Q4 2025 DraftKings Inc Earnings Call

February 13, 2026

Speaker #1: Good day, and thank you for standing by. Welcome to the DraftKings 4th Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode.

Operator: Good day, and thank you for standing by. Welcome to the DraftKings Q4 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Michael DeLalio, Senior Director of Investor Relations. Please go ahead.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your speaker today, Michael DeLalio, Senior Director of Investor Relations. Please go ahead.

Speaker #2: Good morning, everyone, and thank you for joining us today. Certain statements we make during this call may constitute forward-looking statements that are subject to risks, uncertainties, and other factors as discussed further in our SEC filings, which could cause our actual results to differ materially from our historical results or from our forecasts.

Michael DeLalio: Good morning, everyone, and thank you for joining us today. Certain statements we make during this call may constitute forward-looking statements that are subject to risks, uncertainties, and other factors, as discussed further in our SEC filings, that could cause our actual results to differ materially from our historical results or from our forecasts. We assume no responsibility to update forward-looking statements other than as required by law. During this call, management will also discuss certain non-GAAP financial measures that we believe may be useful in evaluating DraftKings' operating performance. These measures should not be considered in isolation or as a substitute for DraftKings' financial results prepared in accordance with GAAP.

Speaker #2: We assume no responsibility to update forward-looking statements, other than as required by law. During this call, management will also discuss certain non-GAAP financial measures that we believe may be useful in evaluating DraftKings' operating performance.

Speaker #2: These measures should not be considered in isolation or as a substitute for DraftKings' financial results prepared in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, letter to shareholders, and earnings presentation, which can be found on our website and in our annual report on Form 10-K filed with the SEC.

Michael DeLalio: Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, letter to shareholders, and earnings presentation, which can be found on our website and in our annual report on Form 10-K filed with the SEC. Hosting the call today, we have Jason Robins, co-founder and Chief Executive Officer of DraftKings, who will share some opening remarks and an update on our business. Following Jason's remarks, our Chief Financial Officer, Alan Ellingson, will provide a brief review of our financials. We will then open the line to questions. I will now turn the call over to Jason Robins.

Speaker #2: Hosting the call today, we have Jason Robins, co-founder and chief executive officer of DraftKings, who will share some opening remarks and an update on our business.

Speaker #2: Following Jason's remarks, our chief financial officer, Alan Ellingson, will provide a brief review of our financials. We will then open the line to questions.

Speaker #2: I will now turn the call over to Jason Robins.

Speaker #3: Thank you, Mike. We closed 2025 on a high note, setting new quarterly records for revenue and adjusted EBITDA. Fourth quarter revenue grew 43% year over year to nearly $2 billion.

Jason Robins: Thank you, Mike. We closed 2025 on a high note, setting new quarterly records for revenue and adjusted EBITDA. Fourth quarter revenue grew 43% year-over-year to nearly $2 billion. Adjusted EBITDA was $343 million, 4 times the prior year period. Adjusted EBITDA margin expanded by more than 1,000 basis points year-over-year to 17%. We repurchased another 8 million shares during the quarter, and we expect to remain active with repurchases as our adjusted EBITDA continues to grow. We are in a strong position. Our sustainable advantages in product, technology, trust, and marketing continue to drive higher LTV and efficient customer acquisition. AI and machine learning amplify each one by making our products better, our platform faster, consumer trust stronger, and marketing more efficient.

Speaker #3: Adjusted EBITDA was $343 million, four times the prior year period. Adjusted EBITDA margin expanded by more than 1,000 basis points year over year to 17%.

Speaker #3: We repurchased another $8 million shares during the quarter, and we expect to remain active with repurchases as our adjusted EBITDA continues to grow. sustainable advantages in product, technology, trust, and marketing continue to drive higher LTV and efficient customer acquisition.

Speaker #3: AI and machine learning amplify each one by making our products better, our platform faster, consumer trust stronger, and marketing more efficient. The result is predictable and improving cohort economics, reinforcing our conviction that we have built an efficient and powerful long-term business model.

Jason Robins: The result is predictable and improving cohort economics, reinforcing our conviction that we have built an efficient and powerful long-term business model. We are excited to share more details at our Virtual Investor Day on 2 March. Now we take our next step. Predictions is rapidly developing into a massive incremental opportunity, and we are moving with urgency. We expect to emerge as the leader in this nascent category. We plan to deploy growth capital to build the best customer experience, predictions, and acquire millions of customers. This year, we anticipate significant step function improvements to our predictions offering, including the integration of Railbird and launch of our market-making division. We are targeting $hundreds of millions in annual revenue for DraftKings predictions in the years ahead. We believe there is much more upside over the long term. This should translate to meaningful incremental Adjusted EBITDA.

Speaker #3: We are excited to share more details at our virtual investor day on March 2nd. Now we take our next step. Predictions is rapidly developing into a massive incremental opportunity.

Speaker #3: And we are moving with urgency. We expect to emerge as the leader in this nascent category. We plan to deploy growth capital to build the best customer experience and predictions, and acquire millions of customers.

Speaker #3: This year, we anticipate significant step-function improvements to our predictions offering, including the integration of RailBird and the launch of our market-making division. We are targeting hundreds of millions in annual revenue for DraftKings predictions in the years ahead.

Jason Robins: This year, we anticipate significant step function improvements to our predictions offering, including the integration of Railbird and launch of our market-making division. We are targeting $hundreds of millions in annual revenue for DraftKings predictions in the years ahead. We believe there is much more upside over the long term. This should translate to meaningful incremental Adjusted EBITDA.

Speaker #3: We believe there is much more upside over the long term. This should translate to meaningful, incremental adjusted EBITDA. And, based on our predictions, we have the playbook to execute and win.

Jason Robins: In predictions, we have the playbook to execute and win. Before I go deeper on predictions, I want to highlight the strength of our core business. In fiscal year 2025, we grew revenue 27% year-over-year to above $6 billion. Adjusted EBITDA more than tripled to over $600 million and exceeded the high end of the guidance range we provided in November. We reported positive net income for the first time and repurchased 16 million shares during the fiscal year. The business is scaling in a durable way. Since fiscal year 2022, we have grown customers by nearly 6 million, revenue by roughly $4 billion, and Adjusted EBITDA by more than $1 billion. Every year has been better than the last because our LTV flywheel continues to improve, powered by our sustainable advantages.

Speaker #3: Before I go deeper on predictions, I want to highlight the strengths of our core business. In fiscal year 2025, we grew revenue 27% year over year to above $6 billion.

Speaker #3: Adjusted EBITDA more than tripled to over $600 million, and exceeded the high end of the guidance range we provided in November. We reported positive net income for the first time and repurchased $16 million shares during the fiscal year.

Speaker #3: The business is scaling in a durable way. Since fiscal year 2022, we have grown customers by nearly $6 million, revenue by roughly $4 billion, and adjusted EBITDA by more than $1 billion.

Speaker #3: Every year has been better than the last because our LTV flywheel continues to improve, powered by our sustainable advantages. We expect our revenue and adjusted EBITDA to grow for many years to come.

Jason Robins: We expect our revenue and Adjusted EBITDA to grow for many years to come. I also want to directly address the most common question we are getting: Could a growing predictions category overlap with sportsbook over time? To date, we are not seeing a discernible impact from predictions on our revenue. In our newest sportsbook state, Missouri, adoption of our offering was higher than in any other state launch in our history through the first two months, and activity per customer has been strong. In Q4, our overall sportsbook handle accelerated to 13% year-over-year. In January, our sportsbook handle increased 4% year-over-year, even after two consecutive months of sportsbook-friendly outcomes and as our parlay handle mix continued to surge. Internal and third-party data suggest predictions impacted our January handle only very slightly and primarily impacted low-margin customers.

Speaker #3: I also want to directly address the most common question we are getting. Could a growing predictions category overlap with sportsbook over time? To date, we are not seeing a discernible impact from predictions on our revenue.

Speaker #3: In our newest sportsbook state, Missouri, adoption of our offering was higher than in any other state launch in our history through the first two months, and activity per customer has been strong.

Speaker #3: In the fourth quarter, our overall sportsbook handle accelerated to 13% year over year. In January, our sportsbook handle increased 4% year over year, even after two consecutive months of sportsbook-friendly outcomes and as our parlay handle mix continued to surge.

Jason Robins: In Q4, our overall sportsbook handle accelerated to 13% year-over-year. In January, our sportsbook handle increased 4% year-over-year, even after two consecutive months of sportsbook-friendly outcomes and as our parlay handle mix continued to surge. Internal and third-party data suggest predictions impacted our January handle only very slightly and primarily impacted low-margin customers.

Speaker #3: Internal and third-party data suggest predictions impacted our January handle only very slightly, and primarily impacted low-margin customers. Consequently, the impact to our revenue has been de minimis.

Jason Robins: Consequently, the impact to our revenue has been de minimis. Now I'd like to focus on predictions. We have been building DraftKings for more than 14 years. When a new growth lane opens, we move fast and execute at scale. Predictions is the most exciting new growth opportunity we have seen since PASPA was struck down in 2018. Early signals are strong. On Super Bowl Sunday, DraftKings predictions had the second-most downloads in its category and delivered 3 times its prior record for daily trading volume. Customer retention is also strong so far, even with a product that is early and positioned to improve rapidly as we add content. In predictions, speed and execution, combined with a strong brand, smooth interface, and real sports modeling, trading, and technology expertise, will determine long-term leadership. This is where DraftKings thrives. The opportunity here could be large.

