FOR
IMMEDIATE RELEASE
Flutter announces update on
short-term US sports results impact
New York, January 7, 2025: Flutter Entertainment (NYSE:FLUT;
LSE:FLTR) ("Flutter"), the world's leading online sports betting
and iGaming operator today announces a brief update on the impact
of US sports results on Q4 2024 trading.
Following our Q3 earnings report on
November 12, continued strong US player momentum has been offset by
a period of very unfavorable US sports results across the remainder
of November and in December, primarily on NFL Parlay and Same Game
Parlay outcomes. The 2024/2025 NFL season to date has been the most
customer friendly since the launch of online sports betting with
the highest rate of favorites winning in nearly 20
years.
The transitory nature of these
results has no impact on the underlying assumptions and guidance
expectations communicated at our Investor Day in
September1, and we remain confident in the growth
drivers and long-term growth trajectory set out at the Investor
Day.
These customer friendly results
generated an estimated adverse gross gaming revenue (GGR) impact of
$438m, and estimated reductions in revenue of approximately
$390m2 and Adjusted EBITDA3 of approximately
$260m4, for the period November 12 to December
31.
US revenue for 2024 is therefore now
estimated to be c. $370m lower than our previous guidance midpoint
at approximately $5.78bn (previous guidance $6.05bn - $6.25bn).
After incremental one-off cost mitigation5, 2024 US
Adjusted EBITDA is estimated to be approximately $205m lower than
the previous guidance midpoint at approximately $505m (previous
guidance $670m - $750m).
Our revised expectations include Q4
sportsbook net revenue margin of 6.6% reflecting:
·
Structural revenue margin of 14.5%, broadly in
line with expectations and reflecting an increase of 100 basis
points year-over-year. This was driven by FanDuel's strong parlay
product offering combined with the seasonally higher-margin sports
mix
·
Unfavorable sports results of 390bps (Q4 2023:
240bps unfavorable)
·
Promotional spend of 4.0%, a reduction of 20 bps
year-over-year as mitigation against adverse sports outcomes more
than offset the previously communicated increased investment in new
player acquisition volumes
Q4 US revenue is therefore now
expected to be approximately $1.59bn and Q4 US Adjusted EBITDA is
estimated to be approximately $161m, reflecting an overall
estimated adverse Q4 sports results impact totaling $643m in GGR,
$550m in revenue and $360m in Adjusted EBITDA.
In the Group Ex-US, continued good
momentum in UKI in particular with favorable sports results in the
English Premier League, means we now estimate 2024 revenue and
Adjusted EBITDA will be approximately 1% and 2% higher than the
mid-points of our previous guidance provided at Q3.
A more detailed update will be
provided with our scheduled Q4 earnings on March 4, 2025, alongside
formal guidance for 2025.
This announcement contains inside
information as defined under assimilated Regulation (EU) No.
596/2014, which is part of the laws of the United Kingdom by virtue
of the European Unition (Withdrawal) Act 2018 (as amended).
The person responsible for arranging release of
this information on behalf of Flutter is Edward Traynor, Company
Secretary of Flutter.
Notes
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1.
2027 Revenue and Adjusted EBITDA guidance was
provided at our Investor Day on September 25 for Flutter Group,
along with forward-looking commentary on potential US 2025 revenue
and Adjusted EBITDA margin accretion. Our 2025 comments, to which
there are no changes, are based on our 2024 revenue and Adjusted
EBITDA guidance per our Q2 earnings on August 13, 2024 (midpoints
of $6.2bn and $740m respectively).
2.
The lower-than-normal level of customer generosity
mitigation (where customer generosity reflects variable promotional
spend accounted for as a deduction from gross gaming revenue)
reflects both the distribution of winnings to a narrow range of
customers, and the timing of adverse sports results within the
quarter, with significant adverse results occurring on December
30.
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3.
Beginning January 1, 2024, the Group revised its
definition of Adjusted EBITDA, which is the segment measure used to
evaluate performance and allocate resources. The definition of
Adjusted EBITDA now excludes share-based compensation as management
believes inclusion of share-based compensation can obscure
underlying business trends as share-based compensation could vary
widely among companies due to different plans in place resulting in
companies using share-based compensation awards differently, both
in type and quantity of awards granted.
4.
The estimated adverse Adjusted EBITDA impact
reflects the estimated gross profit impact and is before any sales
and marketing, or operating cost mitigation
5.
Primarily reflecting estimated sales and marketing
cost reduction and phasing benefits, and an estimated reduction in
variable employee salary accruals.
