Good morning, thank you for joining DraftKings 2026 Investor Day. I am Joseph DeCristofaro, Head of Investor Relations at DraftKings, and we are thrilled to have you join us today. DraftKings is entering its next phase of growth. Our opportunity is large and expanding. At the same time, our LTV flywheel is getting faster and more efficient as we raise our standards across product, technology, trust, and marketing by increasing our deployment of machine learning and AI. Today, you'll hear directly from the leaders driving our business forward. We will move quickly and stay tight to what matters most. First, I need to cover our safe harbor statement and non-GAAP disclosures.
Certain statements we make during today's remarks 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 will also refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are available in the financial reconciliation section of today's presentation. With that, I'll turn it over to our CEO and co-founder, Jason Robins.
Thanks, Mike. I wanna start by talking about how DraftKings has truly become one of the preeminent digital platforms in entertainment. We have many, many products, different brands, 11 million customers, $6 billion in revenue, $620 million last year in Adjusted EBITDA, and nearly 6,000 employees. Megatrends are absolutely exploding in digital entertainment. DraftKings stands to benefit from what will for many years be continuing engagement with sports, entertainment, interactive, mobile, and many other things that are really truly lined up for DraftKings to capitalize on this coming generation's consumer. We're a founder-led company. That makes a huge difference.
We have an entrepreneurial culture, we hold people to a very high standard, we are relentless in our competitiveness, we are willing to take smart and calculated risks, and that is truly a huge advantage for us in a world where many, many of these companies are not led by founders. We have a proven track record of winning share and launching different products. For those who don't know, DraftKings actually was not initially a sportsbook. We launched as a daily fantasy sports company. After being probably the 25th company to launch in this space, through a series of product-led innovations and customer centricity, we were able to capture the number one position in daily fantasy sports. When PASPA was first repealed, I remember everyone saying to me, "There's no way DraftKings is going to be able to compete in sportsbook.
There are so many other companies that are more experienced in this space. We knew how to market and build products for this consumer, and sure enough, we did. Now we have far more share than we were even initially predicting a few years ago in sportsbook, and our share has been growing over the last year. After that, we launched iGaming.
Everyone thought of us as a sports company, and no one thought we could succeed in iGaming either, but we have done so as well. We now hold the second highest share in iGaming and see a huge amount of potential with further legalization and expansion across the US. Since then, we've launched other products, most recently our predictions app, which we are very excited about, and I'll talk to you a little bit more about in a moment.
DraftKings is a company that pours over many metrics, from financial metrics to customer behavioral metrics. These are things that guide our decisions and help us be smart in how we approach our day-to-day jobs. Three key ones that we follow at a macro level are customers, revenue, and Adjusted EBITDA.
Those have each been growing substantially over the last several years, and with many more things coming, including we anticipate additional legalization and of course the innovation of predictions that's happening right now, we expect to see more growth across these key metrics for several years to come. Next, I wanna show a brief highlight reel to show some of the things that we have done and who DraftKings truly is as a company.
At DraftKings, winning isn't just a philosophy, it's in our DNA. From dominating daily fantasy sports to becoming the first vertically integrated US-based sports betting and online gaming company, we've grown into a category-defining powerhouse. With 11 million players and over $6 billion in revenue. It hasn't always been an easy road.
This company, over its 10-year history, has really been quite resilient.
Jason and his team's track record has been to succeed out of the darkest times.
Every single time the chips are down, we innovate our way out of it.
That's that extra grit. In order to make it and make it really successful, you gotta have that. If it were too easy, I don't know if we would be as strong as we are today.
We've come from behind before, and we'll continue to do whatever it takes to be number one because we embrace change and thrive through disruption. A winning mentality doesn't mean resting on past accomplishments either. With analytics as our guide, best-in-class marketing, and a data-driven approach to everything we do, our first-rate team is relentless in the pursuit of being the best, staying the best, and offering the best.
This mindset has positioned us to generate positive adjusted EBITDA, positive free cash flow, positive net income, and invest in ways to stay ahead of the game while providing the best experience for our customers. Every innovation, every decision, every interaction is driven by our commitment to provide a seamless experience end to end that keeps our customers engaged, excited, and connected to the action however they want, while ensuring safe and responsible play.
DraftKings is leading. We're setting a standard. We're inspiring confidence, proving that responsible play is the foundation of lasting success.
Customer satisfaction, at the end of the day, is why we stay.
Someone is there for me. There's the human connection behind it.
Even though you're a tech company. That relationship element made it worth sticking with DraftKings exclusively.
With consumers engaging digitally more now than ever before, sports viewership on the rise, and betting becoming more mainstream, DraftKings is positioned at the center of digital entertainment. Year after year, we've really just kept steadily building a more capable, powerful company.
Number one has been our goal, always will be, and I don't think we'll be satisfied until we have created the biggest company we possibly can.
Success isn't just about today, it's about what comes next. That's why we're building for the future, to keep delivering for our customers and winning for shareholders in 2026 and beyond.
In each of the categories in which we compete, we have achieved strong share, that is really due to four key sustainable competitive advantages. First is product. Product is at the heart of what we do, we believe it is the core pillar of customer centricity. Customers, especially in the digital world, want the best product, with low switching costs, they will always look at the best product as the most important thing. Number two is our technology. Our technology obviously powers our product and is why we can quickly develop and iterate rapidly. We often start with MVPs and rapidly improve products if you look at the progress we've made in our sportsbook app, for example, over the last few years, it has been about 10 years worth of innovation in a span of maybe three to four .
Technology, however, also powers many other things we do, from building great data environments that enable strong analytics to now using AI to transform many areas of the way we operate in our business. Third is trust. Trust is something that we really take seriously, and it is the most important thing, not just for our relationship with our customers, but also many other stakeholders, for example, our regulators. Our customers trust us, and that is why we have such a strong brand. They know we will deliver high-quality product experiences. They know we will be there for them, and they know that their money and their account information is safe. Second, with regulators, they trust us to perform in a compliant manner and to follow the laws and rules of each state that we operate in, and now under Predictions under the rules of the CFTC.