Speaker #3: Now, I'd like to focus on predictions. We have been building DraftKings for more than 14 years. When a new growth lane opens, we move fast and execute at scale.

Speaker #3: Predictions is the most exciting new growth opportunity we have seen since past bullish struck down in 2018. Early signals are strong. On Super Bowl Sunday, DraftKings Predictions had the second most downloads in its category and delivered three times its prior record for daily trading volume.

Speaker #3: Customer retention is also strong so far, even with a product that is early and positioned to improve rapidly as we add content. In predictions, speed and execution, combined with a strong brand, smooth interface, and real sports modeling, trading, and technology expertise will determine long-term leadership.

Speaker #3: This is where DraftKings thrives. The opportunity here could be large. Based on analyst estimates, predictions could represent a $10 billion annual gross revenue opportunity in the years ahead.

Jason Robins: Based on analyst estimates, predictions could represent a $10 billion annual gross revenue opportunity in the years ahead. We expect to capture it across multiple business lines, including the customer-facing platform, our own exchange, and market making. We expect the volume on DraftKings Predictions to keep building, with growth accelerating through 2026 and beyond. Our goal is simple: We intend to lead the predictions category. As such, we support the CFTC's engagement on event contracts and the advancement of a well-defined and durable regulatory framework. The CFTC chair recently directed agency staff to establish clear standards for event contracts to provide certainty for market participants. We view this direction as constructive. Clear rules should reward operators with strong compliance and responsible engagement infrastructure and support the expansion of sports-related predictions over time. We bring sports, trading, and technology together at scale, backed by strong distribution.

Speaker #3: We expect to capture it across multiple business lines, including the customer-facing platform, our own exchange, and market-making. We expect the volume on DraftKings predictions to keep building with growth accelerating through 2026 and beyond.

Speaker #3: Our goal is simple. We intend to lead the predictions category. As such, we support the CFTC's engagement on events contracts and the advancement of a more defined and durable regulatory framework.

Jason Robins: The CFTC chair recently directed agency staff to establish clear standards for event contracts to provide certainty for market participants. We view this direction as constructive. Clear rules should reward operators with strong compliance and responsible engagement infrastructure and support the expansion of sports-related predictions over time. We bring sports, trading, and technology together at scale, backed by strong distribution.

Speaker #3: The CFTC Chair recently directed agency staff to establish clear standards for event contracts to provide certainty for market participants. We view this direction as constructive.

Speaker #3: Clear rules should reward operators with strong compliance and responsible engagement infrastructure, and support the expansion of sports-related predictions over time. We bring sports, trading, and technology together at scale, backed by strong distribution.

Speaker #3: We originate prices and manage risk every day in our Sportsbook. We have hundreds of data scientists and machine learning engineers building sports models, plus a dedicated trading desk that fine-tunes live pricing in real time.

Jason Robins: We originate prices and manage risk every day in our sportsbooks. We have hundreds of data scientists and machine learning engineers building sports models, plus a dedicated trading desk that fine-tunes live pricing in real time. We combine that with a trusted brand, a large customer database we can activate efficiently, and marketing relationships like ESPN and NBCUniversal that give us flexible, high-intent inventory to deploy as returns dictate. We have run this playbook before. In fantasy, sportsbook, iGaming, and lottery, we've built leadership positions by steadily bringing critical technology in-house. In sportsbook, we successfully integrated acquisitions and continued investing deeply in our proprietary technology to deliver the number one-rated product. Our sportsbook product is far ahead of our peers in uptime, which is the percentage of a game during which odds are available. Predictions is the next chapter of this same strategy.

Speaker #3: We combine that with a trusted brand, a large customer database we can activate efficiently, and marketing relationships like ESPN and NBCUniversal that give us flexible, high-intent inventory to deploy as returns dictate.

Speaker #3: We have run this playbook before. In fantasy, sportsbook, iGaming, and lottery, we built leadership positions by steadily bringing critical technology in-house. In sportsbook, we successfully integrated acquisitions and continue to invest deeply in our proprietary technology to deliver the number one rated product.

Jason Robins: In fantasy, sportsbook, iGaming, and lottery, we've built leadership positions by steadily bringing critical technology in-house. In sportsbook, we successfully integrated acquisitions and continued investing deeply in our proprietary technology to deliver the number one-rated product. Our sportsbook product is far ahead of our peers in uptime, which is the percentage of a game during which odds are available. Predictions is the next chapter of this same strategy.

Speaker #3: Our sportsbook product is far ahead of our peers in uptime, which is the percentage of a game during which odds are available. Predictions is the next chapter of this same strategy.

Speaker #3: We have already designed our product to improve rapidly. Our product is built to scale. DraftKings predictions already connects to multiple exchanges so we can stay nimble as trading options evolve and continuously expand content availability and liquidity.

Jason Robins: We have already designed our product to improve rapidly. Our product is built to scale. DraftKings Predictions already connects to multiple exchanges so we can stay nimble as trading options evolve and continuously expand content availability and liquidity. Our recent Crypto.com integration was an immediate upgrade in breadth and engagement, adding new trading options across categories such as player performance markets, golf, UFC, and politics. Next, we plan to integrate Railbird near the middle of this year to improve innovation velocity and strengthen customer economics by owning more of the stack. We are also launching market making because liquidity is a core part of the customer experience and predictions. Contract listings, fees, market structure, and distribution matter, but tight two-way markets with depth are what attracts participants.

Speaker #3: Our recent Crypto.com integration was an immediate upgrade and expanded engagement, adding new trading options across categories such as player performance markets, golf, UFC, and politics.

Speaker #3: Next, we plan to integrate RailBird near the middle of this year to improve innovation velocity and strengthen customer economics by owning more of the stack.

Jason Robins: Next, we plan to integrate Railbird near the middle of this year to improve innovation velocity and strengthen customer economics by owning more of the stack. We are also launching market making because liquidity is a core part of the customer experience and predictions. Contract listings, fees, market structure, and distribution matter, but tight two-way markets with depth are what attracts participants.

Speaker #3: We are also launching market-making because liquidity is a core part of the customer experience in predictions. Contract listings, fees, market structure, and distribution matter.

Speaker #3: But type two-way markets with depth are what attracts participants. Exchanges seed liquidity by incentivizing market makers, and DraftKings can lead market-making for sports contracts because we model sports probabilities exceptionally well and we have the infrastructure to provide liquidity across a broad spectrum of contracts.

Jason Robins: Exchanges seed liquidity by incentivizing market makers, and DraftKings can lead market making for sports contracts because we model sports probabilities exceptionally well, and we have the infrastructure to provide liquidity across a broad spectrum of contracts. This creates two revenue engines for DraftKings and predictions. First, transaction fees, as we own the customer relationship through DraftKings predictions and offer a platform to trade across sports and non-sports. Second, trading economics for market making and proprietary trading on our own exchange and where it makes sense on other exchanges. Over time, we also intend to introduce exclusive combination trading options that may become a major differentiator as the customer experience evolves. With that, I will turn it over to our Chief Financial Officer, Alan Ellingson, to discuss our results and guidance.

Speaker #3: This creates two revenue engines for DraftKings and Predictions. First, transaction fees. As we own the customer relationship through DraftKings Predictions and offer a platform to trade across sports and non-sports.

Jason Robins: Second, trading economics for market making and proprietary trading on our own exchange and where it makes sense on other exchanges. Over time, we also intend to introduce exclusive combination trading options that may become a major differentiator as the customer experience evolves. With that, I will turn it over to our Chief Financial Officer, Alan Ellingson, to discuss our results and guidance.

Speaker #3: Second, trading economics for market-making and proprietary trading on our own exchange and, where it makes sense, on other exchanges. Over time, we also intend to introduce exclusive combination trading options that may become a major differentiator as the customer experience evolves.

Speaker #3: With that, I will turn it over to our Chief Financial Officer, Alan Ellingson, to discuss our results and guidance.

Speaker #1: Thank you, Jason. Before I cover our fiscal year 2026 guidance, I'd like to discuss our 2025 financial performance, starting with the fourth quarter. Please note that all income statement measures discussed, except for revenue, are on a non-GAAP adjusted EBITDA basis.

Alan Ellingson: Thank you, Jason. Before I cover our fiscal year 2026 guidance, I'd like to discuss our 2025 financial performance, starting with the fourth quarter. Please note that all income statement measures discussed, except for revenue, are on a non-GAAP adjusted EBITDA basis. Our Q4 revenue grew 43% year-over-year to nearly $2 billion. Adjusted EBITDA was $343 million, four times the prior year period. Adjusted EBITDA margins expanded by more than 1,000 basis points year-over-year to 17%.... We repurchased another 8 million shares during the quarter, and we expect to remain active with share repurchases as our adjusted EBITDA continues to grow. Results were strong across all our verticals in fiscal year 2025. Fantasy revenue increased as Pick Six has begun to scale.

Speaker #1: Our fourth quarter revenue grew 43% year over year to nearly $2 billion, adjusted EBITDA was $343 million, four times the prior year period. Adjusted EBITDA margins expanded by more than 1,000 basis points year over year to 17%.

Speaker #1: We repurchased another 8 million shares during the quarter, and we expect to remain active with share repurchases as our adjusted EBITDA continues to grow.

Speaker #1: Results were strong across all our verticals in fiscal year 2025. Fantasy revenue increased as PIX6 has begun to scale. Year over year, sportsbook revenue increased over 30%, while sportsbook net revenue margin expanded by more than 100 basis points.

