• Stock slumps late Thursday on news of downwardly revised 2025 EBITDA, revenue forecasts.
• Updated outlook includes addition of Missouri sports betting and DraftKings Predictions.

Extending a now lengthy slide, shares of DraftKings (NASDAQ: DKNG) tumbled during Thursday’s after-hours session after pared its 2025 financial outlook.

DraftKings stock highlighted at the Nasdaq market site in New York. The gaming company lowered its 2025 guidance today. (Image: X)

In conjunction with the release of its third-quarter results, the online sportsbook giant said it now expects 2025 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $450 million to $550 million on revenue of $5.9 billion to $6.1 billion. That compares with previously issued estimates of EBITDA of $800 million to $900 million on revenue of $6.2 billion to $6.4 billion.

The company’s guidance includes anticipated financial impacts from DraftKings launching mobile sports betting in Missouri later this year,” according to a statement. “The company’s guidance for fiscal year 2025 now includes the expected launch of DraftKings Predictions in the coming months, pending licensure.”

The gaming company didn’t elaborate on why it lowered its 2025 financial outlook and it probably doesn’t need to because it’s widely documented that online sports betting (OSB) operators were pinched by more client-friendly NFL outcomes in the third quarter — a scenario that has reportedly seeped into the current quarter.

DraftKings Doubles Share Buyback Plan

Shares of DraftKings are off 20.57% over the past month, a decline that has invited ample criticism on social media by the company’s large cadre of retail investors, but the operator has taken steps to allay those concerns.

“We continue to focus on maximizing shareholder returns and are pleased to announce that our board authorized an increase in our share repurchase program from $1.0 billion to $2.0 billion,” said CFO Alan Ellingson in the press release.

Investors are likely hoping DraftKings rapidly deploys some of that buyback ammunition right away due to the depressed stock price and because it appears as though shares are being issued to fund a portion of the Railbird deal.

ESPN Deal in Focus

DraftKings’ earnings press release didn’t contain any comments on the company’s newly formed deal with ESPN through which the gaming company is essentially replacing Penn Entertainment (NASDAQ: PENN) as the network’s partner on ESPN Bet. That news broke earlier today.

“DraftKings will also play a major role across ESPN’s digital platforms. DraftKings will power the betting tab within the ESPN app and their customers will receive special promotions for ESPN Unlimited, ESPN’s newly launched direct-to-consumer product,” according to the companie.

Analysts and investors are likely to focus intently on what DraftKings’ capital commitments will be to the ESPN relationship and if the issuance of equity will be involved because that could represent further dilution to current shareholders.

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