We have many other audiences, too, where trust is key, from our league partners and media partners to our employees. Trust is very much at the core of everything DraftKings stands for. Fourth is marketing. Marketing is a huge part of why we are successful because it powers our acquisition and LTV flywheel. We bring in customers at efficient rates, we acquire them at high levels of scale. It's easy to acquire with a low CAC at a low level of scale. It is hard to acquire millions of customers every year efficiently the way DraftKings does. Once they are in our flywheel, our CRM systems and other marketing channels continue to add LTV by engaging our customers with new products, new things, ideas, promotions, all sorts of stuff.
Those are the things that keep our customers coming back to our great product every day. That is one of the key reasons why DraftKings stands apart from the competition. As I noted earlier, LTV is a core advantage of ours. It starts with great retention. Many other parts of our monetization engine have been honed over the recent years. We've now built a real flywheel that we can plug customers into. Those customers become engaged, truly love our products. Generate significant long-term retention, loyalty, and high LTVs. Higher LTV, of course, translates to growing gross profit. Last year, we achieved $2.7 billion in gross profit. This is a huge milestone for a company that only a few years ago was well below that in revenue.
Now I wanna talk about a new topic, how we are going to win, not just in sports betting, not just in predictions, but in sports everywhere. It starts with taking one of our greatest assets, our green app, DraftKings Sportsbook and Casino, which we are renaming DraftKings Sports and Casino. This new Super App is already our biggest app, getting about 80%-90% of our 11 million customers in there each year. We know how to drive traffic there. We know how to engage customers there. Now we are going to have both Sportsbook and predictions in this app. Depending on which state you're in, you will get a different experience. This unlocks several really important advantages for DraftKings. First, it allows us to dramatically expand our offering. We will now have a sports product everywhere for customers across the entire country.
Number two, it allows us to leverage our huge scale with our brand and our marketing footprint. All of our national marketing now will be working across the entire country instead of across a subset of states where we have sports betting. Lastly, it allows us to truly integrate across product, not only bringing great promos and great things within sports, but also casino and many other products that we offer as well will be available in this app. Next, I wanna show you a short video that will give you more detail on how this comes to life
Hit me. It's wet.
DraftKings is built for sports fans, now our market-leading sports product will be available everywhere, unlocking the full power of the DraftKings brand for sports fans, no matter where they are. We're introducing the Super App, a unified product where Sportsbook and Predictions live under one roof, delivering the ultimate sports content experience. The new experience just works. Any state, the best sports content available. Same DraftKings look and feel, now integrated into a single user experience that intelligently prioritizes the right content for the right customer in the right location. We're delivering premium sports markets, combos, and offers no matter where you are.
We'll leverage what we've built, a proprietary sports trading, pricing, and data platform, so that for key sports moments like Monday Night Football, our fans will get the deepest content and market combinability alongside our authentic sports user experience with promotions made for the sports fan. We're taking our learnings from sports bettors and applying them to predictions so that our sports customers everywhere can enjoy familiar features like combos that are easy and fun to use. The global sports experience is seamless.
Customers don't have to choose their product. They simply download the Super App and are met with the best sports offering possible. It's not just sports. In the Super App, customers nationwide can engage with content like pop culture and elections and more. More than that, our industry-leading casino and lottery products will be fully integrated in the Super App for customers in available states, offering a fully native experience tailored to who you are and what you love.
Wait, you're telling me I'm gonna be able to bet sports in New York, trade in L.A., play casino in Philly, and play Powerball all in one app? I've never heard of anything like that.
This is the DraftKings Super App, a unified sports experience at national scale. We'll marry our technology, our brand, our reach, and our authentic understanding of the sports customer to win with sports fans nationwide.
I now wanna turn it over to Janine, who is going to go through more detail on how we are going to execute a strategy that will allow us to win in predictions.
Thank you, Jason. I'm Janine Hightower-Sellitto, General Manager of Predictions at DraftKings. Our strategy to win in Predictions will largely follow our Sportsbook playbook. We will be vertically integrated, leverage our proprietary sports pricing and trading capabilities. We have a deep understanding of sports customers, we have premier national marketing assets.
These advantages have driven our success in Sportsbook, now in Predictions, we will benefit from the same advantages. We will vertically integrate to achieve superior unit economics and control more of the customer experience. The Super App is the distribution breakthrough, what makes this business structurally attractive is vertical integration. We intend to own more of the prediction stack, we control the end-to-end customer experience and the economics that come with it. That means faster innovation velocity, better unit economics, and tighter control over quality as we scale.
While the Super App is broad by design, the predictions product inside will be exceptional. A sports first experience with the functionality, speed, and polish customers already associate with DraftKings. We are not building a side app. We are building a core DraftKings product, and we will keep raising the bar. We believe predictions could represent a $10 billion annual gross revenue opportunity in the years ahead, and we intend to lead in this category.
Vertical integration will help us achieve this goal. We will leverage our proprietary pricing and trading capabilities to create the deepest and broadest sports offering. In predictions, liquidity is central to the experience. Tight two-way markets, real depth, and fast updates are what customers feel and what drives customer retention. DraftKings is built for this because we've spent years building a proprietary sports pricing and trading stack.
The same sports data modeling, trading, and risk infrastructure that powers our number one-ranked Sportsbook will power our Predictions offering, enabling broader market availability, deeper content, and a better live experience. In the next few months, we plan to launch a dedicated market-making division because bringing our own liquidity to market is how we will deliver tighter pricing and a more consistent customer experience.
This is also where AI and machine learning compound the advantage, sharper probabilities, faster adjustments, smarter risk, and better unit economics at scale. We have a deep understanding of sports customers. Another advantage is simple, but it's massively underestimated. We know sports customers. We've been serving sports fans for nearly 15 years across Fantasy and Sportsbook, and we understand what drives engagement in the live moment.
We know the mindset of a fan who wants to get in on the action and not just manage a generic trading workflow. That's how we're building predictions. It will feel like DraftKings, sports first content cards, markets and combos that match the moment, and promotions and context that make participation intuitive. Because we have rich cross-vertical data, we can personalize the experience for our customers from day one, so discovery, recommendations, and the entire journey get more relevant with each session. We will leverage our national marketing footprint to efficiently acquire customers across verticals. Let's talk about distribution. DraftKings already has a scaled national marketing footprint, the brand, the creative, and premium relationships that show up in the biggest moments in sports. Predictions makes those assets more valuable overnight because we can now convert that demand in places where Sportsbook isn't live today.
