Flutter H1 2022 revenue climbs 9% despite double-digit EBITDA loss

Flutter Entertainment has reported a 9% year-on-year (YoY) increase in revenue to £3.4bn on a constant currency (CC) basis for the first half of 2022.

Releasing its financial update for the period, the Dublin-headquartered operator revealed sports betting revenue growth of 10% YoY to £2.1bn, with igaming revenue increasing by 8% to £1.2bn over the same period.

Flutter’s group EBITDA fell 19% YoY to £476m during H1, with group EBITDA losses shrinking by 10% YoY to £608m when excluding the US market.

Flutter’s average monthly player (AMP) base swelled by 14% YoY during H1 2022 to 8.7 million players.

At a divisional level, Flutter’s US business reported a 50% YoY revenue jump to just over £1bn, but with an EBITDA loss of £132m over the H1 period.

The operator highlighted efficient customer acquisition coupled with both good customer economics and operating efficiencies as driving strong performance in the US business but cited the cost of its New York sportsbook launch as offsetting these gains over the H1 period.

US market leader FanDuel accounted for 97% of total US revenue and 80% of the adjusted EBITDA loss during the H1 period.

According to figures provided by the firm, FanDuel now has a 51% share of the online sportsbook market in the US, and an overall combined market share (inclusive of igaming) of 36%.

In the UK, Flutter’s online revenue dipped 13% during H1 to £956m, despite a 12% increase in AMPs during the period. Online adjusted EBITDA declined £95m year-on-year to £303m in H1.

Expanding on the reasons behind these losses, Flutter highlighted the impact of safer gambling measures causing a £48m impact during H1 and a peak in Covid-related player engagement during H1 2021, with average player days down 10% in H1 2022.

The operator also cited the impact of the delayed Euro 2020 tournament on UK and Ireland comparables, with the football tournament contributing £43m in revenue during H1 2021.

In contrast, Flutter’s UK retail business saw revenue jump 227% during H1 2022 to £136m thanks to the post Covid-19 operational environment and its impact on the retail sector.

Overall, UK & Ireland revenue fell by 4% YoY to £1bn, with adjusted EBITDA falling 11% to a positive figure of £321m.

Flutter’s Australian Sportsbet business enjoyed another good financial reporting period, with total revenue rising 5% YoY to £612m and adjusted EBITDA increasing by 10% to £219m.

Australian AMP numbers rose by 11% during H1 to 993,000 players.

In respect of international operations, Flutter’s revenue fell 8% YoY during H1 to £633m, with adjusted EBITDA falling by 32% over the same period to £122m.

While Flutter’s revenue grew 14% in what it dubbed ‘consolidate and invest’ markets including India, Brazil, Georgia, Armenia and Canada, the operator’s H1 fortunes took a hit from regulatory changes and Covid-related comparatives from H1 2021.

H1 adjusted EBITDA was hit by the combined £60m impact of market exits in Netherlands (£20m) and Russia/Ukraine (£20m), along with a gaming tax change in Germany (£20m).

Covid-19 restrictions imposed during H1 2021 contributed a £38m adjusted EBITDA boost, something which was absent from H1 2022’s figures.

Looking forward, Flutter noted it had seen no “discernible signs of a consumer slow down and resultant reduced spending levels” despite the darkening macroeconomic environment.

Commenting on the H1 2022 numbers, Flutter Entertainment CEO Peter Jackson welcomed the “significant progress” which the firm had made against strategic objectives outlined in March.

“We expanded our recreational customer base by over one million players in the half and increased the proportion of customers using safer gambling tools to over one third,” Jackson said.

“We are particularly pleased with momentum in the US where we extended our leadership in online sports betting, with FanDuel claiming a 51% share of the market and number one position in 13 of 15 states, helping contribute to positive earnings in Q2.

“We remain firmly on the path to profitability in 2023, driven by our compelling customer economics and disciplined investment.”

He continued: “Outside of the US, the business remains well positioned thanks to its leadership positions in its mature markets and the investment we are making in attractive, high-growth markets such as India, Canada and Brazil.

“In the UK, while the delay in publishing the gambling act review white paper has been disappointing, we are confident that the safer gambling changes we have already made to date position us well for the future.

“The second half of the year has started well and we look forward to the start of the football seasons in both the US and Europe,” the Flutter CEO concluded.