Alan Ellingson: Year-over-year, Sportsbook revenue increased over 30%, while Sportsbook net revenue margin expanded by more than 100 basis points. iGaming revenue increased 20% as we expanded our offering and attracted a broader demographic. Lottery revenue benefited from a stronger jackpot environment, as well as rolling out scratcher games and Keno in additional states. And we delivered all this while launching our fifth vertical, predictions. Sportsbook had a standout fourth quarter. Revenue increased 64% year-over-year to $1.4 billion. Handle growth accelerated for the second consecutive quarter to 13% year-over-year. Sportsbook net revenue margin increased 250 basis points to 8%. Parlay handle mix increased nearly 500 basis points. This continues the multi-year trend that is driving our structural net revenue margin higher. Sports outcomes were sportsbook-friendly in the fourth quarter, and our overall hold percentage was slightly above 12%.

Speaker #1: iGaming revenue increased 20% as we expanded our offering and attracted a broader demographic. Lottery revenue benefited from a stronger jackpot environment, as well as rolling out Scratcher games and Kino in additional states.

Speaker #1: And we delivered all this while launching our fifth vertical, Predictions. Sportsbook had a standout fourth quarter. Revenue increased 64% year over year to $1.4 billion. Handle growth accelerated for the second consecutive quarter to 13% year over year.

Alan Ellingson: Revenue increased 64% year-over-year to $1.4 billion. Handle growth accelerated for the second consecutive quarter to 13% year-over-year. Sportsbook net revenue margin increased 250 basis points to 8%. Parlay handle mix increased nearly 500 basis points. This continues the multi-year trend that is driving our structural net revenue margin higher. Sports outcomes were sportsbook-friendly in the fourth quarter, and our overall hold percentage was slightly above 12%.

Speaker #1: Sportsbook net revenue margin increased 250 basis points to 8%. Parlay handle mix increased nearly 500 basis points. This continues the multi-year trend that is driving our structural net revenue margin higher.

Speaker #1: Sport outcomes where sportsbook-friendly in the fourth quarter and our overall hold percentage was slightly above 12%. As many of you are aware, variance is random in nature, and in the short term can either be a tailwind or a headwind for our business.

Alan Ellingson: As many of you are aware, variance is random in nature, and in the short term, can either be a tailwind or a headwind for our business. For the 2025 to 2026 NFL season, our NFL hold percentage was 16%. I would also like to touch on the scale of our Sportsbook business for the fiscal year 2025. Our Sportsbook handle increased 11% year-over-year to $54 billion. Our total potential payouts across all open wagers, or capital at risk, was $2.5 trillion due to the multiplicative nature of parlays. We achieved this scale even though our Sportsbook is only available to about half the US population. As a result of our strong Q4, we had an excellent year. We grew revenue 27% year-over-year to above $6 billion.

Speaker #1: For the 2025 to 2026 NFL season, our NFL hold percentage was 16%. I would also like to touch on the scale of our sportsbook business for the fiscal year 2025.

Speaker #1: Our sportsbook handle increased 11% year over year to 54 billion. Our total potential payouts across all open wages, or capital at risk, was $2.5 trillion due to the multiplicative nature of Parlay's.

Speaker #1: We achieved this scale even though our sportsbook is only available to about half the U.S. population. As a result of our strong fourth quarter, we had an excellent year.

Speaker #1: We grew revenue 27% year over year to above $6 billion, our adjusted EBITDA more than tripled to over $600 million, and also exceeded the high end of the guidance range that we provided in November 2025.

Alan Ellingson: Our Adjusted EBITDA more than tripled to over $600 million and also exceeded the high end of the guidance range that we provided in November 2025. We repurchased 16 million shares during the fiscal year. We also reported positive GAAP net income for the first time. I am particularly proud of that last fact, that we generated positive net income for the fiscal year 2025, as it demonstrates how efficient and powerful our business model is becoming. As Jason mentioned, we expect to share more about the strength of our business model and our sustainable advantages at our virtual Investor Day on March 2. Now I'd like to touch on our fiscal year 2026 guidance. We are excited about both our results and our business trajectory.

Speaker #1: We repurchased 16 million shares during the fiscal year. We also reported positive GAAP net income for the first time. I am particularly proud of that last fact—that we generated positive net income for the fiscal year 2025.

Speaker #1: As it demonstrates how efficient and powerful our business model is becoming. As Jason mentioned, we expect to share more about the strength of our business model and our sustainable advantages at our virtual investor day on March 2.

Speaker #1: Now I'd like to touch on our fiscal year 2026 guidance. We are excited about both our results and our business trajectory. In fiscal year 2026, we expect DraftKings to achieve between $6.5 billion and $6.9 billion of revenue, and between $700 million and $900 million of adjusted EBITDA.

Alan Ellingson: In fiscal year 2026, we expect DraftKings to achieve between $6.5 billion and $6.9 billion of revenue and between $700 million and $900 million of Adjusted EBITDA. Our revenue and Adjusted EBITDA guidance ranges reflect expected investments in DraftKings Predictions, line-of-sight jurisdiction launches, and disciplined planning as business conditions evolve. We assume state tax rates will remain consistent with where they are today. That concludes our remarks, and we will now open the line for questions.

Speaker #1: Our revenue and adjusted EBITDA guidance ranges reflect expected investments in DraftKings predictions, line of sight jurisdiction launches, and disciplined planning as business conditions evolve.

Speaker #1: We assume state tax rates will remain consistent with where they are today. That concludes our remarks, and we will now open the line for questions.

Speaker #2: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again.

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from the line of Dan Pulitzer from JP Morgan.

Speaker #2: Our first question comes from the line of Dan Politzer from JPMorgan.

Speaker #3: Hey, good morning, everyone. Thanks for the question. I was hoping we could kick things off talking about prediction markets. Jason, the tone of your letter and comments certainly reflect the pivot and how you're thinking about this—with you, I think, going so far as to say that this is the most exciting growth opportunity since PASPA.

Daniel Politzer [Executive Director, Equity Research: Hey, good morning, everyone. Thanks for the question. I was hoping we could kick things off, talking about Prediction Markets. Jason, the tone of your letter and comments certainly reflect a pivot in how you're thinking about this, with you, I think, going so far as to say that this is the most exciting growth opportunity since PASPA. I guess, the question is, why, why are you so much more aggressively leaning into Prediction Markets now? What have you seen in the past few months, either from a regulatory backdrop, broad social acceptance, or recent rollout of DraftKings Predictions, that gives you the confidence that this investment makes sense? And perhaps most importantly, how are you thinking about the level of investment required for 2026, given some of your peers have talked about $200 to 300 million there? Thanks.

Speaker #3: I guess the question is, why are you so much more aggressively leaning into prediction markets now? What have you seen in the past few months, either from a regulatory backdrop, broad social acceptance, or recent rollout of DraftKings predicts that gives you the confidence that this investment makes sense?

Speaker #3: And perhaps most importantly, how are you thinking about the level of investment required for 2026, given some of your peers have talked about 2 to 300 million there?

Speaker #3: Thanks.

Speaker #4: Well, first of all, we have been excited about predictions for why I think you're right—we're more excited now. I wouldn't say it's a change of tone as much as an acceleration of our excitement.

Jason Robins: Well, first of all, we have been excited about predictions for a while. I think you're right, we're, we're more excited now. I wouldn't say it's a change of tone as much as an acceleration of our excitement. I think part of it is there's been a real lean in from the CFTC. What went from sort of a hands-off, you know, we're not gonna comment, posture from the previous interim chair, is now, you know, a full-fledged affirmation that this is something that the CFTC considers to be firmly under their jurisdiction, they intend to defend in the courts, and they're going to issue real guidelines and regulations. So, anything that creates a stable regulatory environment that allows us to operate more freely is a great upside thing for us.

Speaker #4: I think part of it is there's been a real lean-in from the CFTC, what went from sort of a hands-off, "We're not going to comment," posture from the previous interim chair is now a full-fledged affirmation that this is something that the CFTC considers to be firmly under their jurisdiction.

Speaker #4: They intend to defend in the courts and they're going to issue real guidelines and regulations. So anything that creates a stable regulatory environment that allows us to operate more freely is a great upside thing for us.

Speaker #4: And then you combine that with what we're seeing in our early numbers, and what we're seeing in the broader numbers from some of the others in the market, and it's clear that there's a lot of growth potential here.

Jason Robins: And then you combine that with what we're seeing in our early numbers and what we're seeing in the broader numbers from, you know, some of the others in the market, and it's clear that there's a lot of growth potential here. I've seen analysts' estimates, you know, as high as $16 billion. You know, we centered around 10, which is kind of the average of a bunch and some back-of-the-envelope math we were doing as well. But it's clearly a huge opportunity and we're incredibly well positioned. And I think the biggest thing that was sort of, you know, holding us back, if you will, before, was the regulatory uncertainty, and that has since been cleared up.

Speaker #4: I've seen analyst estimates as high as $16 billion we centered around 10, which is kind of the average of a bunch. And some back-the-envelope math, we were doing as well.

Speaker #4: But it's clearly a huge opportunity. We're incredibly well positioned. And I think the biggest thing that was sort of holding us back, if you will, before was the regulatory uncertainty and that has since been cleared up.

Speaker #4: So with that, I think, really, really excited. And you combine that with what we're seeing in the numbers, and I think it's going to be a big year.

