Flutter Entertainment (NYSE:FLUT; LSE:FLTR) (“Flutter”), the
world's leading online sports betting and iGaming operator today
announces a brief update on the impact of US sports results on Q4
2024 trading.
Following our Q3 earnings report on November 12, continued
strong US player momentum has been offset by a period of very
unfavorable US sports results across the remainder of November and
in December, primarily on NFL Parlay and Same Game Parlay outcomes.
The 2024/2025 NFL season to date has been the most customer
friendly since the launch of online sports betting with the highest
rate of favorites winning in nearly 20 years.
The transitory nature of these results has no impact on the
underlying assumptions and guidance expectations communicated at
our Investor Day in September1, and we remain confident in the
growth drivers and long-term growth trajectory set out at the
Investor Day.
These customer friendly results generated an estimated adverse
gross gaming revenue (GGR) impact of $438m, and estimated
reductions in revenue of approximately $390m2 and Adjusted EBITDA3
of approximately $260m4, for the period November 12 to December
31.
US revenue for 2024 is therefore now estimated to be c. $370m
lower than our previous guidance midpoint at approximately $5.78bn
(previous guidance $6.05bn - $6.25bn). After incremental one-off
cost mitigation5, 2024 US Adjusted EBITDA is estimated to be
approximately $205m lower than the previous guidance midpoint at
approximately $505m (previous guidance $670m - $750m).
Our revised expectations include Q4 sportsbook net revenue
margin of 6.6% reflecting:
- Structural revenue margin of 14.5%, broadly in line with
expectations and reflecting an increase of 100 basis points
year-over-year. This was driven by FanDuel’s strong parlay product
offering combined with the seasonally higher-margin sports mix
- Unfavorable sports results of 390bps (Q4 2023: 240bps
unfavorable)
- Promotional spend of 4.0%, a reduction of 20 bps year-over-year
as mitigation against adverse sports outcomes more than offset the
previously communicated increased investment in new player
acquisition volumes
Q4 US revenue is therefore now expected to be approximately
$1.59bn and Q4 US Adjusted EBITDA is estimated to be approximately
$161m, reflecting an overall estimated adverse Q4 sports results
impact totaling $643m in GGR, $550m in revenue and $360m in
Adjusted EBITDA.
In the Group Ex-US, continued good momentum in UKI in particular
with favorable sports results in the English Premier League, means
we now estimate 2024 revenue and Adjusted EBITDA will be
approximately 1% and 2% higher than the mid-points of our previous
guidance provided at Q3.
A more detailed update will be provided with our scheduled Q4
earnings on March 4, 2025, alongside formal guidance for 2025.
This announcement contains inside
information as defined under assimilated Regulation (EU) No.
596/2014, which is part of the laws of the United Kingdom by virtue
of the European Unition (Withdrawal) Act 2018 (as amended). The
person responsible for arranging release of this information on
behalf of Flutter is Edward Traynor, Company Secretary of
Flutter.
Notes
- 2027 Revenue and Adjusted EBITDA guidance was provided at our
Investor Day on September 25 for Flutter Group, along with
forward-looking commentary on potential US 2025 revenue and
Adjusted EBITDA margin accretion. Our 2025 comments, to which there
are no changes, are based on our 2024 revenue and Adjusted EBITDA
guidance per our Q2 earnings on August 13, 2024 (midpoints of
$6.2bn and $740m respectively).
- The lower-than-normal level of customer generosity mitigation
(where customer generosity reflects variable promotional spend
accounted for as a deduction from gross gaming revenue) reflects
both the distribution of winnings to a narrow range of customers,
and the timing of adverse sports results within the quarter, with
significant adverse results occurring on December 30.
- Beginning January 1, 2024, the Group revised its definition of
Adjusted EBITDA, which is the segment measure used to evaluate
performance and allocate resources. The definition of Adjusted
EBITDA now excludes share-based compensation as management believes
inclusion of share-based compensation can obscure underlying
business trends as share-based compensation could vary widely among
companies due to different plans in place resulting in companies
using share-based compensation awards differently, both in type and
quantity of awards granted.
- The estimated adverse Adjusted EBITDA impact reflects the
estimated gross profit impact and is before any sales and
marketing, or operating cost mitigation
- Primarily reflecting estimated sales and marketing cost
reduction and phasing benefits, and an estimated reduction in
variable employee salary accruals.
Clarification on basis of preliminary financial
information
As at the date of this release we have not completed our
financial closing procedures for the period ended December 31,
2024. The preliminary financial information included in this
release may therefore be subject to change as we complete our
financial reporting processes and controls.
Additionally, our independent registered public accounting firm
has not audited, reviewed, compiled or performed any procedures
with respect to the preliminary financial information and does not
express an opinion or provide any other form of assurance with
respect to this preliminary financial information. During the
course of the preparation of our consolidated financial statements
and related notes as of and for the period ended December 31, 2024,
we may identify items that would require us to make adjustments to
the preliminary financial information presented above. As a result,
investors should exercise caution in relying on this information.
