A Flutter Entertainment, a global leader in sports betting and iGaming with a market capitalization of 45.42 billion dollars and an impressive revenue growth of almost 20% over the last twelve months, announced this Wednesday (8) the financial impact of recent sports betting results in the US on its fourth quarter performance.
According to data from InvestingPro, the company showed strong momentum with a return of 52% last year. The company, known for its popular FanDuel platform, faced a period of results favorable to customers, particularly in NFL Parlay and Same Game Parlay bets, which proved unfavorable for the company's earnings.
Despite the strong ongoing momentum of US players since the third quarter earnings report on 11/12/2022, the latter part of Q4 saw a series of favorites winning NFL games, marking the most customer-friendly season in nearly two decades. This resulted in an adverse impact on Gross Gaming Revenue (GGR) of 438 million dollars and estimated reductions in revenue of approximately 390 million dollars and Adjusted EBITDA of about 260 million dollars for the period from 11/12/2022 to 12/31/2022.
InvestingPro analysis shows that the company maintains a moderate level of debt and is expected to return to profitability this year, with analysts forecasting positive earnings per share of 5.91 dollars for 2024.
As a result, Flutter now estimates that its US revenue for 2024 will be approximately 370 million dollars below the midpoint of the previous guidance, totaling approximately 5.78 billion dollars. The revised US Adjusted EBITDA is expected to be about 205 million dollars lower than the midpoint of the previous guidance, at approximately 505 million dollars, even after considering one-time cost mitigation efforts.
The net revenue margin for sports betting in the fourth quarter is expected to be 6.6%, with a structural revenue margin of 14.5% and an unfavorable impact of sports results of 390 basis points. Promotional spending was reduced by 20 basis points year over year as part of the company's efforts to offset adverse sports results.
In contrast, the Ex-US Group, particularly in the UK and Ireland, experienced favorable sports results, leading to estimated revenue and Adjusted EBITDA for 2024 that will be approximately 1% and 2% higher than the previous guidance.
Flutter Entertainment plans to provide a more detailed update during the scheduled earnings release for the fourth quarter on 3/4/2025, along with formal guidance for 2025. This update is based on a press release and has not yet been audited or reviewed by an independent registered public accounting firm.
Investors are advised to consider the preliminary nature of this financial information. For deeper insights into Flutter's financial health and future prospects, subscribers of InvestingPro can access 12 exclusive ProTips and a comprehensive Pro Research Report, which provides a detailed analysis of the company's valuation, growth potential, and market position among the top 1,400+ US stocks.
In other recent news, Flutter Entertainment experienced significant growth in its financial performance. The company reported a substantial 27% increase in Q3 year-over-year revenue, reaching 3.25 billion dollars, largely driven by a 51% increase in revenue from US operations.
Flutter's adjusted earnings per share also exceeded expectations, reaching 0.43 dollars. These robust financial results led the company to revise its full-year 2024 guidance upwards, now expecting group revenue of 14.25-14.55 billion dollars and an Adjusted EBITDA between 2.44-2.62 billion dollars.
In addition to these financial highlights, Flutter Entertainment initiated a share buyback program, involving the repurchase of up to 350 million dollars in its ordinary shares. This program, part of a larger 5 billion dollar initiative, is managed by Goldman Sachs.
In response to these developments, analysts from Goldman Sachs, Macquarie, Craig-Hallum, and Needham maintained a Buy rating for Flutter and adjusted their price targets.
Furthermore, Flutter Entertainment disclosed transactions in company securities by its management team. This announcement is in compliance with the Disclosure Guidance and Transparency Rules of the UK Financial Conduct Authority.
The company also updated its total voting rights, a routine disclosure for publicly traded companies. These recent developments reflect Flutter Entertainment's commitment to transparency, strategic growth, and strong operational momentum.
Source: Investing.com