Jason Robins: So, you know, with that, I think really, really excited, and you combine that with what we're seeing in the numbers, and I think it's gonna be a big year. As far as the investment level, one of the great things for us is we already have a lot of what we need. We have the pricing models, we have the marketing. Yes, we'll probably spend some incremental marketing, but we can repurpose a lot of our marketing. We have a ton of national spend targeting the sports customer race. There's a ton of synergy there. I think it's a huge advantage for us that we can do that.

Speaker #4: As far as the investment level, one of the great things for us is we already have a lot of what we need. We have the pricing models.

Speaker #4: We have the marketing. Yes, we'll probably spend some incremental marketing, but we can repurpose a lot of our marketing. We have a ton of national spend targeting the sports customer rates.

Speaker #4: There's a ton of synergy there. I think it's a huge advantage for us that we can do that.

Speaker #3: Got it, thanks. And then just for my follow-up, in terms of the guidance—obviously there's an implied deceleration in revenues. I think it's around 11% in 2026.

Daniel Politzer [Executive Director, Equity Research: Got it. Thanks. And then just for my follow-up, in terms of the guidance, obviously, there's an implied deceleration of revenues. I think it's around 11% in 2026. Can you maybe just give us the building blocks there for how you're thinking about sports betting within that, and then certainly handle, that's been a focus. You mentioned January was up 4%. But in terms of just, you know, the building blocks for sports and kind of that broader revenue growth guide for 2026 would be helpful.

Speaker #3: Can you maybe just give us the building blocks there for how you're thinking about sports betting within that? And then certainly handle, that's been a focus.

Speaker #3: You mentioned January, it was up 4%. But in terms of just the building blocks for sports and kind of that broader revenue growth guide for 2026 would be helpful.

Speaker #4: Yeah. I just want to start a little bit on philosophy. So first, several years, we were public. We were very conservative with our guidance.

Jason Robins: ... Yeah, I just want to start a little bit on philosophy. So, the first several years we were public, we were very conservative with our guidance. We consistently were beating and raising, and we kind of got away from that a little bit. I look at 2023, at the beginning of 2023, we guided to what all of you thought was a disappointing number, and we got killed. I think we were down, like, 16% on the day. And then we proceeded to beat and raise every quarter for the rest of the year and got it back, and then some, ended up, I think, about $300 million better on the EBITDA side, Adjusted EBITDA side from what we originally guided. So I like that playbook a lot better, and we got away from that.

Speaker #4: We consistently were beating and raising. And we kind of got away from that a little bit. I look at 2023. At the beginning of 2023, we got it to what all of you thought was a disappointing number.

Speaker #4: We got killed. I think we were down like 16% on the day. And then we proceeded to beat and raise every quarter for the rest of the year and got it back.

Speaker #4: And then some ended up, I think, about $300 million better on the EBITDA side, adjusted EBITDA side, from what we originally guided. So I like that playbook a lot better.

Speaker #4: And we got away from that. I thought we had a good year last year. So it's very frustrating to me that we missed our guide.

Jason Robins: I thought we had a good year last year, so it's very frustrating to me that we missed our guide. That was a self-inflicted wound that we did that. We ended up growing our Adjusted EBITDA by $440 million. We had a great revenue growth year at 27%. How we could do that and miss a guide is just shame on us, right? So I think we really went back the other way. We said, "Let's make sure we put something out there that we feel really good about." It kind of went like this. My team came in and showed me a number and said, "We can hit this." And I said, "No, go make it lower." And they went back, and they said, "Okay, now, really, like, we're sure we can hit this." And I said, "I don't care.

Speaker #4: That was a self-inflicted wound that we did that. We ended up growing our adjusted EBITDA by $440 million. We had a great revenue growth year, 27%.

Speaker #4: How we could do that and miss a guide—it's just a shame on us, right? So, I think we really went back the other way.

Speaker #4: We said, "Let's make sure we put something out there that we feel really good about." It kind of went like this. My team came in and showed me a number and said, "We can hit this." And I said, "No, go make it lower." And they went back and they said, "Okay, now we really we're sure we can hit this." And I said, "I don't care.

Speaker #4: Make it lower again." And that's what we got. But for me, missing numbers again is just not acceptable. And so it's not something we're willing to do.

Jason Robins: Make it lower again." That's what we got. But, you know, for me, missing numbers again is just not acceptable, and so it's not something we're willing to do.

Speaker #3: Thanks. I appreciate all the candor.

Jason Robins: Thanks. I appreciate all the candor.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of David Katz from Jefferies.

Operator: Thank you. One moment for our next question. Our next question comes from the line of David Katz from Jefferies.

David Katz: Good morning. Thanks for taking my question. Along that same vein as the follow-up, I appreciate the conservatism and the candor there. Can you just maybe walk us through, you know, 2026 and just help us, and this may be better suited for Alan, help us understand, you know, how to... What could, you know, drive the revenue higher, right? Is there... What do we have for Prediction Markets in that revenue guide in particular? And obviously, you've given us a pretty wider field of play, right, on the EBITDA side as well, right? What, you know, what could cause us to be, you know, higher or lower, you know, as we go through the year, particularly around predictions? I think that's the, you know, the part that we're trying to embed in the models. Thanks.

Speaker #5: Good morning. Thanks for taking my question. Along that same vein as the follow-up, I appreciate the conservatism and the candor there. Can you just maybe walk us through 2026 and just help us, and this may be better suited for Alan, help us understand how to what could drive the revenue higher, right?

Speaker #5: Is there—what do we have for prediction markets in that revenue guide in particular? And, obviously, you've given us a pretty wide field of play on the EBITDA side as well.

Speaker #5: What could cause us to be higher or lower? As we go through the year. Particularly around predictions, I think that's the part that we're trying to embed in the models.

Speaker #5: Thanks.

Speaker #4: Yeah. So I think predictions, really, is all upside. There's nothing in terms of revenue in the guide. We're assuming that this is a year that we spend a lot on customer acquisition in terms of new user offers.

Jason Robins: Yeah. So I think predictions, you know, really is all upside. There's nothing in terms of revenue in the guide. We're assuming that this is a year that we spend a lot on customer acquisition in terms of, you know, new user offers. There probably will be some revenue realistically, but it's just too early to quantify, so we didn't put any revenue in the guide. So I think that's definitely a source of upside. And I think the core business has a lot of upside, too. You know, everybody gets hung up on handle, and we've tried to sort of start to educate people that you can't look at that in isolation. A little bit more behind that.

Speaker #4: There probably will be some revenue realistically, but it's just too early to quantify. So we didn't put any revenue in the guide. So I think that's definitely a source of upside.

Speaker #4: And I think the core business has a lot of upside too. Everybody gets hung up on handle. And we've tried to sort of start to educate people that you can't look at that in isolation.

Speaker #4: A little bit more behind that. So if you look at last year, first 10 months of the year, January through October, right before we issued our last guide, we had a net revenue margin of around 6.5%.

Jason Robins: So, you know, if you look at last year, first 10 months of the year, January through October, right before we issued our last guide, we had a net revenue margin of around 6.5%. And since then, you know, November, December, January, February to date, so, you know, almost the last 4 months or so, we've had a net revenue margin of over 9%, which is about 40% higher. So this has to affect handle, right? So in the beginning of the NFL season, when customers were winning, we had, you know, really high teens handle growth a few weeks, in that sort of October timeframe. And then as we started doing better and as we started also being more efficient with promo, we started seeing more revenue growth.

Speaker #4: And since then—November, December, January, February to date—so almost the last four months or so, we've had a net revenue margin of over 9%, which is about 40% higher.

Speaker #4: So this has to affect handle, right? So in the beginning of the NFL season, when customers were winning, we had really high teams, handle growth a few weeks.

Speaker #4: And that sort of October timeframe. And then as we started doing better, and as we started also being more efficient with promo, we started seeing more revenue growth.

Speaker #4: We did great, as you saw from Q4 revenue-wise. But the handle's going to slow a little bit. Even despite that, we're still growing handle, especially if you look outside of NFL.

Jason Robins: We did great, as you saw from Q4 revenue-wise, but the handle's gonna slow a little bit. Even despite that, we're still growing handle, especially if you look outside of NFL. Outside of NFL, every single sport is up double digits right now, in terms of handle growth. So, you know, now that NFL is over, I expect we'll return to something more like what you guys probably expected. But you're gonna see a slowdown in handle growth when we're winning that much, and also when we're optimizing promo.

Speaker #4: Outside of NFL, every single sport is up double digits right now, in terms of handle growth. So now that NFL is over, I expect we'll return to something more like what you guys probably expected.

Speaker #4: But you're going to see a slowdown in handle growth when we're winning that much and also when we're optimizing promo.

Speaker #5: Okay. Thank you very much.

David Katz: Okie-doke. Thank you very much.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Steven Grambling from Morgan Stanley.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Steven Grambling from Morgan Stanley.

Speaker #5: Hey, thank you. Maybe to follow up on that question, I was hoping you could maybe give a little bit more detail on perhaps what you're seeing in terms of NGR spend in some of the older states, the ones that have been legal longer versus some of the newer.

Stephen Grambling: Hey, thank you. Maybe to follow up on that question, I was hoping you could maybe give a little bit more detail on perhaps what you're seeing in terms of NGR spend in some of the older states, you know, the ones that have been legal longer versus some of the newer. And then as you think about this year and maybe over the next couple of years, maybe how to think through increasing penetration versus increasing spend per head. Thanks.

Speaker #5: And then, as you think about this year and maybe over the next couple of years, maybe how to think through increasing penetration versus increasing spend per head.

