Flutter Entertainment Reports Robust Q1 Revenues Amidst Compelling US Growth
Flutter Entertainment, a major player in the global betting landscape, shared its latest financial results on Wednesday, underscoring its positive trajectory in the US market. The company reported a remarkable group revenue of $3.66 billion for the first quarter, marking an 8% increase compared to the same quarter last year. The adjusted EBITDA surged to $616 million, reflecting a year-over-year rise of 20%, while net income skyrocketed 289% to $335 million.
Flutter’s performance is supported by impressive metrics, including an 8% rise in its average monthly player base, which now stands at 14,880. While the company maintains $1.5 billion in cash, net debt currently rests at $5.3 billion. It’s important to note that Flutter’s results fell short of market expectations, which had projected revenues of $3.96 billion and earnings per share of $2.05. Consequently, shares dipped by 1%, closing at $242.36.
The US sector, propelled by FanDuel, experienced a notable revenue growth of 18% year-over-year, bringing in $1.66 billion along with an impressive $161 million in adjusted EBITDA—five times the previous year’s figures. Conversely, the international revenue witnessed a modest increase of 1%, nearing $2 billion, coupled with a slight decrease in adjusted EBITDA to $518 million. However, when taking constant currency into account, these figures adjust positively to 3% and 2% growth, respectively.
"I am encouraged by our first-quarter performance, particularly the advancements in our US segment, which significantly enhance our overall earnings profile," commented Flutter CEO Peter Jackson. He emphasized FanDuel’s dominance in the US market for both online sports betting and iGaming, while also acknowledging the positive contributions from international operations, particularly following the acquisition of Snai in Italy.
Spotlight on FanDuel’s Dominance
Flutter highlighted that sports betting and iGaming revenue in the US grew by 15% and 32% year-over-year, respectively, with average monthly players increasing by 11% over the previous year. Currently, FanDuel commands 43% of the sports betting market and 23% in iGaming.
This growth is impressive, especially considering the mixed outcomes of the March Madness tournament, which saw all four top-seeded teams reach the Final Four. Analysts within the industry noted that the overall handle growth of 8% matched expectations, although there were questions surrounding the lowered basketball handle.
CFO Rob Coldrake remarked that while handle figures are essential, the focus is primarily on net revenue. Flutter has reduced its annual US revenue outlook from $7.43-$7.93 billion to a revised estimate of $7.15-$7.65 billion.
Addressing economic uncertainties related to US tariffs and potential recessions, Jackson asserted the resilience of the online gaming sector. "We believe that both online sports betting and iGaming possess strong defensive characteristics for the long haul," he stated, reassuring stakeholders of growth prospects despite any short-term setbacks.
Exploring New Avenues in Prediction Markets
In a noteworthy development, Jackson elaborated on Flutter’s endeavors in prediction markets. With the existing ownership of the Betfair betting exchange, Flutter seems eager to explore this burgeoning field rather than confront it.
"We’re keen on the opportunities ahead and have integrated some experienced team members from Betfair into FanDuel to assess these possibilities," he explained. The legal climate surrounding prediction markets remains favorable, as exemplified by Kalshi’s successful navigation of legal hurdles. Earlier, it was reported that DraftKings, a key competitor, had withdrawn its application for “DraftKings Predict” with the National Futures Association after initially filing.
Jackson answered inquiries regarding the impact of federally legal prediction markets on the broader sports betting landscape: "If these markets expedite the rollout of legal sports betting, we would certainly welcome that."
While Flutter has previously navigated the challenging liquidity landscape associated with traditional betting exchanges, Jackson noted that a nationwide prediction market offering could overcome these issues.
Steady International Growth
Though Flutter’s international performance received less emphasis in itself, the company reported positive developments in key non-US markets. Revenue rose by 2% for the UK and Ireland, while southern Europe and Africa jumped by 14%. Central and Eastern Europe noted a growth of 15%, although some regions, such as Asia and Brazil, exhibited declines.
One critical topic was Flutter’s bid for the lucrative Italian lottery, filed in partnership with Scientific Games. Competing against IGT, Flutter aims to secure a nine-year contract, capitalizing on Sisal’s established presence, which already manages prominent lotteries in Italy and Turkey.
Coldrake characterized this opportunity as significant for market share expansion in Italy, deeming it "low risk but highly profitable." He also mentioned that Flutter doesn’t necessarily aim to pursue further lottery tenders.
By focusing on strategic growth areas and exploring innovative ventures in prediction markets, Flutter aims to reinforce its position as a leader in the dynamic betting sector, navigating challenges while capitalizing on emerging opportunities.