Flutter racks up $1.21bn net loss for FY2023 despite strong FanDuel gains

Flutter Entertainment has reported a 24.6% year-on-year (YoY) jump in full-year 2023 revenue amid a $1.21bn net loss for the online heavyweight.

The dual-listed firm once again hailed the performance of FanDuel in the US as a core driver of soaring topline growth in 2023.

However, a net loss of $1.21bn was recorded, up 227% on the negative $370m posted in 2022, due to several non-cash expenses.

These include a loss of $725m relating to an impairment of trademarks associated with the PokerStars brand and a charge of $791m due to amortisation of acquired intangibles.

Flutter also noted a $165m loss relating to a change in the fair value of the Fox option liability.

Despite the reported net loss, total group revenue landed a $11.8bn for full-year 2023, coupled with adjusted EBITDA rising 46.9% to $1.7bn.

FanDuel becomes “transformational”

Regionally, the US remains the jewel in the crown for Flutter as revenue rose 40.7% YoY to $4.5bn alongside a positive EBITDA return of $65m against 2022’s loss of $347m.

Flutter pointed to a 45.9% jump in sports betting revenue, with the vertical benefitting from three new state launches, a full-year contribution from 2022 launches and 24.8% growth in pre-2022 states.

The firm noted FanDuel was firmly the leading sportsbook operator in the US, with an NGR market share of 53.4% and a GGR market share of 43.2% for Q4 2023.

Gaming revenue in the US jumped 47.2% as active monthly players rose 41.8%. The firm pegged igaming market share at 25.7% for Q4, putting it behind DraftKings, although management added that FanDuel took the lead in January 2024.

“Product innovation” helped FanDuel acquire more than 3.7 million new users in 2023, a 19% increase, with the company noting the “average projected payback” period on acquiring customers to be less than 18 months.

Excluding the US, revenue increased 16.4% to $7.3bn, with EBITDA improving 8.4% over the same period to $1.6bn.

While Australia continues to face difficulties, with revenue down 7.1% and EBITDA dropping 27%, the UK and Ireland and International arms showed growth.

In the UK and Ireland, revenue rose 14.4% to just over $3bn, with EBITDA for the region up 17.2% to $888m.

Flutter said a “continued expansion” of the recreational customer base was a core driver, with average monthly players up 5.4%. Sports betting revenue rose 10.5% while gaming revenue was up 18.1%.

On the International front, with the division including Sisal, Betfair, Junglee and the newly acquired MaxBet, revenue climbed 36.8% YoY as average monthly players increased 31%.

Bosses noted strong growth in Turkey (+36.2%) and India (+15%), with smaller increases for Brazil (6.5%) and Italy (+10%).

Peter Jackson, Flutter CEO, said the group had managed to take market share in the US, made “excellent progress” integrating lottery giant Sisal into the business and said FanDuel had “transformed” the group’s earnings profile.

Looking ahead

The operator also provided a Q1 trading update in which total revenue rose 23.4% YoY on the back of a strong showing in the US.

US revenue increased 55.6% in the first three months of the year compared to the same period in 2023, with sports betting revenue up 63.7% with stakes increasing 19.6%. Sportsbook net revenue margin was up 230 basis points.

Online gaming revenue from the US rose 50.3%, with Flutter citing a larger player base and continued product improvement. Excluding new state launches, revenue increased 34.1%.

The firm also noted that PokerStars’ US business will no longer be included in the US division, with the operations shifting to Flutter’s International arm for future reporting purposes.

Outside of the US, UK and Ireland revenue jumped 17.3% in Q1, while Australia revenue slipped 8.8% compared to Q1 2023.

On the International front, revenue rose 3%, with the benefits of the addition of Serbian firm MaxBet being offset by customer friendly sports results in Italy.

In terms of the full-year 2024 outlook, Flutter has pegged US revenue at a midpoint of $6bn, with corresponding EBITDA of £710m.

This would put US revenue growth at 36.3% and EBITDA soaring 206.1%.

Excluding the US, revenue is forecast to settle between $7.65bn and $8.05bn, with EBITDA in a range of $1.63bn and $1.83bn.

Jackson said 2024 had started with “very good momentum” as he pointed to continued growth in North America.

“Record Super Bowl engagement contributed to US revenue growth of 55.6% for the period from 1 January to 17 March,” he said.  

“We also launched in North Carolina where we have been really pleased with performance to date. Outside of the US, revenue grew 6.3% as the market-driven decline in Australia was more than offset by the growth of our UK and Ireland and other International businesses.

“We believe that our strategy and competitive advantages position us well to continue to grow the business through both organic and inorganic opportunities,” he added.

Flutter’s London-listed shares were up just over 2% in early trading to £167.70.