With the Super App, it's one brand, one app, and one funnel, so national marketing can drive efficient customer acquisition across both Sportsbook and Predictions across all 50 states. That is a real structural advantage in CAC efficiency and in speed to scale. Our Predictions offering will rapidly improve in 2026. We are moving fast. We already launched DraftKings Predictions through CME's Exchange, expanded capabilities through Crypto.com, and from here, our roadmap accelerates. More exchanges and combinations, our market-making launch, and Railbird coming online, and most importantly, our Super App integration. All of these milestones increase innovation velocity, improve unit economics, and drive more efficient customer acquisition. Over time, we intend to build toward deeper vertical integration, including in-house exchange technology and, as we scale, an in-house FCM and clearing house components, so we can capture more customer economics and control more of the customer experience.
This is the same playbook we've run again and again. Launch, iterate fast, and own the parts that really matter. We will keep raising the bar for quality in the industry. Our goal is clear. By the start of the NFL season, we intend to deliver an industry-leading sports predictions experience and scale it profitably from there. For my last point, it's important to understand that the profit opportunity from predictions is significant. While revenue in this category is just beginning to build, we've studied the business in depth and have strong confidence in a high adjusted gross margin profile. Compared to Sportsbook, we expect our predictions adjusted gross margin to be 10% higher -30% higher. This is because this industry does not have state gaming taxes, and we expect long-term promotions to be more limited.
Of course, we will follow the data to better understand the customer lifetime value as we deploy our growth investment over the next year. With that, I'll turn it over to Corey Gottlieb, our Chief Product Officer.
Thanks, Janine. I'm Corey Gottlieb, Chief Product Officer. What Janine and Jason just went through with you is a path for us to deliver an entirely new app experience, one that integrates all of the best parts of our products in a singular, seamless experience for our customers. How do we actually get there? Our ability to deliver, to execute a plan like that requires a ton of background in having built and delivered amazing mobile experiences. That's what we've done. We have the number one-rated products in both Sportsbook and Casino now going on the last two years, and we've gotten there through a very conscious, very deliberate playbook. We have invested deeply in our own technology infrastructure, which allows us to unlock great new differentiated customer experiences. We have built deep content, every possible offering in every possible product.
We did that in Sportsbook, we did it through our original game studio with Casino, we'll continue to invest in both content and experience as we get into building our Super App. Then we've just listened deeply to our customers. We have a decade's worth of experience authentically understanding what our customers want, whether it's iGaming customers or sports customers.
That's gotten us to a point where with both of our products, we are empirically rated the best product in the space. You can see in Sportsbook, for example, compared to competitors, everything from user interface to content depth to experience is consistently rated higher on DraftKings than in other places. Again, that is the product of deep investment in both an understanding of our customer and in the right infrastructural technology to unlock great experiences that can't be had through a reliance on commoditized third-party offerings.
That's the same playbook we're gonna follow as we build and deliver the Super App. How does that translate to what we're gonna do with the Super App? The starting point is building a great integrated sports content experience that begins with our Sportsbook, which is the number 1-rated product in the space. It taps into what we deliver from our exchange.
Once we integrate to deliver our own in-house exchange, we will further expand the offering that we have for our customers. It leverages the market-making capabilities that we're soon going to bring to market. The aggregate of those things is this deep, rich sports experience, all of which sits on top of our in-house infrastructure. The infrastructure is really the foundation, the powerhouse that makes our sports products go.
It is vertically agnostic, meaning it powers a Sportsbook, it powers sports products inside of an exchange, it sits on top of the same data layer, integrated sports data, deep analytics, really strong trading capabilities, dynamic pricing capabilities. All of those things are aggregated in years' worth of technology infrastructure that we've built to deliver amazing modeling and data and pricing and trading capabilities. Those become the backbone of what is the richest, deepest possible overarching sports experience that really makes the Super App shine. What do I mean when I say we're gonna deliver a dynamic sports content experience inside of our Super App? That relies on what we've built inside of our Sportsbook to date. We have operated against this identity, which is that we operate at the speed of sports.
Our sports betting offering across multiple dimensions moves at the actual cadence of sports consumption. Let me get a little bit deeper there. One, we have the best live offering in market, the number one live betting Sportsbook product that exists today, whether that's our live market availability, the depth of our live content, our live user experience. When you consume live sports with the DraftKings Sportsbook today and in the future with our Super App, it feels like you are moving at the speed of a real game. Second is the notion of authenticity. We have to be able to tap into how people actually consume sports by deeply understanding the way that they think about narratives and storylines and statistics and information, and all the ancillary information that tends to drive their opinions.
Betting in our Sportsbook is an expression of opinion. We need to be able to package content and promotions and experiences in a way that allows for that expression of opinion. Finally, there's the notion of community. Think about what really moves sports. It's conversation, it's engagement, it's the back and forth that happens when you're watching a game with your friends or the text messages that happen over the course of a week leading up to the Super Bowl. We can encapsulate that in the form of a really, really strong integrated social experience. We've done that. We have a differentiated social experience that powers our Sportsbook today. That too will extend to power all of our sports content. These pillars really become the driving forces of how we deliver that dynamic, overarching sports experience within our Super App.
Now, let me go a little bit deeper into what each of those pillars has meant for us within our Sportsbook to date. First, I mentioned live. We have the number one live betting product in the industry, thanks to deep technology investments that we've made over the course of the last few years that really take us to a different level of delivery for the customer. We have a super strong live user experience. We have really powerful micro markets, so point-by-point tennis, pitch-by-pitch MLB, play-by-play NBA. All of those things are super strong for us.
