DraftKings Gears Up for Q3 Earnings: What's in the Offing?

DraftKings Inc. DKNG is scheduled to report third-quarter 2025 results on Nov. 6, after the closing bell. In the last reported quarter, the company registered an earnings miss of 7.3%.

DKNG’s Estimates Trend

The Zacks Consensus Estimate for third-quarter adjusted loss per share has widened to 14 cents from 2 cents in the past 30 days. In the prior-year quarter, the company reported an adjusted loss per share of 60 cents. For revenues, the consensus mark is pegged at $1.24 billion, indicating a 13.3% year-over-year increase.

What Might Have Shaped DKNG’s Q3 Results?

DraftKings’ top line in third-quarter 2025 is likely to have been driven by continued product innovation, strong engagement trends and its leadership in online sports betting and iGaming. The integration of AI-based personalization and enhanced trading systems is likely to have improved user experiences and in-play betting performance, helping sustain customer activity during the quarter. 

Live betting remains a major growth driver, with DraftKings maintaining industry-leading uptime and an expanding range of in-game wagering options, which have become increasingly popular during major sporting events such as the NFL and NBA seasons. The company’s focus on optimized parlay offerings and improved bet mix might also have supported higher hold rates and overall net revenue gains.

In addition, DraftKings’ ongoing expansion into new jurisdictions, most notably its mobile sportsbook launch in Missouri, is likely to have added to the top-line momentum. The company’s efficient cross-selling between Sportsbook and iGaming customers, combined with targeted promotional spending, continues to strengthen its customer base and brand loyalty. Its growing presence among “slots-first” iGaming users and the ramp-up of jackpot products might have further diversified revenue streams. Moreover, strategic partnerships and potential collaborations with sports media platforms might have enhanced user engagement and visibility, helping drive organic growth across existing states.

That said, DKNG’s bottom line in third-quarter 2025 is likely to have been pressured by a few factors. Rising tax burdens in key states like Illinois, New Jersey and Louisiana have increased operational costs, while expansion-related expenses tied to the Missouri launch are expected to have weighed on profitability. Elevated marketing investments during the peak football season, essential for customer acquisition, are expected to have added short-term cost pressure despite ongoing efficiency improvements.

Additionally, the implementation of new tax pass-through mechanisms in Illinois and other regulatory developments might have created temporary friction in margins. Overall, while revenues are likely to have remained robust, these structural and seasonal costs might have limited bottom-line expansion in the quarter.

What Does the Zacks Model Unveil for DKNG?

Our proven model does not predict an earnings beat for DraftKings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This not the case here.

DKNG’s Earnings ESP: DraftKings has an Earnings ESP of -100.00% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank of DKNG: The company carries a Zacks Rank #4 (Sell) at present.

Stocks to Consider

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to deliver an earnings beat this time around.

Amer Sports, Inc. AS has an Earnings ESP of +4.84% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

For the to-be-reported quarter, Amer Sports is expected to register a 78.6% increase in earnings. Amer Sports reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 83.9%.

Melco Resorts & Entertainment Limited MLCO has an Earnings ESP of +9.09% and a Zacks Rank #3 at present.

For the to-be-reported quarter, Melco Resorts & Entertainment’s earnings are expected to increase 37.5%. Melco Resorts & Entertainment reported better-than-expected earnings in two of the trailing four quarters and missed twice, the average surprise being 333%.

AMC Entertainment Holdings, Inc. AMC currently has an Earnings ESP of +2.49% and a Zacks Rank of 3.

For the to-be-reported quarter, AMC Entertainment’s earnings are expected to decline 325% year over year. AMC Entertainment reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 33.8%.

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This article originally published on Zacks Investment Research (zacks.com).

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