Speaker #5: Thanks.

Speaker #4: We're seeing growth pretty much across states. State cohorts, I should say. So regardless of age, in terms of NGR, obviously, there's differences in terms of where that's coming from.

Jason Robins: We're seeing growth pretty much across states, you know, state cohorts, I should say, so regardless of age, in terms of NGR. Obviously, there's differences in terms, you know, of where that's coming from. And I'm sorry, what was the second part of your question?

Speaker #4: And I'm sorry, what was the second part of your question?

Stephen Grambling: How you think about increasing, whether it's a penetration of customers within a state, like what the opportunity looks like there, versus increasing spend per head?

Speaker #5: How you think about increasing whether it's penetration of customers within a state, like what the opportunity looks like there versus increasing spend per head.

Stephen Grambling: How you think about increasing, whether it's a penetration of customers within a state, like what the opportunity looks like there, versus increasing spend per head?

Speaker #4: I think it's got to be both. I mean, the reality is that especially in the older states, the customer growth is going to slow over time.

Jason Robins: I think it's got to be both. I mean, the reality is that, especially in the older states, the customer growth is going to slow over time, but we still have a lot of upside in terms of monetizing customers. Our retention numbers look great. And so as we drive that parlay mix up, as we add more things, I think you're going to continue to see increased monetization. In January, for example, our parlay handle mix was still up another 300 basis points year-over-year, so still seeing really strong growth there. So that feels like a lever that's gonna continue to, you know, produce dividends for at least the next several years. And if you look at some of the parlay mix numbers in, you know, Europe and other parts of the world, it's much higher than where we are today.

Speaker #4: But we still have a lot of upside in terms of monetizing customers. Our retention numbers look great. And so as we drive that parlay mix up, as we add more things, I think you're going to continue to see increased monetization.

Speaker #4: In January, for example, our parlay handle mix was still up another 300 bips year over year. So still seeing really strong growth there. So that feels like a lever that's going to continue to produce dividends for at least the next several years.

Speaker #4: And if you look at some of the parlay mix numbers in Europe and other parts of the world, it's much higher than what we are today.

Speaker #4: So, it seems like there's a lot of upside there. And I still think there's a ton of room to optimize promo. I mean, we are just starting to deploy AI in our promo engine in terms of optimization.

Jason Robins: So it seems like there's a lot of upside there, and I still think there's a ton of room to optimize promo. I mean, we are just starting to deploy AI in our promo engine in terms of optimization, and I think that's a huge lever for us to get more efficient and probably produce better results on the top line, too.

Speaker #4: And I think that's a huge lever for us to get more efficient, and probably produce better results on the top line, too.

Speaker #5: Great. Thanks. I'll jump back in the queue.

Stephen Grambling: Great. Thanks. I'll jump back in the queue.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Eric Sheridan from Goldman Sachs.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Eric Sheridan from Goldman Sachs.

Ben Miller: ... Thanks so much for taking the question. I just want to come back to the predictions topic and ask it maybe just from a bit of a different angle. As you think about the different outcomes that can produce return on the investments in predictions, how are you thinking about the levers of either expanding activity among existing users, widening the pool, the sort of pool of people in your platform and sort of expanding the pie on the player side? How should we be thinking about sort of it as a lever for user growth and activity growth in terms of trying to measure the return? Thanks so much.

Eric Sheridan: ... Thanks so much for taking the question. I just want to come back to the predictions topic and ask it maybe just from a bit of a different angle. As you think about the different outcomes that can produce return on the investments in predictions, how are you thinking about the levers of either expanding activity among existing users, widening the pool, the sort of pool of people in your platform and sort of expanding the pie on the player side? How should we be thinking about sort of it as a lever for user growth and activity growth in terms of trying to measure the return? Thanks so much.

Speaker #5: Thanks so much for taking the question. I just want to come back to the predictions topic and ask it maybe just from a bit of a different angle.

Speaker #5: As you think about the different outcomes that can produce return on the investments in predictions, how are you thinking about the levers of either expanding activity among existing users?

Speaker #5: Widening the sort of pool of people in your platform and sort of expanding the pie on the payer side—how should we be thinking about it as a lever for user growth and activity growth, in terms of trying to measure the return?

Speaker #5: Thanks so much.

Speaker #4: Well, since the product's so similar, it really isn't something that we see as largely incremental to our existing customers. And that's why we don't see much cannibalization from prediction operators in the states that we have been in.

Jason Robins: Well, since the product's so similar, it really isn't something that we see as largely incremental to our existing customers. And, you know, that's why we don't see much cannibalization from prediction operators in the states that we have been in. So really, for us, it's about incremental customers and other states. You know, some of the biggest states in the country, like California, Texas, Florida, we were not present in with OSB, and we have predictions there now. So those are huge opportunities for us. It was about half the country, population-wise, that we were able to launch predictions in. And so that's something, you know, really exciting. In some ways, I think of it as like, even though it's not exactly the same thing, but just to sort of paint the picture of why we're excited.

Speaker #4: So really, for us, it's about incremental customers and other states, some of the biggest states in the country like California, Texas, Florida. We were not present in with OSB, and we have predictions there now.

Speaker #4: So those are huge opportunities for us. It was about half the country, population-wise, that we were able to launch predictions in, and so that's something really exciting.

Jason Robins: So those are huge opportunities for us. It was about half the country, population-wise, that we were able to launch predictions in. And so that's something, you know, really exciting. In some ways, I think of it as like, even though it's not exactly the same thing, but just to sort of paint the picture of why we're excited.

Speaker #4: In some ways, I think of it as even though it's not exactly the same thing, but just to sort of paint the picture of why we're excited, it would be like if you told me we opened up the rest of the US overnight to some lesser version but still very strong version of sports product that could really monetize the customers and engage the customers in ways that we never were able to with fantasy sports.

Jason Robins: It would be like if you told me we opened up the rest of the US overnight, to some lesser version, but still a very strong version, of, you know, sports product that could really, you know, monetize the customers and engage the customers in ways that we never were able to with fantasy sports.

Speaker #5: Perfect. Thank you.

Ben Miller: Perfect. Thank you.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Ben Chaykin from Mizuho.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Ben Chaiken from Mizuho.

Speaker #5: Hey, how's it going? Thanks for taking my question. Just one on predictions. Jason, how do you plan to build liquidity in the real bird exchange?

Ben Chaiken: Hey, how's it going? Thanks for taking my question. Just one on predictions. Jason, how do you plan to build liquidity in the Railbird exchange? And maybe related, do you view the DraftKings OSB platform as a competitive differentiator in this context? Thanks.

Speaker #5: And maybe related, do you view the DraftKings OSB platform as a competitive differentiator in this context? Thanks.

Jason Robins: I think, you know, the second one helps answer first. Absolutely, it's a competitive differentiator. I mean, everything from our pricing models to our, you know, data science around player behaviors, to our vast, you know, array of marketing and data behind that. We just have so much infrastructure and so much data to be able to build on and leverage, and I think that, you know, given the similarities of the products, it's going to be hugely advantageous for us. In terms of, you know, the liquidity question, I think, first of all, you know, virtually every market maker out there is, you know, lining up at the door trying to get set up for Railbird. Obviously, they know we've come to really be aggressive in play here, so they're pretty excited.

Speaker #4: I think the second one helps answer the first. Absolutely, it's a competitive differentiator. I mean, everything from our pricing models to our data science around player behaviors to our vast array of marketing and data behind that—we just have so much infrastructure and so much data to be able to build on and leverage, and I think that given the similarities of the products, it's going to be hugely advantageous for us.

Speaker #4: In terms of the liquidity question, I think first of all, virtually every market maker out there is lining up at the door trying to get set up for real bird.

Speaker #4: Obviously, they know we've come to really be aggressive in play here. So they're pretty excited. So we're going to have all the same market makers that you see on other platforms.

Jason Robins: So we're going to have all the same market makers that you see on other platforms. And then I think the DraftKings market maker is going to be a real differentiator in terms of creating liquidity, particularly in some of the new types of markets, and combo type of markets that we set up. And again, because we have the pricing models, because we have the trading desk, we have all the things that you need already, we should be able to really quickly become one of the largest, if not the largest market makers out there. So I think that gives us a huge advantage in terms of supply and liquidity, and we haven't decided yet how many exchanges we want to operate on and exactly how we want to do that, but we'll definitely be operating our market maker on Railbird.

Speaker #4: And then I think the DraftKings market maker is going to be a real differentiator in terms of creating liquidity, particularly in some of the new types of markets and combo type of markets that we set up.

Speaker #4: And again, because we have the pricing models, because we have the trading desk, we have all the things that you need already, we should be able to really quickly become one of the largest, if not the largest, market makers out there.

Jason Robins: So I think that gives us a huge advantage in terms of supply and liquidity, and we haven't decided yet how many exchanges we want to operate on and exactly how we want to do that, but we'll definitely be operating our market maker on Railbird.

Speaker #4: So I think that gives us a huge advantage in terms of supply and liquidity. And we haven't decided yet how many exchanges we want to operate on, and exactly how we want to do that.

Speaker #4: But we'll definitely be operating our market maker on Real Bird.

Speaker #5: Thank you. That's helpful.

Ben Chaiken: Thank you. That's helpful.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Brant Montour from Barclays.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Brandt Montour from Barclays.

Speaker #6: Hey, good morning, everybody. Thanks for taking my question. So, on prediction markets, could you guys help us with just what you spent or what you achieved, sort of in late December post the launch?