Maybe one of the most sort of important indicators of just how strong that experience is our live market availability. No experience is more frustrating than when you come into a product and you want to make a bet on the second-half line of the Patriots and Texans game or on the first quarter line for Patrick Mahomes passing yardage. You see a market, you go to click on it, and then all of a sudden it disappears. That is bad live market availability. We calculated that this past year, we took more than $50 million in GGR on bets that were available on DraftKings, while the top competitors that we go up against had no market availability for that same content. That's a really, really critical thing for delivering a great real-time fluid live betting experience. We continue to innovate here with live promotions.
We launched our Live Millions promotion for the Super Bowl. It was super successful. All of this again sits on top of this infrastructure that allows us to build many products and a differentiated roadmap on top of an amazing live experience, and we'll carry that over to the Super App. Let me touch on this notion of relevance and authenticity, because it's been critical both for our existing sportsbook and will really be a lot of the backbone of the way that we communicate with the consumer when we deliver a global sports product in the form of the Super App. What do I mean here? Running a great sports content product is kind of like running a great editorial operation.
You need to have all of the tools at your disposal to deliver news in real time, information in real time, to package and creatively deliver content in all kinds of different ways, have the right data science and personalization to understand the relationship between each different type of customer and the kind of content that they want to consume. All of those are infrastructure that we have built that underlies our sportsbook product today. The result is that we can deliver all kinds of products on top of that in the form of interface that are super dynamic and interesting and feel like content consumption. All they are is an easier, more seamless way for customers to express their opinion in the form of making a bet.
That same functionality will be super critical for us as we want to tell stories in the form of overarching sports inside the Super App. We'll use the same functionality, the same merchandising, the same content management system and infrastructural technology to package and deliver content dynamically with our Predictions content inside the Super App as we have to date inside of our Sportsbook. The last real prong here as relates to consumer differentiation inside of our Sportsbook and for sports content more broadly is the notion of community and social. Starting maybe five, six years ago, we began to build the infrastructure of a social product deeply embedded inside of our Sportsbook.
That means a full social graph where we can understand customers' connections to one another, customers' relationships to our content, and start to build interfaces on top of that that allow customers to engage not just with bets, but with each other. The most popular examples of that are our tailed bets product, where customers can come in, see what one another are betting, see what our influencers are betting on, and be able in one click to tail those bets themselves. We've built many interfaces like this that now form this web inside of our product where it feels alive, it feels conversational. It feels like a place not just where you can express your opinion in the form of a transaction, but where you can express that same opinion with your friends or with people you know, or with the broader public.
That's a huge part of authentically delivering a sports experience is being a hub for conversation. No other products in the sports betting space have this, and our sportsbook has captured this, and it's a real meaningful part of our user experience and our business, and it will be another one of those sort of components of connective tissue that makes an overarching sports experience feel dynamic and integrated and community-oriented when we launch the Super App. This idea of authenticity also manifests in the form of our Spanish language product. Maybe two years ago, we recognized that there was a growing gap in the space where nobody had delivered for a Spanish-speaking customer a fully translated experience. We set out to do that. What we launched a few months ago is a fully translated app.
Our sportsbook app, the casino embedded inside of it, 100% translated. That's every piece of content in the app, from markets to promotions to all of the different instructional text, our educational text, everything in the product completely translated and is powered by an AI-oriented translation service that intelligently learns what those customers want, what maybe doesn't feel authentic in our translation layer, and improves it. The result, first of all, is a really strong translated product that we're gonna heavily lean into for events like the World Cup coming up, for example. That also creates a capability for us that now becomes extensible, so that when we launch the Super App in time, it will be not super difficult for us to deliver a translated product, for example, with prediction sports content, with other content that lives inside of the Super App.
This gives us, I think, a really unique differentiation point when it comes to authentically reaching the customer. I want to turn for a moment to our iGaming product, because like Sportsbook, we have built a ton of great infrastructural technology to power an authentic experience for our casino customers. One great example of that is what I would call our rewards loop. Over the course of the past few years, we've built several critical capabilities along the journey, along the connective tissue that really makes customers go inside of a casino product. One example of that is our jackpots product. We have a homegrown underlying technology stack that powers dynamic jackpots, multi-game jackpots, that allows customers to engage with jackpots at all different levels. We recently awarded the largest online jackpot payout in the history of online iGaming in $22 million a few months ago.
This has become a staple of our casino brand. We are known for having set ourselves apart from the rest of our competition where amazing jackpots are concerned. They form a critical part of that core loop that I mentioned. Another great example is our daily rewards product. A few months ago, we launched a product that layers the popular Rocket game that we have built and that customers have enjoyed for years with us on top of a daily rewards experience. The result is that customers can come in every day with us, engage with a free daily rewards game, earn prizes, and feel again like they are constantly reinforced. Our ability to deliver core capabilities all along that loop so that the customer comes back to us consistently and feels like this is just a place for fun and where they can be rewarded is second to none.
On top of that infrastructure is content. With casino, we made a conscious investment when we first launched our casino app to build original content. We did that in the form of an in-house studio. The evolution of that studio has been an awesome thing to watch. We have developed hundreds of original titles. We've built strong brands like Rocket that are super engaging and that now have become resonant with our brand. They've become synonymous with what the DraftKings Casino is. It's allowed us to create innovative mechanics that now power lots and lots of slots content. It has become one of the backbones of the way that our business operates. We did $30 billion+ in studio handle this past year in 2025. A huge component of the way that we set our casino product apart is through the operations of our studio.
How does that all come together? I talked a lot about sports and how we can deliver this really great integrated dynamic sports content offering that combines Sportsbook content and our Predictions offering inside of the Super App. That's true. There's no question that that's a differentiated focus of ours. The Super App is capable of more than just that. It's also capable of being the house for our non-sports content. I just went through with you how strong our industry-leading Casino product is, how strong our original Casino content is. That too will live in the Super App. We have signal here already. We have had an embedded Casino product inside of our Sportsbook, and that product makes up 62% of total Casino handle already.
There's clearly intent among customers who are already inside of this combined product to engage with casino there where casino is available. We'll deliver increased personalization there. We'll build great native cross-sell and cross-product integration. There's super strong opportunity for us to deliver an even better integrated experience that takes sports, goes beyond sports to be an umbrella for all of the best things that DraftKings offers. I'm gonna turn it over to our Chief Technology Officer, Zach Maybury.
