Flutter Entertainment shares surge on the back of 25% jump in FY2023 revenue

Flutter Entertainment has reported a 25% year-on-year (YOY) increase in revenue on a constant currency basis (cc) for full-year (FY) 2023 as a result of strong US performance.

The FTSE 100 firm released a brief trading update today, January 18, in which it also confirmed a 15% YOY jump in revenue jump for Q4 on a cc basis.

The positive results sent the company’s shares soaring almost 12% on the London Stock Exchange in early trading, taking the market cap to more than £25bn.

The announcement today means group revenue for the year rose from £7.7bn in 2022 to £9.5bn last year, with Q4 revenue alone amounting to £2.7bn.

Sports revenue jumped 21% to £5.8bn for 2023 while gaming revenue leapt 29% to £3.7bn.

Average monthly players (AMPs) increased 20% over 2023, from 10.2 million to 12.3 million across Flutter’s global operations.

Breaking down FY2023 revenue by region, the US remains the jewel in the crown for the Dublin-headquartered firm.

The division, which is spearheaded by FanDuel, saw revenue increase 41% in cc from £2.6bn in 2022 to £3.6bn in 2023.

Within this, sports betting revenue increased 39% while igaming shot up 47% over the past 12 months.

AMPs in the US soared 38% to 3.2 million.

Flutter explained that FanDuel remains the leading sportsbook in the US, with a Q4 gross revenue market share of 43% and a 51% net revenue share.

On igaming, the group noted FanDuel Casino continued to make market share gains in Q4, up to 26%.

There were some difficulties in the US during Q4, including a decrease in sportsbook net revenue margin to 7%.

Flutter pointed to “an adverse sports results swing of 320 bps due to very customer friendly sports results” as well as an increase in market spend as the core reasons for the margin decline.

Additionally, those customer friendly sports results led to a $343m hit on revenue during the final quarter of the year, leaving revenue for the period at £1.1bn, which was £147m lower than previous guidance.

Away from the US, Flutter’s UK and Ireland arm was highlighted for taking “market share gains through product improvements” as revenue jumped 14% for FY2023.

Revenue climbed from £2.1bn in 2022 to £2.5bn in 2023, with a 15% rise in online revenue and a 10% jump for the UK&I retail network.

AMPs in the UK&I ticked up by 5% during 2023 to 3.9 million, with sports revenue up 12% and gaming increasing by 17%.

Elsewhere, the group’s International arm, which comprises Sisal, PokerStars and Betfair International, saw FY2023 revenue increase 36% to £2.3bn.

Coupled with a 31% increase in AMPs to 4.1 million and a surge in sports revenue by 60%, Flutter said the International division’s gains were driven by “consolidate and invest” markets.

Finally, Australia recorded decreases on previous years as the long tail of the pandemic continues to bite.

Flutter said a 3% decrease in revenue to £1.2bn was a reflection of “guided racing trends in line with expectations”. AMPs Down Under remained flat with a 2% uptick to 1.1 million.

Peter Jackson, Flutter CEO, said: “In the US, FanDuel consolidated its sports leadership position during the peak quarter for sporting activity, while FanDuel Casino went from strength to strength.

“While sports results were very customer friendly, particularly on the NFL in November, the underlying momentum in the business remains very strong heading into 2024.

“Outside of the US, the quarter traded in line with expectations, with continued strong momentum in the UK&I supported by recent product enhancements and International growth driven by our ‘consolidate and invest’ markets,” he added.