The preliminary financial information should not be viewed as a
substitute for full financial statements prepared in accordance
with U.S. GAAP.
Forward-Looking Statements
The preliminary financial information included in this press
release is preliminary, unaudited and subject to completion and may
change as we complete the operating of our financial reporting
processes and controls. See “Clarification on basis of preliminary
financial information” above. This press release contains
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements reflect
our current expectations as to future events based on certain
assumptions and include any statement that does not directly relate
to any historical or current fact. These statements include, but
are not limited, to statements related to our expectations
regarding the performance of our business, our financial results,
our operations, our liquidity and capital resources, the conditions
in our industry and our growth strategy. In some cases, you can
identify these forward-looking statements by the use of words such
as “outlook”, “believe(s)”, ”expect(s)”, “potential”,
“continue(s)”, “may”, “will”, “should”, “could”, “would”,
“seek(s)”, “predict(s)”, “intend(s)”, “trends”, “plan(s)”,
“estimate(s)”, “anticipates”, “projection”, “goal”, “target”,
“aspire”, “will likely result”, and or the negative version of
these words or other comparable words of a future or
forward-looking nature. Such forward-looking statements are subject
to various risks and uncertainties. Accordingly, there are or will
be important factors that could cause actual outcomes or results to
differ materially from those indicated in these statements. Such
factors include, among others: the preliminary nature of the
financial information include in this press release as discussed in
“Clarification on basis of preliminary financial information”
above, Flutter’s ability to effectively compete in the global
entertainment and gaming industries; Flutter’s ability to retain
existing customers and to successfully acquire new customers;
Flutter’s ability to develop new product offerings; Flutter’s
ability to successfully acquire and integrate new businesses;
Flutter’s ability to maintain relationships with third-parties;
Flutter’s ability to maintain its reputation; public sentiment
towards online betting and iGaming generally; the potential impact
of general economic conditions, including inflation, fluctuating
interest rates and instability in the banking system, on Flutter’s
liquidity, operations and personnel; Flutter’s ability to obtain
and maintain licenses with gaming authorities, adverse changes to
the regulation (including taxation) of online betting and iGaming;
the failure of additional jurisdictions to legalize and regulate
online betting and iGaming; Flutter’s ability to comply with
complex, varied and evolving U.S. and international laws and
regulations relating to its business; Flutter’s ability to raise
financing in the future; Flutter’s success in retaining or
recruiting officers, key employees or directors; litigation and the
ability to adequately protect Flutter’s intellectual property
rights; the impact of data security breaches or cyber-attacks on
Flutter’s systems; and Flutter’s ability to remediate material
weaknesses in its internal control over financial reporting.
Additional factors that could cause the Company’s results to
differ materially from those described in the forward-looking
statements can be found in Part I, “Item 1A. Risk Factors” of the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023 as filed with the SEC on March 26, 2024 and other
periodic filings with the SEC, which are accessible on the SEC’s
website at www.sec.gov. Accordingly, there are or will be important
factors that could cause actual outcomes or results to differ
materially from those indicated in these statements. These factors
should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included
in the Company’s filings with the SEC. The Company undertakes no
obligation to publicly update or review any forward-looking
statement, whether as a result of new information, future
developments or otherwise, except as required by law.
About Flutter Entertainment plc
Flutter is the world’s leading online sports betting and iGaming
operator, with a market leading position in the US and across the
world. Our ambition is to leverage our significant scale and our
challenger mindset to change our industry for the better. By
Changing the Game, we believe we can deliver long-term growth while
promoting a positive, sustainable future for all our stakeholders.
We are well-placed to do so through the distinctive, global
competitive advantages of the Flutter Edge, which gives our brands
access to group-wide benefits to stay ahead of the competition, as
well as our clear vision for sustainability through our Positive
Impact Plan.
Flutter operates a diverse portfolio of leading online sports
betting and iGaming brands including FanDuel, Sky Betting &
Gaming, Sportsbet, PokerStars, Paddy Power, Sisal, tombola,
Betfair, MaxBet, Junglee Games and Adjarabet.
Non-GAAP financial measures
This press release includes non-GAAP financial measures that we
use to supplement our results presented in accordance with U.S.
generally accepted accounting principles (“GAAP”). We believe these
measures provide visibility to the performance of our business by
excluding the impact of certain income or gains and expenses or
losses. Additionally, we believe these metrics are widely used by
investors, securities analysts, ratings agencies and others in our
industry in evaluating performance. Our non-GAAP financial measures
may not be comparable to similarly-titled measures used by other
companies, have limitations as analytical tools and should not be
considered in isolation. Additionally, we do not consider our
non-GAAP financial measures as superior to, or a substitute for,
the equivalent measures calculated and presented in accordance with
U.S. GAAP. Additional information regarding these measures can be
found in our periodic filings with the SEC, which are accessible on
the SEC’s website at www.sec.gov.
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version on businesswire.com: https://www.businesswire.com/news/home/20250107289133/en/
Investor Relations: Email:
investor.relations@flutter.com
Media Relations: Email: corporatecomms@flutter.com
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