Thanks, Corey. I'm Zach Maybury, Chief Technology Officer at DraftKings. I wanna do one thing in this section, make our technology advantage feel inevitable, not as a feature, but as a structural edge that compounds. DraftKings runs on a technology stack we built and we own. That stack sits underneath every product we ship and every customer moment we create: Sportsbook, Casino, Fantasy, Lottery, Predictions, and it powers both layers of the business. First, what customers see, the experiences in the Super App, the speed, the reliability, the quality. Second, what makes the business work, data, pricing and trading, payments, risk, responsible gaming, customer support workflows, and analytics. We don't rent the core of the platform. We built it to move fast, stay up in the biggest moments, and scale efficiently as the business gets larger. The Super App is the clearest expression of that advantage.
One platform, one set of capabilities, compounding improvements everywhere. If you wanna see where owning the stack becomes a moat, you see it in sports pricing and trading. We originate and price the vast majority of our sports content in-house, and that control translates into three things customers feel immediately. First, breadth and depth. We can turn more moments into markets faster across more sports with more combinability. Second, live availability. In-play is where intent is highest. We keep the doors open, and we keep markets current because we own the models, the data pipeline, and the infrastructure to refresh in real time. Third, friction-free transactions, speed at placement, speed at settlement. That's the emotional finish line for customers, and we keep getting better. Let me put numbers behind it because this is where technology becomes visible.
95% of our content is now in-house, up from 72% in 2022. We run 100,000 simulations per calculation, up from 10,000. Live mainline availability is 84%, up from 70%. 517 live betting options per game, up from 124. 92% live bet success rate, up from 78%, and 89% of payouts complete in under 60 seconds, up from 66%. This is also an AI and machine learning-driven domain. The ML shaders we implemented in the second half of 2025 and into 2026 are tracking towards roughly $45 million of annualized gross revenue uplift with live tennis Moneyline results already exceeding expectations. These same capabilities scale directly into predictions as we launch our market-making division, extending our pricing and trading edge into a new category.
It's the same engine solving a bigger set of problems. Another structural advantage is our data platform and analytics engine. Because we operate one unified platform, we see customer behavior across every vertical, and we can turn that signal into a better experience, faster discovery, smarter recommendations, more relevant offers, and it's not just a UI improvement. It drives frequency, cross-product journeys, and ultimately LTV.
It also makes promotions more precise and more efficient. In 2025, our Sportsbook net revenue margin on promotional wagers improved by more than 1,300 basis points year-over-year as segmentation and decisioning became sharper. We automated and personalized $400 million of promotional spend in 2025 through AI, meaning we can reinvest with higher ROI and less waste. Customers find what they want faster, engage more often, and we reinvest more efficiently because the decisions are driven by data.
Let me be crystal clear on AI. At DraftKings, AI is not a side initiative. It is a company-wide force multiplier. It's accelerating product velocity in the Super App, sharpening pricing and trading, improving discovery and personalization, and driving real operating leverage. You can see it in the metrics. Engineering hour productivity improved 40% year-over-year. 100% of code reviews are AI-assisted, and we're seeing 25% containment on chatbot customer service interactions.
This isn't theoretical. It's applied across the company in very practical ways. Prompt-based sportsbook merchandising and content management, automated AI-assisted QA on sportsbook content cards, trading analytics accelerating trader reviews, automated and AI-assisted fraud reviews and risk, engineering copilots and automated code review, and AI-powered market health monitoring across hundreds of markets. We are shipping faster with less friction. You saw what AI did for the Predictions MVP.
Weeks and months of development time saved, QA down 30%-40%, and critical bottlenecks removed with dramatic throughput gains. It's not limited to engineering. AI is optimizing content systems in casino and sportsbook, automating parts of trading intelligence and market mechanics, powering customer intelligence and AI agents across CX and risk, improving marketing spend and promo optimization, and scaling enterprise tools like knowledge management and no-code agent authorization. AI helps us grow faster and expand margins at the same time, and that compounding advantage shows up in everything we build next, because in the super app, every improvement scales across the entire platform. With that, I'll turn it over to Shawn Henley, our Chief Customer Officer.
Thanks, Zach, and it's great to be with you all today. My name is Shawn Henley. I'm the DraftKings Chief Customer Officer. Today I have the pleasure to talk to you a little bit around customer trust and how we instill that in each and every interaction with our customers. You'll see on the, on the chart moving from left to right, we'll talk a little bit around the effortless experience and how we approach that in all things that we do. Next, we'll talk about as part of that experience, we want it to be personalized. Not just an effortless experience, but one that is tailored to you and your needs.
Then we'll talk about how we always have our customers' back and really looking at proactive risk management and how do we drive fraudulent actors out and protect both the customer and DraftKings. Then I'll hand it over to Lori, who will talk a little bit around responsible gaming and our collaboration across the industry. Let's start with customer satisfaction, right? One of the best ways that we build trust is having an amazing second to none customer satisfaction. We're really proud that in this last year, the American Customer Satisfaction Index, one of the leading institutes that talks about satisfaction across the United States and companies and industries there, started covering the online gaming space, and DraftKings in the first ever report had the top customer satisfaction with our players. We don't take this lightly.
We know this has to be earned, and it has to be earned every day in every interaction, 'cause not only are our competitors now, you know, coming after us, especially after they see this, but our players and our customers are ever-changing, and they demand us to be better each and every time. Let's talk a little bit around how we've been driving this great customer satisfaction and really establishing that durable trust, long and enduring trust with our players. First, let's talk a little bit around that effortless experience. I think we all can relate that when you're in an experience, you don't want it to be hard, you don't want it to have to have 20 steps. You really want to get into the app, do what you need to do, and you want it to be simple.
Most importantly, you want it to be effortless. We've really taken that to heart over the last 4 yeasrs - 5 years with this really big surge on customer centricity and putting the customer at the center of everything we do. Looking at it through their eyes and through their lens, and really across the entire enterprise, going after how do we make this experience better? Now, just one metric that I'll share with you all, 1 KPI that we use here is ticket rate. What that simply is if you're a customer, how many tickets do you submit on average out of 1,000 active customers every year, right? You obviously want that to be lower and not higher.
