Flutter revenue jumps 20% on the back of strong FanDuel gains

Flutter Entertainment has posted a 20% year-on-year (YoY) leap in Q2 revenue to $3.6bn as US revenue alone soared 39% to more than $1.5bn for the FanDuel parent company.

Total adjusted EBITDA for the group climbed 17% from $633m to $738m, while average monthly players (AMPs) increased 17% to 14.3 million.

Meanwhile, net income skyrocketed 364% from $64m to $297m, while total debt as of 30 June sat at $6.8bn, down from $7.1bn as of 31 December.

Investors reacted positively to the top- and bottom-line growth, sending the share price on the New York Stock Exchange up more than 9% in post-market trading.

USA, baby

FanDuel, the US sports betting and igaming market leader, remains the growth driver of the group, with AMPs in the US hitting 3.5 million, a 27% YoY increase from Q2 2023.

The brand also took its sports betting gross revenue market share to 47%, while net revenue share was 51%.

FanDuel’s total Q2 GGR market share across sports betting and igaming landed at 38%, with the brand snaring 25% of the online casino market on a GGR basis.

Adjusted EBITDA in the US surged 51% YoY, from $172m to $260m, as bosses pointed to a sustained pipeline of gains Stateside.

Management noted “compelling unit economics” were supporting customer acquisition aims, with FanDuel taking a 59% share of North Carolina, which launched online sports betting in March.

Online revenue from states launched in 2022 and 2023 were up 45% in the reporting period, while states that regulated online sports betting prior to 2022 saw revenue jump 33%.

In fact, customer acquisition in pre-2022 regulated states has risen 16%, alongside an increase in AMPs and stakes by 20%.

On the sports betting front, Flutter pointed to success delivered by the Flutter Edge, or how the company cherry picks technology and talent from its global operations to push ahead in the US.

Management added that it had been able to deliver its “most comprehensive NBA offering to date” as improvements across prop markets and its in-play same game parlay (SGP) leading to sportsbook average monthly player growth of 30%.

In igaming, FanDuel’s AMPs grew 30% YoY, with direct-to-casino acquisition increasing 58% and icasino market share improving by four percentage points.

The company added that it completed the “significant milestone” in Q2 of migrating FanDuel Casino to its proprietary tech stack, a move the company said will, over time, provide FanDuel with access to in-house content, more integrated cross-product promotional capabilities and greater platform stability.

Additionally, Flutter revealed it would not be following DraftKings’ plans for a gaming tax surcharge on players’ winnings in high-tax states from January 2025.

Yet in quite the U-turn, DraftKings announced shortly after Flutter’s results were published that the Boston-based operator would not be proceeding with the surcharge after listening to customer feedback.

Flutter singled out Illinois, a state which introduced a graduated tax framework from 1 July, and said it expects to mitigate 50% of the costs from the tax hike in Illinois via “locally optimized promotional and marketing spend”.

Flutter added: “This is prior to second order mitigation impacts such as in-state market share gains, which we have typically observed market leaders such as FanDuel to benefit from over time when regulatory changes are introduced.”

And the rest

Elsewhere, Flutter’s global portfolio of brands also performed well, as revenue increase 10% to $2.1bn and adjusted EBITDA rose 4% to $478m.

Average monthly players jumped 15% from 9.5 million to 10.9 million, with the UK and Ireland and various international markets offsetting a 10% revenue decline in Australia.

In the UK and Ireland, revenue leapt 18% from $789m to $928m, alongside a corresponding adjusted EBITDA rise of 18% from $249m to $293m.

Within the market, sportsbook revenue increased 12% YoY, while online casino revenue improved by 25%.

Flutter said its UK and Ireland arm, consisting of Paddy Power, Sky Bet, Betfair and Tombola, benefited from Euro 2024 – with the tournament accounting for 10% of all stakes in the period.

Paddy Power was able to double the volume of stakes on the tournament compared to World Cup 2022, while the launch of Super Sub on Paddy Power and QuickBuild bet builders on Sky Bet helped drive engagement.

Overall sportsbook net revenue margin rose 170 basis points to 14%.

In igaming, there was a 14% rise in AMPs, as bosses also talked up the sportsbook-to-casino acquisition pipeline, with 43% of Euro 2024 bettors engaging with online casino.

On the international front, which includes Flutter’s operations across Brazil, Italy, India and a host of European markets, revenue rose 11% to $807m as adjusted EBITDA increased 8% to $156m.

A 24% spike in AMPs, driven by Euro 2024 and the prior acquisition of Serbian brand MaxBet, helped the division push ahead.

Revenue growth, on a constant currency basis, was reported in Italy (12%), Georgia (20%), Spain (11%) and Brazil (11%). Turkey alone reported 35% growth in revenue, where the Sisal runs the lottery.

An 8% decline in India, where Flutter operates poker and rummy brand Junglee, came with the caveat of the rise in the Goods and Services Tax to 28% in the Asian nation.

Australia continues to remain the blemish on the Flutter record, with revenue slumping 10% to $349m and adjusted EBITDA plummeting 31% to $74m.

Despite AMPs improving 5%, a decline in stakes by 8% on the back of “racing market challenges and regulatory and compliance costs” had an impact.

Looking ahead

As a result of the Q2 performance, Flutter has raised its full-year 2024 guidance, citing positive sports results and momentum heading into Q3.

In turn, US revenue guidance has been lifted from a previous range of $5.8bn to $6.2bn to $6.05bn to $6.35bn. The midpoint of adjusted EBITDA in the market has been bumped up to $740m, a 4% rise on the previous guidance.

However, Flutter said there will be a small adjusted EBITDA loss in Q3 as the NFL season kicks off in line with planned investment, with the majority of EBITDA to come in Q4.

In Illinois, an initial $50m gross impact is expected from the tax changes, with the initial mitigation resulting in a $10m saving, taking total impact to $40m.

Outside of the US, revenue midpoint is guided at $8bn, with adjusted EBITDA’s midpoint forecast to be $1.77bn, representing an increase on the previous guidance of 8% and 2%, respectively.

Peter Jackson, Flutter CEO, said: “Flutter delivered another strong quarter, beating consensus and increasing our revenue and adjusted EBITDA guidance as we continued to capitalise on our global scale and the Flutter Edge.

“Our US performance was excellent in new and existing states reflecting our disciplined approach to customer acquisition and our best-in-class product, which offers our sportsbook customers the best pricing in the market.

“We achieved important milestones during Q2, as the NYSE became our primary listing and we moved our operational headquarters to New York. This reflects the importance of the US market to Flutter and our view that the US is the natural home for our business.”