Flutter Entertainment CEO Peter Jackson and CFO Rob Coldrake fielded analyst questions for around 45 minutes yesterday evening, 26 February, as the operator’s stock slumped in after-hours trading in New York. Missed Wall Street consensus for 2025 estimates and softer EBITDA growth forecast for 2026 saw the stock down more than 7% after the closing bell rang. The stock has slipped further in pre-market.
While that was playing out, analysts pushed Jackson and Coldrake on the topic du jour, prediction markets. Jackson was also candid when discussing missteps with FanDuel’s generosity strategy in Q4 as gross revenue margins hit around 19% during NFL season, while Coldrake was equally open when discussing how rivals had closed the product gap on the US market leader.
Here, EGR picks out some key themes from the earnings call, including Jackson batting away a question on acquiring a designated contract market licence and how a struggling long tail in UK igaming post-tax hike could benefit Flutter’s brands.
Just the 20 mentions
While prediction markets took up less airtime on Flutter’s call than it did on rival’s DraftKings, Jackson was still bullish on FanDuel Predicts’ ability to become a leader in the space. Having launched with sports event contracts in 18 states in December, as well as nationally with financial-related markets, Coldrake revealed the investment in the platform came in below the guided $45m in Q4. However, the earnings report stated Flutter expects to spend closer to $300m as part of the investment this year, while not projecting any revenue from the vertical for full-year 2026.
During the call, Jackson wouldn’t be drawn in on whether Flutter was planning to apply for designated contract market (DCM) licence with the federal regulator, the Commodity Futures Trading Commission. FanDuel Predicts is a JV supported by CME Group – operator of derivative markets including the Chicago Mercantile Exchange – with Jackson stating he was “very happy” with the partnership.
Plans around market-making were also mentioned, similar to how DraftKings announced it was looking into offering this functionality, too.
On wider plans for FanDuel Predicts, Jackson said: “We have plans to improve the breadth and quality of the product over the course of this year. There’s obviously the World Cup coming up shortly, which is going to be a very important opportunity for us. “There’s lots of product enhancements we intend to make over the course of the year before we get to the start of the NFL.
“It is an opportunity for us to acquire customers in advance of states regulating. We do think it will help hasten the regulation of igaming and online sports betting. We’ve got an extensive team who are focused on this and we’re having some very fruitful conversations at the moment.”
Blame Taylor Swift
While sports betting revenue in the US jumped 35% to $1.5bn, handle only rose 3%. Flutter pointed to an “unfavourable recycling impact” that meant customers were spending less. Higher revenue margins in the NFL, alongside “less compelling content”, were cited as core reasons.
“The second half the 2025-2026 NFL season saw less compelling content, with fewer favourites making the playoffs and fewer player narratives capturing the imagination of bettors,” Flutter noted.
Cast your mind back to the NFL playoffs last year, and one couldn’t move for seeing Taylor Swift and Travis Kelce content. The fact last year’s Super Bowl between the Kansas City Chiefs and the Philadelphia Eagles also had star quality with the likes of Patrick Mahomes and Saquon Barkley, as well as Kelce, similarly drove huge amounts of interest.
Management added: “At this point, however, it is difficult to be definitive as to when market handle growth rates will recover from the impact of Q4 recycling, and we continue to monitor trends closely.”
On the call, Jackson remarked: “We’ve seen a margin of 19% across the full football season. When you compare that with last year and the very substantial step up in margin, you would expect to see a commensurate drop in handle.
“It’s the math in terms of how it works from the customer player. That phenomenon of recycling and the impact that margin has on growth of stakes is something we’ve seen before.
“When you look at the quality of the teams who got to the [NFL playoffs], there were a lot less key marquee players involved. And that has a significant impact for us because of our dependence on the parlay market. I suspect we saw lower levels of parlay penetration than we would otherwise have done if we’d have had matchups like we had last year.”
