Flutter Q4 US adjusted EBITDA faces $360m hit on NFL results
New York-listed operator points to huge favourite win rate as projected revenue and earnings for FanDuel hampered by “short-term” impact
Flutter Entertainment has said “very unfavourable US sports results” in November and December impacted GGR by approximately $438m and adjusted EBITDA by around $260m.
The operator also said that between November 12 and December 31 an estimated $390m dent was dealt to its revenue.
The impact comes from NFL betting, which Flutter has reported as the “most customer friendly since the launch of online sports betting.”
Flutter’s US shares closed 1.3% down last night, while this morning its London-listed shares have dipped 2.6%.
The Peter Jackson-led firm said parlay and same game parlay bets had taken a significant toll, with 184 winning favourites from the first 256 games of the 2024 season, or 72%.
In Q4 alone, 77% of favourites won while the points overs have hit in 53% of games up to the end of December; only three of the past 25 years have had a higher hit rate.
The single biggest loss for the brand came on December 30 as the Detroit Lions beat the San Francisco 49ers 40-34, costing Flutter $74m.
The game saw nine different touchdown scorers, with many of them popular with customers.
The blow has seen the New York-listed firm readjust its guidance for full-year 2024 performance, with US revenue expected to be around $370m lower than the previous guidance midpoint.
The prior revenue range ran from $6.05bn to $6.25bn, with the new expected midpoint for the year forecast at $5.78bn.
Flutter also noted that following an “incremental one-off cost mitigation,” US adjusted EBITDA will land around $205m lower than the previous guidance, coming in at $505m.
The prior US adjusted EBITDA guidance set by the FanDuel parent company had been $670m to $750m.
On a Q4 basis in the US, overall impact is expected to see GGR hit by $643m, revenue by $550m, and adjusted EBITDA by $360m.
Those impacts would bring quarterly US revenue to around $1.59bn and adjusted EBITDA to $161m.
Bosses also expect Q4 sportsbook net revenue margin to come to 6.6%, while structural revenue margin of 14.5% is “broadly in line with expectations” and represents a 100 basis point increase year on year (YoY).
Flutter said this was driven by “FanDuel’s strong parlay product offering combined with the seasonally higher-margin sports mix.”
Promotional spend has also reduced 20 basis points YoY to 4%, which management said was a “mitigation against adverse sports outcomes” that offset the increase in investment in new player acquisition volumes.
Flutter said: “The transitory nature of these results has no impact on the underlying assumptions and guidance expectations communicated at our Investor Day in September, and we remain confident in the growth drivers and long-term growth trajectory set out at the Investor Day.
“A more detailed update will be provided with our scheduled Q4 earnings on March 4 2025, alongside formal guidance for 2025.”
Outside of the US, Flutter said the business is maintaining “good momentum” in the UK and Ireland, with favourable results recorded in the English Premier League.
In turn, the operator said ex-US 2024 revenue and adjusted EBITDA will be around 1% and 2% higher than previous Q3 guidance midpoints, respectively.