We've been on this mission for the last 3 years - 4 years to really drive that friction out, get that effortless experience in place, we've had a lot of success to where our customer service ticket rate is down over 50% since we really started this push. We're never gonna stop. You know, we view each of these interactions, while yes, we love to talk to our customers and resolve their issues, they're really defects, and we wanna get out as many as we can. One of the things that I'll just call out that's been a real big game changer for us, you know, there's been a big push in AI across our company, across obviously the world, and this has been a game changer for us in understanding the voice of the customer as we know it today.
So we use AI technology that's constantly scanning all of our customer service tickets, all of our social posts, all of our app reviews, Reddit, you name all those things, it's looking at it in real time, and immediately giving us feedback of anything that's wrong, that's going right, so that we can address it. That's been able to really scale and look at millions and millions of interactions, where I would say three to four years ago, we had to do a lot of that manually, and it just took us a lot longer, and that's really helped us with some of this inflection that you see here. Next, let's talk about personalization. While we talked just recently around how we want that experience to be effortless, just as importantly is it has to be tailored and unique for you, right?
We really take to heart, the crown is yours as our tagline, we really want the DraftKings experience to be what you want it to make. That's particularly important for our high-value players. I'll highlight just a couple of ways that we really focus on tailoring it for them. This applies to our broader base, but in particular for our high-value players. One, we build personalized one-to-one relationships with our high-value players, right? We have a host assigned to them. They get to know them, and not just get to know them as a person, but really get to know them around what are their interests, what are their certain types of sports they like, their favorite players, their favorite teams, and then just as importantly, what are your favorite promotions, or the way that you like to receive loyalty from DraftKings.
We get that, and then we tailor the program to them. That's a really huge advantage. When we talk to our players, they highlight that a lot of our competitors, they'll feel more like it's a transaction, whereas at DraftKings, they feel like they have a relationship. It's really important that we get to know them, and we have that unique experience. Speaking of experience, we wanna make sure that, especially for our high-value players, that it's an elevated experience, unique access. Whether that's elevated customer support directly with their host or an expedited like HOV lane, if you will, for customer service, we're there for them when they need us.
It's elevated, it's heightened. We also take that all the way through the experience, as you heard in our technology and product areas, you know, where we tailor it, whether it's the game room in casino or an Onyx Room or whatever the case may be, we really try to heighten it and elevate it as best we can in a virtual world. The last one is our shared loyalty and recognition program. This is such a huge differentiator for us with our Dynasty Rewards and, you know, also known as our Dynasty program, where we really wanna provide that second-to-none experience. Just like other loyalty programs, we wanna make it so that if you're gonna play in online gaming, you wanna consolidate your play with one provider, so that way you get the best access, you get the best loyalty.
The same way that that applies for airlines or hotels, it definitely applies here and is a huge strategic advantage for us with our high-value players in particular. Then I'll close this out real quickly on proactive risk management, where I just wanna talk about how we protect both our players and DraftKings from fraudulent actors, right. Whether that's stolen identities, stolen payment methods, it's important that we stomp that out. One, it's bad for our financials, and two, it's also, most importantly, bad for our customers. One way that we measure that is our chargeback rate. These are the funds that were made it onto the platform fraudulently, and then we had to consume or take the hit for, if you will, in our financials.
As you can see here over the last four years, we've really driven this down by over 50% and focused a lot on AI, data science, advanced modeling, network effects with all these leading providers across the world that provide services for banks and others, and really building that network effect and building our risk architecture from scratch that allows us to, what we believe, have one of the best, if not the best in the industry, for chargeback rates. As you can see, they're indicated by the industry line at 31 bps, and we're at 15. The other chart you see on the right is a deposit success rate because we could easily drive down the chargeback rate by just not accepting deposits. Obviously, that goes counter to the customer centricity, it goes counter to our financials.
At the same time that we were driving down fraud, we spent a ton of time about doing it the right way and doing it in a customer-centric way, so that way we truly focus on the fraudsters. As doing such, we were able to also improve the experience for our good customers in driving up the success rate. Oftentimes, those will move in the same direction, which is not good for the company or people, but we were able to really do them in the inverse of each other and show that we can drive out financial losses while at the same time providing a better experience for the business. Thank you for your time. I'm now gonna hand it over to Lori to talk a little bit around responsible gaming.
Thank you, Shawn. I'm Lori Kalani, Chief Responsible Gaming Officer at DraftKings. Responsible gaming is a core capability and a clear differentiator for DraftKings. Leading in this area is a company-wide priority. We established the industry's first Chief Responsible Gaming Officer role to elevate responsible gaming, centralize accountability, and embed responsible gaming across product, operations, and strategy. Independent testing ranked DraftKings number one overall in responsible gaming. In 2025 alone, we saw 58 million visits to our Responsible Gaming Center, we saw a 52% increase in tool usage, We delivered over 44 million responsible gaming messages to our customers. These were messages designed to educate, prompt reflection, and encourage responsible play. We also work closely with experts across the ecosystem, including researchers, clinicians, regulators, and industry partners to ensure our responsible gaming program meets the highest standards and is grounded in evidence and best practices.
Our responsible gaming leadership reflects years of sustained investment in education. Since 2020, we've been on a continuous journey of innovating and enhancing our training, tools, and customer resources, evolving alongside the industry and incorporating insights from emerging research to drive awareness, adoption, and responsible engagement. Responsible gaming leadership extends beyond our own platform. We're working to use our scale and experience to help educate stakeholders, inform policy discussions, and shape thoughtful regulation that's grounded in evidence and operational excellence. We're actively collaborating with operators, advocates, research, leagues, and regulators to advance shared standards and elevate the industry. By sharing data-driven insights and best practices, we help strengthen consumer protection, improve education, and build greater confidence in the entire industry's long-term sustainability. This is how DraftKings leads. We're setting the standard, influencing the dialogue, and helping move the entire ecosystem forward.