Ben Miller: Good morning, everybody. Thanks for taking my question. So on prediction markets, could you guys help us with just what you spent or what you achieved sort of in late December post the launch? You know, why wasn't it very splashy? And then when you think about your advertising plan here going forward, how do you get around the fact that most of your work over the last few years has been more national advertising, but this is obviously going to be different with, with you know, obviously a lot of legal OSB states that you wouldn't necessarily want to be advertising prediction markets in those markets, or maybe you would. So maybe you could help us with that. Thank you.

Brandt Montour: Good morning, everybody. Thanks for taking my question. So on prediction markets, could you guys help us with just what you spent or what you achieved sort of in late December post the launch? You know, why wasn't it very splashy? And then when you think about your advertising plan here going forward, how do you get around the fact that most of your work over the last few years has been more national advertising, but this is obviously going to be different with, with you know, obviously a lot of legal OSB states that you wouldn't necessarily want to be advertising prediction markets in those markets, or maybe you would. So maybe you could help us with that. Thank you.

Speaker #6: Why wasn't it very splashy? And then when you think about your advertising plan here going forward, how do you get around the fact that most of your most of your work over the last few years has been more national advertising, but this is obviously going to be different with obviously a lot of legal OSB states that you wouldn't necessarily want to be advertising prediction markets in those markets or maybe you would.

Speaker #6: So maybe you could help us with that. Thank you.

Jason Robins: So when we first launched the product in December, it was very bare bones. It still is, frankly, but we've added a lot over the last few weeks. But, you know, we wanted to make sure, obviously, that we had a product that we felt was competitive, which we really are starting to feel like now. And then also, as we start to launch Railbird, which is coming next quarter, and you start to, you know, put more through our fully integrated stack, we're going to capture more of the economics, and that helps a lot, too, to get the returns that you want on the marketing spend.

Speaker #4: So, when we first launched the product in December, it was very bare bones. It still is, frankly, but we've added a lot over the last few weeks.

Speaker #4: But we wanted to make sure, obviously, that we had a product that we felt was competitive, which we really are starting to feel like now.

Speaker #4: And then also as we start to launch real bird, which is coming next quarter, and you start to put more through our fully integrated stack, we're going to capture more of the economics and that helps a lot too to get the returns that you want on the marketing spend.

Jason Robins: But you know, for us, it's really about having the best product and making sure that when we really come and start being more aggressive, that we feel like we have, you know, a very strong offering out there. And I don't think we're far off from that. In terms of the question around, you know, marketing, I think this is actually a huge advantage of ours. Most customers don't really even understand the difference. So I think the national marketing footprint is a big advantage because we can, you know, drive people towards our product, and we can use it in ways that we can rotate messages and have slightly different things. But in essence, it's the same general message to the customer, and I think that provides us a ton of leverage and synergy. It'll drive value to both products at the same time.

Speaker #4: But for us, it's really about having the best product and making sure that when we really come and start being more aggressive, that we feel like we have a very strong offering out there.

Speaker #4: And I don't think we're far off from that. In terms of the question around marketing, I think this is actually a huge advantage of ours.

Speaker #4: Most customers don't really even understand the difference. So I think the national marketing footprint is a big advantage because we can drive people towards our product and we can use it in ways that we can rotate messages and have slightly different things, but in essence, it's the same general message to the customer.

Speaker #4: And I think that provides us a ton of leverage and synergy. It'll drive value to both products at the same time. And we actually have a lot more detail on that, because I know it sounds a little opaque now, but we have a very clear strategy that we're going to lay out at our Investor Day.

Jason Robins: We actually have a lot more detail on that, because I know it sounds a little opaque now, but we have a very clear strategy that we're going to lay out at our Investor Day. I don't want to spoil it now, but I'm pretty excited about it, that I think will answer your question directly on how we can really leverage that spend and get a huge synergy out of the national marketing spend that we have already.

Speaker #4: I don't want to spoil it now, but I'm pretty excited about it, and I think it will answer your question directly on how we can really leverage that spend and get a huge synergy out of the national marketing spend that we have already.

Speaker #6: Thanks, Jason.

Ben Miller: Thanks, Jason.

Jason Robins: Thanks, Jason.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Trey Bowers from Wells Fargo.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Trey Bowers from Wells Fargo.

Speaker #7: Hey, guys. I was wondering if you'd be willing to just kind of break down, in a little more granularity, the revenue guide. Is it kind of an expectation of a certain level of handle all year, and then different levels of hold and promo against that?

Justin Bowers: ...Hey, guys. I was wondering if you'd be willing to just kind of break down a little more granularity around the revenue guide. Is it kind of an expectation of a certain level of handle all year and then different levels of hold and promo against that? Or I know you said, you've said that there's too much focus on handle, but I think the investors would love to get a sense of kind of the, the high end and the low end of the range, what went into that? Thanks.

Trey Bowers: ...Hey, guys. I was wondering if you'd be willing to just kind of break down a little more granularity around the revenue guide. Is it kind of an expectation of a certain level of handle all year and then different levels of hold and promo against that? Or I know you said, you've said that there's too much focus on handle, but I think the investors would love to get a sense of kind of the, the high end and the low end of the range, what went into that? Thanks.

Speaker #7: Or I know you said you've said that there's too much focus on to get a sense of kind of the high end and the low end of the range went into that.

Speaker #7: Thanks.

Speaker #4: Yeah, it's tricky because you can build it up that way, but then what happens is you're going to have periods throughout the year that you hold higher, and you have less promo; that handle is a little bit lower.

Jason Robins: Yeah, you know, it's tricky because you can build it up that way, but then what happens is you're going to have periods throughout the year that you hold higher and you have less promo, that handle is a little bit lower, and then you're going to have periods where there's customer-friendly outcomes or promos hit more, and that ends up pushing handle. So I think we feel much more comfortable in sort of the, you know, some product of all this. I think, by the way, that was part of where we messed up going into 2025, that we've gotten a lot smarter on, is we had this sequential, you know, we're going to get this much handle and this much hold rate improvement from all the parlay mix, and we're going to cut promo by this much.

Speaker #4: And then you're going to have periods where there's customer-friendly outcomes or promos hit more, and that ends up pushing handle. So I think we feel much more comfortable in sort of the sum product of all this.

Speaker #4: I think, by the way, that was part of where we messed up going into 2025, that we've gotten a lot smarter on as we had this sequential.

Speaker #4: We're going to get this much handle and this much hold rate improvement from all the parlay mix, and we're going to cut promo by this much.

Speaker #4: Failing to maybe account for the fact that when you cut promo, even if it's efficient, sorry, even if it's inefficient when you cut promo, you're going to have some impact and when you hold better, whether it's because of outcomes or because of more parlay mix, it's going to have some impact on handle too.

Jason Robins: Failing to maybe account for the fact that when you cut promo, you know, even if it's efficient, even if it's inefficient, when you cut promo, you're going to have some impact. And when you, you know, hold better, whether it's because of outcomes or because of more parlay mix, it's going to have some impact on handle, too. Obviously, you know, the net is still very positive for us. If you look at it, you know, we had a huge growth year in terms of revenue. But, you know, those things do move in tandem. So we can build it up that way, but I think the big difference now is we're sort of looking at it, you know, these things all interact together. And if we have plans to raise, hold, and to cut promo, yes, that'll have an impact on handle.

Speaker #4: Obviously, the net is still very positive for us if you look at it. We had a huge growth year in terms of revenue. But those things do move in tandem.

Speaker #4: So we can build it up that way, but I think the big difference now as we're sort of looking at it, these things all interact together.

Speaker #4: And if we have plans to raise hold and to cut promo, yes, that'll have an impact on handle. It doesn't always play out that way, though, because of outcomes and other things that cause variance.

Jason Robins: It doesn't always play out that way, though, because of outcomes and other things that cause variance.

Speaker #7: And I guess, just a quick follow-up. The monthly unique player number was flat year-over-year. You called out that Jackpocket was down, but can you guys just give a little more color around how that number should trend over time, and if that's even the right KPI to look at? I would really be curious, just kind of thinking about player counts and further penetration into your younger states.

Justin Bowers: I guess just a quick follow-up. The monthly unique player number was flat year-over-year. You called out that Jackpocket was down, but can you guys just give a little more color around how that number should trend over time? And if that's even the right KPI to look at, or would really be curious, just kind of thinking about player counts and further penetration into kind of your younger states. Thanks.

Trey Bowers: I guess just a quick follow-up. The monthly unique player number was flat year-over-year. You called out that Jackpocket was down, but can you guys just give a little more color around how that number should trend over time? And if that's even the right KPI to look at, or would really be curious, just kind of thinking about player counts and further penetration into kind of your younger states. Thanks.

Speaker #7: Thanks.

Speaker #4: Yeah, so for those who remember, it feels like a long time ago, but 2024—the theme of the year for us was just significant outperformance on customer acquisition.

Jason Robins: Yeah. So for those who remember, feels like a long time ago, but 2024, you know, the theme of the year for us was just significant outperformance on customer acquisition, and that just was way more than we expected. Customer acquisition came back down to earth a little bit in 2025. You know, it was definitely still healthy, but it was a big drop from where we were in 2024, and more in line with where we thought we would be properly going into 2024. So good year, but with lower customer acquisition, you're going to see MUP decline because a lot of the early you know, basically a new customer counts in the MUPs as you're getting them all year, and then a lot of those new customers churn.