Got it wrong
Bosses admitted the generosity playbook in the US was “less effective” in Q4, as investment did not align with operator-friendly sports betting results. For around 11 weeks, the NFL season was delivering a margin of over 30% for FanDuel, which management said had a “real impact on consumer sentiment”. Flutter noted it saw a “higher churn” within the customer base and lost market share as a result. Jackson said plans were now in place to address these issues, while reflecting on what went wrong in Q4.
“It’s fair to say we didn’t execute our generosity strategy as well as we should have done. We pushed hard in the beginning of Q4,” the CEO stated.
“When you look at the pattern of gross win margin throughout the backend of Q4, we saw a sustained period of above 30%. We should have pushed harder generosity at those points, and we didn’t.
“That’s something we will address and make sure we incorporate into our playbook for the future. This isn’t about putting more money on the table. This is about using what we have in a smarter way. One of the issues in Q4 was it was a bit of a whipsaw where generosity was on and off and on and off. I think we were probably causing a bit of confusion among our customers, and we’re just not deploying it correctly.”
Tale of the tail
The UK got a brief mention during the Q&A portion of the call, with Macquarie’s Chad Beynon asking what impact bosses were expecting to see. Remote gaming duty is due to jump from 21% to 40% come April, while remote general betting duty will increase from 15% to 25% in April 2027. Flutter runs Sky Betting & Gaming, Paddy Power, tombola and Betfair in the market.
After the measures were announced in the Autumn Budget in November, Flutter said it would face a net impact of $235m in 2026 and $339m in 2027, after implementing mitigation plans.
On the call, Coldrake confirmed market share gains very much remain in Flutter’s eyeline, as smaller brands exit the market. For example, Aristocrat Interactive has pulled its white-label offering in the UK and its slew of other brands have shuttered their casino sites.
He said: “We laid out our top-level plans for mitigation when the changes were introduced in Q4 last year. To this point, we’re not seeing anything different to what we’d anticipated in terms of activity.
“It’s early days because the tax changes don’t actually hit until April. What we expect will happen is people will start to moderate behaviour from that point onwards.
“If you think about the market share of igaming in the UK, there’s a very long tail. There’s 30% of the market share in the long tail, with much inferior economics to us. Given our scale, we fully anticipate there’ll be some changes in marketing and generosity dynamics as we move through the year.”
Keep the edge
A note in the earnings report highlighted “improved competitor product offerings” were having a potential drag on Flutter. The group has long touted the benefits of the ‘Flutter Edge’ – the mechanism by which the operator draws on product experience and innovation from its global stable of brands to support launches in other markets. For example, Paddy Power’s Super Sub promotion was taken from Sisal Italy, and has now been replicated across the UK and Ireland by other sportsbooks.
More product plans are in the pipeline, including adding in-house pricing and bet builders to Brazil and migrating Snaitech to the Flutter platform in H1. Coldrake noted it was less a case of Flutter’s product becoming softer, but its rivals having closed the previously larger gap.
The CFO said: “We don’t necessarily think this is something that’s not worked for us per se, but more a bit of a narrowing of the gap in terms of the product advantage we’d typically held over the last few years.
“We’re looking to double down on the product advantage we’ve had previously. We’re working on a number of things, both in the US and in our international business. We’re looking at differentiation and innovation and really enhancing our SGP [same game parlay] offering. In Italy, our [bet builder] myCombo product is working extremely well for us and allowed us to take the leadership position back.
“The other piece is our outcome-based pricing and how this really provides the structure and the foundations behind our product innovation and improvements moving forward. We remain incredibly excited about this. It’s taking a little while to work through, but we expect this to be a significant product advantage.”
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The post Five things we learned from Flutter’s Q4 earnings first appeared on EGR Intel.
News editor Joe Levy wades through the FanDuel parent company’s latest call, with insights on plans for prediction markets and UK tax hike mitigation strategies
The post Five things we learned from Flutter’s Q4 earnings first appeared on EGR Intel.