At DraftKings, trust is foundational to everything we do. We want every customer, no matter which product they choose on our platform, to engage with confidence and clarity. That's why we've extended our responsible gaming standards to federally regulated events contracts through our Responsible Trading Program . We believe responsible engagement shouldn't depend on the product. It should be consistent across the entire DraftKings experience. Responsible trading focuses on education, transparency, and informed participation. Customers can set deposit limits, take cool-offs or self-exclude, and they can access dedicated resources through our Responsible Trading Center . Our commitment is simple: the same standards, the same focus on responsible engagement, and the same emphasis on earning and maintaining trust across everything that we offer. You've heard the strategy. Let's show you what it looks like. Please roll one of the responsible gaming ads that we unveiled not too long ago.
Said if you're gonna play the game, boy, you gotta learn to play it right. You gotta know when to hold 'em. Pull 'em already. Know when to fold 'em. Know when to walk away. He travels. Know when to run. Run, run. You never count your money. He's automatic from the 40. When you're sittin' at the table. There'll be time enough for countin' when the dealing's done. You gotta know when to hold 'em. Know when to hold 'em. Know when to fold 'em. Know when to fold 'em. It is not my night. Know when to walk away. Run. Know when to run. Run. You never count your money when you're sittin' at the table. There'll be time enough for countin' when the dealing's done. There'll be time enough for countin' when the dealing's done. He's definitely automatic from the 15.
Just stop talking.
With that, I'll turn it over to our Chief Marketing Officer, Stephanie Sherman.
Thanks, Lori. I'm Stephanie Sherman, Chief Marketing Officer. At DraftKings, we take the LTV generated across the business, and we use that to reinvest back into growth through our marketing engine, where we have industry-leading capabilities. In 2025, we drove 12% more downloads than our nearest competitor, and we did so at a significantly more efficient cost per download. Through the DraftKings platform with seven apps, each with over 250,000 downloads, we're able to acquire and activate across all of the sports and gaming moments in the calendar. We're able to deliver these results through three pillars of our marketing engine that I'll talk through today. Our brand, where we've invested over $6 billion in sales and marketing since 2018, leading us to the number one brand in the category.
Our relationships that amplify our messages and drive reach with premier partners like ESPN and NBC. Our data-driven approach, which has been a core philosophy since day one, where we've invested in data science, automation, and recently, AI-led decisioning. In 2026, with the launch of our Super App, will only fuel and increase our efficiency and our marketing advantage. Our brand is a core pillar of our marketing engine and is synonymous with sports and entertainment. You can see here we're number one in brand awareness, number one in brand preference, and number one net promoter score. Actually recently, in our most recent surveys, we further expanded our lead across these categories. A strong brand is the foundation for efficient customer acquisition but also drives LTV through sticky retention and increased monetization.
It also has a powerful network effect where DFS, a liquidity-driven category, but also Sportsbook and Casino, whereas we continue to invest in industry products, and continue to deliver superior customer experiences. Our customers become amplification for our brand, and that is an impact that compounds over time, where our customers are one of our top sources of acquisition. Our brand is a critical component of our marketing engine. The second pillar of our marketing engine is our relationships. We have relationships with teams, with leagues, with national and local media companies, with the strongest voices in sports, with digital and social platforms, all combining for unparalleled reach. Take NBA, where last year we were barely present in national broadcast, and this year, through ESPN and NBC, we're present in over 70% of nationally televised NBA games.
These relationships not only drive reach, but efficiency, as DraftKings is showing up in moments of high intent and high activation. Importantly, these same relationships can be used for our new Predictions product, where as our footprint nearly doubled overnight, so did the efficiency through these partnerships. Zooming in on one of our most recent partnerships with ESPN. DraftKings and ESPN combining together two iconic brands in sports with ESPN as the premier sporting destination and unrivaled reach. Together, we're able to smoothen the experience of sports content to participation through our apps. We're able to drive an elevated sporting experience through our integrations, our live odds, ESPN shows through ESPN IP, as well as integrations that continue to elevate the viewing experience that you'll see in March Madness as we drive further connection from ESPN into DraftKings and DraftKings into ESPN.
Through the wide reach, we're able, through partners like ESPN and others, to deliver our acquisition messaging, our monetization messaging, as well as deliver our campaigns that drive education around the tools that we have for responsible play. The third pillar of our marketing engine is our data-driven approach. We're having pools of data and the ability to analyze that data through machine learning, sophisticated analytics, and AI decisioning is a core part of how we're able to drive our efficient marketing. Every day, we're analyzing billions of data points, and we're combining that with over 10 years of in-market experience testing, driving rigorous test and learn agendas to ultimately deliver the right message to the right customer at the right time.
We invest our marketing spend to return under a three-year gross profit payback period, where we're constantly looking to shift our dollars to where the most value is in our investment. We do this as the sporting calendar changes, as the competitive landscape changes on the foundation of a depth of understanding state and jurisdictional-level nuances. Three-year payback implies a return of over 15% if you assume that three years is the baseline for further growth. As Alan will talk about, we know that customer value extends well beyond the three-year horizon. Altogether, our brand, our relationships, and our data-driven approach combine to a marketing engine that enables us to efficiently acquire customers at scale at increasingly efficient CACs.
As you see here, cumulative customer acquisition exceeded $14 million in 2025, and our cumulative CAC declined over 40% from its peak in 2020 to 2025. This spend is fully burdened spend, with spend for acquisition as well as spend that is geared more towards driving up LTV, retention, and monetization. We see continued opportunity to drive efficient acquisition through our new partnerships with ESPN and others, as well as through the launch of our Super App. One recent development, we've been able to see an increase in paid active days and drive up LTV through the paid active days, as well as an increased percent of handle parlay, which is very exciting. We come up on March Madness this year, we're building on learnings from a test last year where we saw a 9% increase in paid active days.
With that, I'll turn it over to our Chief Financial Officer, Alan Ellingson.
Thanks, Steph. I'm Alan Ellingson, Chief Financial Officer at DraftKings. Let's translate everything you've heard into the financial model. I wanna start with the headline. Adjusted gross profit is increasing rapidly in the states where we operate today. Jason touched on it earlier. Growth in adjusted gross profit is what we're focused on achieving. On an enterprise basis, our adjusted gross profit has tripled over the last three years, and the reason is simple: strong annual customer cohorts that stack on top of each other. As we grow customers, increase volume per customer, improve net revenue margin, and drive better efficiency, those gains show up directly in adjusted gross profit, and they continue to compound over time. It's remarkable how consistent the cohorts are over time, which you can see in our appendix.