Speaker #4: And that just was way more than we expected. Customer acquisition came back down to earth a little bit in 2025. It was definitely still healthy, but it was a big drop from where we were in 2024 and more in line with where we thought we would be probably going into 2024.

Speaker #4: So, good year, but with lower customer acquisition, you're going to see MUP decline because a lot of the early—basically, new customer counts in the MUPs—as you're getting them all year, and then a lot of those new customers churn.

Speaker #4: And then, once they've gotten through that early churn period, the retention numbers are really high. And of course, from a revenue retention standpoint, we're still seeing over 100% retention each year after a new user cohort is acquired.

Jason Robins: And then once they've gotten through that early churn period, the retention numbers are really high. And of course, from a revenue retention standpoint, we're still seeing over 100% retention each year, after a new year user cohort is acquired. So really healthy on that front. But if you look at MUPs, you're going to see a real impact from customer acquisition. And obviously, Jackpocket had a bit of an impact, too, with Texas and some of the other things. So, you know, if you take that away, we had about 5% growth in MUPs.

Speaker #4: So really healthy on that front. But if you look at MUPs, you're going to see a real impact from customer acquisition. And then, obviously, Jackpocket had a bit of an impact too with Texas and some of the other things.

Speaker #4: So if you take that away, we had about 5% growth in mups.

Speaker #7: All right. Thanks.

Justin Bowers: All right, thanks.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Robert Fishman from Moffitt.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Robert Fishman from MoffettNathanson.

Robert Fishman: Good morning. Can you talk about how you would characterize the competitive environment and promotional intensity today and expectations may be baked in for the year ahead, both in OSB and prediction players? And then separately, can you just update us on the legislative front and whether prediction markets are pushing more states to start to consider legalizing OSB? Thank you.

Speaker #8: Good morning. Can you talk about how you would characterize the competitive environment and promotional intensity today and expectations maybe baked in for the year ahead both in OSB and prediction players?

Speaker #8: And then separately, can you just update us on the legislative front and whether prediction markets are pushing more states to start to consider legalizing OSB?

Speaker #8: Thank you.

Speaker #4: So first question, I think it's a very rational competitive environment from a promo standpoint right now. Promo is not a huge thing in prediction.

Jason Robins: So first question, I think it's a very rational, competitive environment from a promo standpoint right now. Promo is not a huge thing in prediction, so really where we see some of the things happening there is more on the external marketing spend side, but really rational in terms of promo levels at the moment. Obviously, we, you know, said we have a conservative guide, so we're prepared if things change and, you know, we'll be able to deploy more. But as of now, we do think we have some cushion on the promo front in there. And then, you know... Sorry, what was the second question?

Speaker #4: So really, where we see some of the things happening there is more on the external marketing spend side. But really, rational in terms of promo levels at the moment.

Speaker #4: Obviously, we said we have a conservative guide, so we're prepared if things change and we'll be able to deploy more. But as of now, we do think we have some cushion on the promo front in there.

Speaker #4: And then sorry, what was the second question?

Speaker #8: Just around the legislative front for prediction markets.

Robert Fishman: Just around the legislative front for prediction markets.

Jason Robins: Oh! Yeah, I mean, so definitely getting traction on that. I think also with tax increases, we are getting a lot of traction pushing back there. You know, my view, states would be absolutely crazy right now to raise OSB taxes with everything going on with predictions. So definitely getting some good traction on both that and on future legalization. Hard to know yet, because we're still in the midst of the sessions, whether it's going to make a difference in pushing any new bills over the line, but I am optimistic from what I'm hearing. I mean, it is definitely a point of discussion in the States, and I think something they're taking very seriously. So, you know, I wouldn't be surprised if that's the difference between getting, you know, a state or two done this year or not.

Speaker #4: Yeah, I mean, so definitely getting traction on that. I think also, with tax increases, we were getting a lot of traction pushing back there.

Speaker #4: My view, states would be absolutely crazy right now to raise OSB taxes with everything going on with predictions. So definitely getting some good traction on both that and on future legalization.

Speaker #4: Hard to know yet because we're still in the midst of the sessions, whether it's going to make a difference in pushing any new bills over the line.

Speaker #4: But I am optimistic from what I'm hearing. I mean, it is definitely a point of discussion in the states, and I think it's something they're taking very seriously.

Speaker #4: So I wouldn't be surprised if that's the difference between getting a state or two done this year or not.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Robin Farley from UBS.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Robin Farley from UBS.

Robin Farley: Great. Thank you. I wonder if you could help us understand. I know you said you're not including prediction markets roadmap in your guidance, but in the EBITDA number, how much of that is a built-in EBITDA loss? Can you help us, you know, quantify for your prediction markets startup costs so that we could think about the EBITDA from your, you know, your core business? And also, there was something in the language of your guidance that was about line of sight states or something that seemed to imply you were including some startup costs for new states in your EBITDA guidance, which I think you haven't done in your more recent guidance, but maybe you can clarify if that's what was in there. Thanks.

Speaker #9: Great, thank you. I wonder if you could help us understand. I know you said you're not including prediction market growth in your guide, but in the EBITDA number, how much of that is a built-in EBITDA loss?

Speaker #9: Can you help us quantify, for your prediction markets, startup costs so that we could think about the EBITDA from your core business? And also, there was something in the language of your guidance about 'line of sight states' or something that seemed to imply you were including some startup costs for new states in your EBITDA guidance, which I think you haven't done in your more recent guidance, but maybe you can clarify if that's what was in there.

Speaker #9: Thanks.

Speaker #4: Yeah. So on the latter question, good catch, Robin. We did put main iGaming as well as Alberta in there. So there is some spend allocated to those states.

Jason Robins: Yeah. So on the latter question, good catch, Robin. We did put Maine iGaming as well as Alberta in there. So, you know, there is some spend allocated to those dates. We don't have exact timing on launch yet, but we feel certain enough that they're around the corner, that we were able to quantify appropriately and put it in there. In terms of the predictions question, no revenue, as you noted, is in the guide. So, you know, not assuming we're gonna get anything on the revenue side. From, you know, a spend perspective, I'll break it out into kinda two categories. There's fixed cost, which is, you know, double digits, but not, you know, that significant. There's mostly, you know, existing headcount that we can repurpose.

Speaker #4: We don't have the exact timing on launch yet, but we feel certain enough that they're around the corner that we were able to quantify appropriately and put it in there.

Speaker #4: In terms of the predictions question, no revenue, as you noted, is in the guide. So, not assuming we're going to get anything on the revenue side.

Jason Robins: So, you know, not assuming we're gonna get anything on the revenue side. From, you know, a spend perspective, I'll break it out into kinda two categories. There's fixed cost, which is, you know, double digits, but not, you know, that significant. There's mostly, you know, existing headcount that we can repurpose.

Speaker #4: From a spend perspective, I'll break it out into kind of two categories. There's fixed cost, which is double digits, but not that significant. There's mostly existing headcount that we can repurpose.

Speaker #4: And there is a lot of new headcount too that we had to hire. So there is something there. But there's a lot of synergy also with some of the things we talked about in terms of the pricing models and other components of the business that we've built and the people operating those.

Jason Robins: And there is a lot of new headcount too, that we had to hire, so there is something there. But there's a lot of, you know, synergy also with some of the things we talked about in terms of the, you know, pricing models and other components of the business that we've built and the people operating those, so it won't be entirely incremental. It'll be $ tens of millions. And then I think marketing, we're expecting to spend, so there is some incremental marketing there. For competitive purposes, I don't wanna give an exact number. But as I also noted, I think a huge advantage we're gonna have is that we can repurpose some of our national spend, and we can also utilize some of our national spend to drive both OSB and prediction simultaneously.

Speaker #4: So it won't be entirely incremental. It'll be tens of millions. And then I think marketing, we're expecting to spend. So there is some incremental marketing there for competitive purposes.

Jason Robins: And then I think marketing, we're expecting to spend, so there is some incremental marketing there. For competitive purposes, I don't wanna give an exact number. But as I also noted, I think a huge advantage we're gonna have is that we can repurpose some of our national spend, and we can also utilize some of our national spend to drive both OSB and prediction simultaneously.

Speaker #4: I don't want to give an exact number. But as I also noted, I think a huge advantage we're going to have is that we can repurpose some of our national spend, and we can also utilize some of our national spend to drive both OSB and prediction simultaneously.

Speaker #4: And we're going to talk a lot more about our strategy for that, which is really a big strategy unveiled across product and marketing and a bunch of other things on Investor Day, which I think will better explain how we're approaching marketing.

Jason Robins: We're gonna talk a lot more about our strategy for that, which is really, you know, a big strategy unveil across product and marketing, a bunch of other things on Investor Day, which I think will better explain how we're approaching marketing, and at that point, we'll have more specifics on this.

Speaker #4: And at that point, we'll have more specifics on this.

Robin Farley: Well, I appreciate that. Just a quick follow-up question. You mentioned you call it combination trading options, which I guess is like, you know, say, the equivalent of like a parlay offering in prediction markets. Can you talk about, you know, whether the fact that you have the sports data, that at the moment, I think the other prediction market, prediction markets don't have access to or aren't able to purchase because of, you know, sort of gaming license regulatory reasons. It seems like that would be a huge advantage that you have that data already, and would. That, I mean, in other words, isn't that a major advantage over prediction markets that wouldn't be able to access that data to create their own parlays?

Speaker #9: Well, I appreciate that. Just a quick follow-up question. You mentioned you call it 'combination trading options,' which I guess would be sort of equivalent to a parlay offering.

