11% of the U.S. population, and the company is also active in Ontario, Canada.
Prediction market ambitions
DraftKings’ statements hinted at a possible move into the emerging U.S. prediction market space. “The Company’s guidance for fiscal year 2025 does not include the potential launch of a Prediction Markets offering,” the company stated in its report.
This comment comes just weeks after reports surfaced that DraftKings is in talks to acquire Railbird Exchange, a federally licensed prediction market platform founded in 2021 by two former Point72 analysts. The move would allow DraftKings to bypass the lengthy regulatory process required for a federal licence, a process it previously attempted and quietly abandoned in April.
At the time, a spokesperson said, “DraftKings continues to monitor developments related to prediction markets as an emerging product that reflects evolving consumer engagement and warrants thoughtful consideration.”
If the deal goes through, it would come as rival FanDuel reportedly explores its own partnership with Kalshi, another fast-growing prediction market firm, which recently secured $185 million in Series C funding and a $2 billion valuation.
