Underdog reported preliminary third-quarter 2026 handle of $1.075bn at an IG Group investor seminar on October 8, up 199% year-over-year.
The US daily fantasy sports and prediction markets operator estimated net revenue of $105m, a 118% increase on the corresponding quarter of 2025.
The figures extend a shift in Underdog's product mix. Founded in 2020 around daily fantasy sports, it began offering prediction markets through Crypto.com in September 2025.
During 2026 it added a futures commission merchant, integrated Kalshi and launched its own exchange, UDX, in July. Its presentation says the resulting core sports experience is available across 46 states, although individual products differ by jurisdiction and future availability depends on regulatory outcomes.
That evolution complicates the handle comparison. Underdog defines handle as total customer entries, but its 2025 measure included sports betting activity while its 2026 measure includes Underdog Rips.
The reported 199% increase therefore spans a changing product set and cannot establish the growth rate of prediction markets alone.
Net revenue, which the presentation defines after customer payouts and promotional costs, reached $128m in the first quarter and $122m in the second. The estimated third-quarter figure takes year-to-date net revenue to about $355m, up 30%. Underdog recorded $441m for full-year 2025, according to the seminar deck.
The audience measure grew more slowly than handle. Average monthly active users reached an estimated 705,000 in the third quarter, up 13% but below 836,000 in the second quarter.
Underdog linked the second-quarter figure to the start of the World Cup and attributed the strong third-quarter net revenue comparison partly to World Cup performance and a softer 2025 base.
IG Group agreed in July to acquire Underdog for consideration of up to approximately $1.3bn, comprising $1.1bn upfront and a possible 2026 earnout.
The earnout depends on net revenue thresholds and positive EBITDA, placing the operator's fourth-quarter results under scrutiny. More than one-third of its 2025 revenue came in that final quarter.
The investor materials supply an estimated absolute net revenue figure, but do not disclose Underdog's third-quarter EBITDA or net income. Both measures remain unavailable for this quarterly comparison and the third-quarter estimates have yet to become final reported results.
In September, Underdog sued New Mexico officials to challenge the possible application of state gambling law to its federally regulated prediction market activities, illustrating the regulatory uncertainty surrounding the expansion outlined to investors.
IG expects to settle roughly 60% of the upfront consideration in new shares and 40% in cash
