DraftKings Inc.

Good day and thank you for standing by. Welcome to the DraftKings fourth quarter 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mike Dilaglio, Senior Director of Investor Relations. Please go ahead.

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. 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 Robbins, 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, We'll provide a brief review of our financials. We will then open the line to questions. I will now turn the call over to Jason Robbins.

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, four 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. 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 March 2nd. 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 and 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 for 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. In predictions, we have the playbook to execute and win. 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. 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've 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. 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 a 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 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. 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. 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 past bullets 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. 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. 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 drafting 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 events contracts and the advancement of a multi-endurable 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. 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 NBC Universal 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 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. 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. Exchanges feed 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 Ellenson, to discuss our results and guidance.