Speaker #9: And in prediction markets, can you talk about whether the fact that you have the sports data that, at the moment, I think the other prediction markets don't have access to or aren't able to purchase because of sort of gaming license regulatory reasons.

Speaker #9: It seems like that would be a huge advantage that your have that data already and that I mean, in other words, isn't that a major advantage over prediction markets that wouldn't be able to access that data to create their own parlays?

Speaker #4: Oh, I think both that data, as well as our vast historical database that we've built all of our pricing on. Remember, it's been years that we've been investing and building our pricing models to take all of this in-house.

Jason Robins: Oh, I think both that data as well as our vast historical database that we've built all of our pricing. Remember, it's been years that we've been investing and building our pricing models to take all of this in-house. We bought SBTech and integrated in 2021. It wasn't until basically last year when we finally brought all of the major sports and all of the major markets in-house. So it takes time to amass that type of database. It takes time to build those models and really hone those models so that they're working at a level that's ready for prime time. We have all that already, and you're right, we have the data coming in, too. So I think from that standpoint, we're gonna be extremely well-positioned.

Speaker #4: We bought SBTech and integrated it in 2021. It wasn't until basically last year when we finally brought all of the major sports and all of the major markets in-house.

Speaker #4: So, it takes time to amass that type of database. It takes time to build those models and really hone those models so that they're working at a level that's ready for prime time.

Speaker #4: We have all that already, and you're right. We have the data coming in too. So I think from that standpoint, we're going to be extremely well positioned.

Speaker #9: Great. Thank you.

Robin Farley: Great. Thank you.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Clark Lampen from BTIG.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Clark Lampen from BTIG.

Speaker #8: Thanks for taking the question. I have one on promo. Jason, I know you said you're seeing a rational promo environment within prediction, but I'm curious—if we think about the core sportsbook market, have you seen any uptick in intensity from smaller-scale operators?

Clark Lampen: Thanks for taking the question. I have one on promo. Jason, I know you said you're seeing a rational promo environment within prediction, but I'm curious if, as we think about the core sportsbook market, have you seen any uptick in intensity from smaller scale operators? And if so, is that something that's sort of reflected in the guidance? Is there potentially room for sort of less promotional leverage built into the forecast? Thanks.

Speaker #8: And if so, is that something that's sort of reflected in the guidance? Is there potentially room for sort of less promotional leverage built into the forecast?

Speaker #8: Thanks.

Jason Robins: Well, we did build in some cushion. As I said, it's a very conservative approach to the guide, so I don't think that that is untrue, but not for the reason you're saying. We are seeing a very rational environment across both predictions and our traditional online sports betting and iGaming competitors. We have not seen a surge in promotional activity in a few years, thankfully, so hopefully, that continues.

Speaker #4: Well, we did build in some cushion, as I said, as a very conservative approach to the guide. So I don't think that that is untrue.

Speaker #4: But not for the reason you're saying. We are seeing a very rational environment across both predictions and our traditional online sports betting and iGaming competitors.

Speaker #4: We have not seen a surge in promotional activity in a few years, thankfully. So, hopefully, that continues.

Speaker #8: Okay. Alan, I guess just sort of a quick one on marketing to the extent that you do end up using a lot more of the sort of Amazon and NBC and ESPN national inventory that you have for prediction.

Clark Lampen: Okay. Alan, I guess just sort of a quick one on marketing. To the extent that you do end up using a lot more of the sort of Amazon and NBC and ESPN national inventory that you have for prediction, is there still flexibility in 2026 if you're seeing better LTVs and sort of tax and response rates from the core customers to lean in there? Or, you know, how would you, I guess, sort of assess the room to do both? Thank you.

Speaker #8: Is there still flexibility in 26 if you're seeing better LTVs and sort of CACs and response rates from the core customers to lean in there?

Speaker #8: Or how would you, I guess, sort of assess the room to do both? Thank you.

Speaker #10: Absolutely. And this is one of the reasons why we're being so measured in our rollout of prediction markets. As we start to evaluate the value of these customers, we do have flexibility to lean into marketing spend appropriately to make sure we're capturing long-term value.

Robin Farley: Absolutely, and this is one of the reasons why we're being so measured in our rollout of prediction markets. As we start to evaluate the value of these customers, we do have flexibility to lean into marketing spend appropriately to make sure we're capturing long-term value. We're, we're in this to win, and that means spending the appropriate amounts in 2026.

Alan Ellingson: Absolutely, and this is one of the reasons why we're being so measured in our rollout of prediction markets. As we start to evaluate the value of these customers, we do have flexibility to lean into marketing spend appropriately to make sure we're capturing long-term value. We're, we're in this to win, and that means spending the appropriate amounts in 2026.

Speaker #10: We're in this to win, and that means spending the appropriate amounts in 2026.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Jordan Bender from Citizens.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Jordan Bender from Citizens.

Jordan Bender: Hey, everyone. Good morning. You might get into this in more detail at the Investor Day, but a question we often get is: Who are these prediction market players? So from the two months that you've been live or your just general expectations, can you just kinda shed light on that? Are they, are they sharps? Are they whales? Do they play Pick Six? Do they play fantasy? And just a follow-up, I'm just thinking through the, the comments around maybe the, the underperformance on the handle for the NFL. Do you think that's just storyline driven and kinda match ups, or is there anything else to kinda call out in that? Thank you.

Speaker #11: Hey, everyone. Good morning. You might get into this in more detail at the invested date, but a question we often get is, who are these prediction market players?

Speaker #11: So, from the two months that you've been live, or just your general expectations, can you just kind of shed light on that? Are they sharps?

Speaker #11: Are they whales? Do they play pick six? Do they play fantasy? And just a follow-up, I'm just thinking through the comments around maybe the underperformance on the handle for the NFL.

Speaker #11: Do you think that's just storyline-driven and kind in that? Thank you.

Speaker #4: Yeah, I mean, the most common theme we're seeing with prediction players is they tend to be Californians and Texans. So I think that's really the big theme.

Jason Robins: Yeah, I mean, the most common theme we're seeing with prediction players is they tend to be Californians and Texans. So, you know, I think that's really the big theme. Otherwise, they look a lot like our existing customers. I'm sorry, what was the second question?

Speaker #4: Otherwise, they look a lot like our existing customers. And sorry, what was the second question?

Jordan Bender: Just anything to unpack on the underperformance in handle in the NFL compared to everything else?

Speaker #11: Just anything to unpack on the underperformance and handle in the NFL compared to everything else?

Speaker #4: I mean, really, it comes down to the point I made earlier on the net, right? So we had—just a reminder, right? January through October, the first 10 months of 2025, we had about a 6.5% net revenue margin.

Jason Robins: Oh, I mean, really, it comes down to the point I made earlier on the net, right? So, just a reminder, right, January through October, first 10 months of 2025, we had about a 6.5% Net Revenue Margin. That was, you know, then since then, it has been over 9%, which is a 40% increase. So you're gonna see some changes to handle when your revenue is going up that much from other levers. That's the biggest thing. I think another point of evidence in that is if you look at the non-NFL sports, they're actually up double digits in handle growth. We haven't been holding in promo, we haven't had as strong Net Revenue Margins there.

Speaker #4: That was then. Since then, it has been over 9%, which is a 40% increase. So you're going to see some changes to handle when your revenue is going up that much from other levers.

Speaker #4: That's the biggest thing. I think another point of evidence in that is if you look at the non-NFL sports, they're actually up double digits in handle growth.

Speaker #4: We haven't been holding in promo. We haven't had as strong a net revenue margins there. Obviously, there's some player crossover. And if you split it out from players, they're not playing NFL and are just playing those.

Jason Robins: Obviously, there's some player crossover, and if you split it out from players that are not playing NFL and are just playing those, their Handle's up even more. So it really clearly points towards there's just fluctuations in Handle. But even despite that, we're still growing Handle right now. I mean, January Handle was up. We had Handle growing in the high teens, after we had some low whole weeks to start NFL earlier in the season. But overall, really, you have to look at the kind of net revenue, and like I said, you're not going to see, you know, zero effect to Handle when you increase your Net Revenue Margin for at 40% over a 4-month period after 10 months of holding, of having it at 6.5%.

Speaker #4: Their handle is up even more. So really, clearly points towards there's just fluctuations in handle. But even despite that, we're still growing handle right now.

Speaker #4: I mean, January handle was up. We had handle growing in the high teens after we had some low-hole weeks to start NFL earlier in the season.

Speaker #4: But overall, really, you have to look at the kind of net revenue, and, like I said, you're not going to see zero effect to handle when you increase your net revenue margin to 40% over a four-month period after 10 months of having it at 6.5%.

Speaker #11: Thanks, Jason.

Alan Ellingson: Thanks, Jason.

Speaker #2: Thank you. At this time, I would now like to turn the conference back over to Jason Robins, CEO, for closing remarks.

Operator: Thank you. At this time, I would now like to turn the conference back over to Jason Robins, CEO, for closing remarks.

Speaker #12: Thank you all for joining today's call. We are really excited and positioned really well for success in the future. Please join us at our virtual Investor Day coming up in March.

Jason Robins: Thank you all for joining today's call. We are really excited and positioned really well for success in the future. Please join us at our virtual Investor Day coming up in March. We have a lot of exciting new things to unveil there, including our strategy for winning in predictions. Hope to see you all there. Thank you, and be well.

Speaker #12: We have a lot of exciting new things to unveil there, including our strategy for winning in predictions. Hope to see you all there. Thank you, and be well.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

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