To date, every annual customer cohort continues to generate more adjusted gross profit as it ages, even net of customers we do not retain. Even through short-term periods of customer-friendly outcomes, we have grown adjusted annual gross profit across every cohort. You can see that even our cohorts that are five, six, and seven years old are continuing to grow, which tells you that our customer relationships strengthen over time rather than fade. That consistency is a major reason why we have a conviction in the long-term earning power of our platform. Let's talk about the drivers of gross profit growth. It starts with volume. We are driving higher volume per customer as the product experience improves. As you've heard today, we're delivering more ways to engage through live moments, content depth, better discovery, and cross-vertical journeys. We're also seeing strength in volume across customer cohorts.
New customers ramp faster. Mature customers keep expanding engagement as we add more touch points. When volume grows on top of a larger and expanding customer base, it creates significant operating leverage in the model. Net revenue margin is where the better product, stronger technology, smarter marketing, and disciplined operations show up in the numbers. Over time, we've improved net revenue margin across our verticals, but the progress has been most pronounced in Sportsbook. As you can see here, we increased Sportsbook net revenue margin from 3.2% in 2021 to above 7% in 2025, a 100 basis points increase per year on average. A big driver is the structural mix into higher value moments, including parlays, alongside better pricing, risk, and more efficient reinvestment. Parlay handle mix is an important driver of the Sportsbook net revenue margin.
What's encouraging is that this isn't just a one-year phenomenon. We are seeing parlay handle mix increase across customer cohorts. In 2025, our new Sportsbook customer cohort reached 33% parlay handle mix in year one, a new record for any cohort in its first year. That consistency gives us confidence we can keep improving unit economics within our existing customer cohorts. Next, I wanna highlight cost of revenue efficiency. As we scale, we are improving efficiency through better trading and risk management, more disciplined reinvestment, and a stronger operating model across the business. You can see this show up in higher adjusted gross margin over time.
On this slide, you can see that our processing platform and revenue share costs of revenue combined have improved from 28% of revenue in 2021 down to 20% of revenue in 2025, an 800 basis point improvement in four years. Processing expenses have been an area of focus for a couple of years now, and we've made tremendous progress in 2025. We stood up a cross-functional group that optimized payments through contracts and rebate adjustments, created rules to reduce chargebacks, and removed credit cards, all while maintaining or improving the customer experience. The result for processing expense was approximately $40 million in savings in 2025 relative to our expectations coming into the year, and more than 50 basis points of year-over-year improvement as a percentage of revenue. Platform costs have also been a bright spot as we continue to build more capabilities in-house.
In 2025, platform costs as a percentage of revenue improved by more than 50 basis points year-over-year. This slide is about how we manage through taxes and regulations while protecting long-term returns. In our highest tax rate states, promotions as a percentage of Sportsbook handle was as low as 2% for full year 2025, compared to above 4% in states with a competitive tax rate. If we look at averages, promotions as a percentage of Sportsbook handle in high tax states were 100 basis points less than they were in states with more competitive tax rates. The point is, we don't use a one-size-fits-all approach. We evaluate changes through customer-level investment decisions and respond with a clear playbook, pricing and product levers where appropriate, tighter promotional reinvestment based on incremental value, and continued efficiency in the costs required to generate net revenue.
The takeaway is our model is adaptive and therefore resilient. We manage through changes with discipline, and we protect lifetime value. This slide ties it all together, the right way to think about it is margin expansion. Adjusted gross profit is the engine. From there, the bridge to Adjusted EBITDA is straightforward. Adjusted gross profit, less sales and marketing, less our fixed operating cost base. What gives us confidence in at least a 30% long-term Adjusted EBITDA margin is line of sight on operating leverage. As revenue and Adjusted gross profit grow, our operating expenses don't linearly scale. Marketing is managed to a customer-level ROI and is meaningfully variable. Product and technology are sized for our growth roadmap and benefit from both scale and increasingly AI-driven productivity. Our fixed cost base can support significantly more volume without a proportional increase in spend.
We see a clear path to durable margin expansion towards 30%+ Adjusted EBITDA margin over time, driven by scale, efficiency, technology, and disciplined reinvestment. We know that Adjusted EBITDA is not the end goal. Sustainable cash generation is. Our model is capital light. We are currently spending approximately $150 million per year on CapEx and capitalized software. These costs should remain relatively stable over the years to come. This means incremental Adjusted EBITDA converts to a normalized free cash flow at a very high rate. That increases strategic flexibility, supporting reinvestments where returns are highest and driving long-term durable value creation. As you heard today, we expect to generate significant Adjusted EBITDA and free cash flow over time. To maximize shareholder returns, we are allocating our capital between growth investments, capital returns, and disciplined M&A with a focus on long-term value creation.
In the near term, we expect to maintain low net leverage and consider the risk-adjusted return profile on growth investments relative to capital return. As our free cash flow grows, we expect share repurchases to remain our primary return mechanism because repurchases can be highly accretive per share. Last, of course, we will continue to consider strategic M&A, but only in situations where it strengthens our platform and clears a very high return bar. The bottom line is simple: we'll invest where returns are highest, and as the business generates more cash, we'll return capital with discipline focused on value creation per share. With that, I'll kick it back to our Co-founder and CEO, Jason Robins, for closing remarks.
Thank you all for joining us today. I know you saw a lot. I hope you learned a lot. There are three key takeaways I want you to walk away with. First, our TAM is growing rapidly, we expect by 2030 for it to reach $55 billion-$80 billion. Number two, we have built an absolute machine with our LTV flywheel, with now our new Super App and all of the AI-driven innovation we intend to deploy, we expect to be able to take that to the next level. Lastly, we expect to achieve Adjusted EBITDA margins of 30%+, with AI presenting additional upside from there. Thank you again for joining us. Be well, I hope to see you soon.