Flutter Entertainment has posted a 27% year-on-year (YoY) increase in revenue to $3.2bn as a spike in average monthly players has led to the FanDuel parent company increasing its full-year guidance.
Revenue increased from the $2.6bn reported in Q3 2023 due to a combination of a “strong start” to the NFL season and “strong momentum” in the UK and Ireland (UKI) driven by Euro 2024.
Average monthly players leapt 16% YoY from 11.1 million to 12.9 million as Flutter also noted a 74% soaring in adjusted EBITDA from $258m to $450m.
The group’s corresponding adjusted EBITDA margin also rose 380 basis points to 13.9%.
In after hours trading in New York, Flutter shares were up almost 5% at the time of writing.
US: A “clear leadership position”
FanDuel continued to deliver for the operator during the three months to 30 September, with US revenue up 51% YoY from $828m to $1.25bn.
Sports betting revenue rose 62% to $822m while igaming revenue jumped 46% to $368m, while average monthly players (AMPs) grew 28% to 3.2 million.
On the sports betting front, Flutter said “new and enhanced” features ahead of the new NFL season had played a key role in the spike.
Features such as expanded player prop markets and the ‘Your Way’ product, with the latter trialled in two states during the quarter, were talked up by bosses.
In turn, sports betting stakes improved 36% YoY, with staking also growing 23% against pre-2022 regulated states.
Adjusted EBITDA in the US swung from a loss of $55m to a positive return of $58m, which management said demonstrated the “ongoing transformation of our US earnings profile”.
Positive sports betting results were able to offset the Illinois tax hike that was implemented at the start of July, with FanDuel now subject to a 40% rate in the state.
Flutter said its total US market share, based on GGR, now sits at 35% for both sports betting and online casino.
Online sports betting market share is 41%, with igaming market share at 25%, according to the operator.
On home turf
In the UK and Ireland (UK&I), with its Sky Bet, Paddy Power, tombola and Betfair brands, Flutter saw revenue rise 18% YoY from $719m to $846m.
AMPs jumped 13% on the back of an “expanded product proposition”, which has seen a 142% increase in bet builders being placed against Q3 2022.
Additionally, 64% of those bet builders include markets which were only created in the last two years.
Sports betting revenue in UK&I was up 9% to $356m, while igaming continued to put in a strong showing with revenue up 29% to $454m. Adjusted EBITDA also rose 29% to $237m.
Earnings were boosted with marketing spend being front loaded in Q2 ahead of Euro 2024 and, coupled with positive results, helped the New York-listed firm make gains.
Flutter did not make reference to its retail estate in the UK&I as part of its earnings report breakdown.
M&A makes hay
The group’s international division, which comprises multiple brands including Sisal in Italy and MaxBet, had a revenue increase of 15% in Q3 to $781m.
Sisal was the key driving force behind the segment, while management said that MaxBet had contributed $50m in revenue for the quarter after being acquired in January.
The firm’s consolidate and invest markets all reported growth bar India, where revenue was 17% down YoY due to tax changes introduced in October 2023.
However, Flutter’s Junglee Games brand did note a doubling of revenue in October alone as the tax hike to 28% was lapped.
Elsewhere, Brazil revenue was up 10% YoY where Flutter will look to make greater inroads after snapping up Betnacional, while Georgia (21%), Armenia (14%) and Turkey (104%) all reported increases.
Australia revenue was up 12% and adjusted EBITDA rose 14% as the market returned to solid growth after a period of softness. AMPs were also up 6%.
A series of positive sporting results were able to offset an 8% decline in stakes and the headwinds faced against tax hikes in Victoria.
Looking ahead
Following the release of the earnings report, Flutter has risen its non-US guidance from a revenue range of $7.85bn to $8.15bn up to $8.1bn to $8.3bn, with adjusted EBITDA expected to land between $1.77bn and $1.87bn.
However, in the US, the Q3 performance has been “more than offset by unfavourable sports results in Q4 to date”.
As a result, US revenue should hit between $6.05bn and $6.25bn, with adjusted EBITDA between $670m and $750m.
Flutter’s previous US adjusted EBITDA guidance ranged from $680m to $800m.
Peter Jackson, Flutter CEO, said the Q3 performance for the operator was “well ahead of market expectations” as he talked up gains in the US and internationally.
He said: “In the US, we had a fantastic start to the new NFL season with peak wagers per minute already higher than Super Bowl LVII.
“Our proprietary product offering continued to drive strong parlay penetration as well as a step up in live betting handle.
“Outside of the US, all divisions delivered a strong performance in the quarter as they leveraged the benefits of the Flutter Edge.
“In UK&I, a broader product range across both sports and igaming drove player and revenue growth. Sisal continued to make significant share gains in Italy as we look to expand our presence there with the addition of Snaitech. In Australia, Sportsbet has been demonstrating encouraging trends,” he added.
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