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Clarification on basis of preliminary financial
information
As at the date of this release we
have not completed our financial closing procedures for the period
ended December 31, 2024. The preliminary financial information
included in this release may therefore be subject to change as we
complete our financial reporting processes and controls.
Additionally, our independent
registered public accounting firm has not audited, reviewed,
compiled or performed any procedures with respect to
the preliminary financial information and does not
express an opinion or provide any other form of assurance with
respect to this preliminary financial information. During the
course of the preparation of our consolidated financial statements
and related notes as of and for the period ended December 31, 2024,
we may identify items that would require us to make adjustments to
the preliminary financial information presented above. As
a result, investors should exercise caution in relying on this
information. The preliminary financial information should
not be viewed as a substitute for full financial statements
prepared in accordance with U.S. GAAP.
Forward-Looking Statements
The preliminary financial
information included in this press release is preliminary,
unaudited and subject to completion and may change as we complete
the operating of our financial reporting processes and controls.
See "Clarification on basis of preliminary financial information"
above. This press release contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements reflect
our current expectations as to future events based on certain
assumptions and include any statement that does not directly relate
to any historical or current fact. These statements include, but
are not limited, to statements related to our expectations
regarding the performance of our business, our financial results,
our operations, our liquidity and capital resources, the conditions
in our industry and our growth strategy. In some cases, you can
identify these forward-looking statements by the use of words such
as "outlook", "believe(s)", "expect(s)", "potential",
"continue(s)", "may", "will", "should", "could", "would",
"seek(s)", "predict(s)", "intend(s)", "trends", "plan(s)",
"estimate(s)", "anticipates", "projection", "goal", "target",
"aspire", "will likely result", and or the negative version of
these words or other comparable words of a future or
forward-looking nature. Such forward-looking statements are subject
to various risks and uncertainties. Accordingly, there are or will
be important factors that could cause actual outcomes or results to
differ materially from those indicated in these statements. Such
factors include, among others: the preliminary nature of the
financial information include in this press release as discussed in
"Clarification on basis of preliminary financial information"
above, Flutter's ability to effectively compete in the global
entertainment and gaming industries; Flutter's ability to retain
existing customers and to successfully acquire new customers;
Flutter's ability to develop new product offerings; Flutter's
ability to successfully acquire and integrate new businesses;
Flutter's ability to maintain relationships with third-parties;
Flutter's ability to maintain its reputation; public sentiment
towards online betting and iGaming generally; the potential impact
of general economic conditions, including inflation, fluctuating
interest rates and instability in the banking system, on Flutter's
liquidity, operations and personnel; Flutter's ability to obtain
and maintain licenses with gaming authorities, adverse changes to
the regulation (including taxation) of online betting and iGaming;
the failure of additional jurisdictions to legalize and regulate
online betting and iGaming; Flutter's ability to comply with
complex, varied and evolving U.S. and international laws and
regulations relating to its business; Flutter's ability to raise
financing in the future; Flutter's success in retaining or
recruiting officers, key employees or directors; litigation and the
ability to adequately protect Flutter's intellectual property
rights; the impact of data security breaches or cyber-attacks on
Flutter's systems; and Flutter's ability to remediate material
weaknesses in its internal control over financial
reporting.
Additional factors that could cause
the Company's results to differ materially from those described in
the forward-looking statements can be found in Part I, "Item 1A.
Risk Factors" of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2023 as filed with the SEC on March
26, 2024 and other periodic filings with the SEC, which are
accessible on the SEC's website at www.sec.gov. Accordingly, there
are or will be important factors that could cause actual outcomes
or results to differ materially from those indicated in these
statements. These factors should not be construed as exhaustive and
should be read in conjunction with the other cautionary statements
that are included in the Company's filings with the SEC. The
Company undertakes no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as required by
law.
About Flutter Entertainment plc
Flutter is the world's leading
online sports betting and iGaming operator, with a market leading
position in the US and across the world. Our ambition is to
leverage our significant scale and our challenger mindset to change
our industry for the better. By Changing the Game, we believe we
can deliver long-term growth while promoting a positive,
sustainable future for all our stakeholders. We are well-placed to
do so through the distinctive, global competitive advantages of the
Flutter Edge, which gives our brands access to group-wide benefits
to stay ahead of the competition, as well as our clear vision for
sustainability through our Positive Impact Plan.
Flutter operates a diverse portfolio
of leading online sports betting and iGaming brands including
FanDuel, Sky Betting & Gaming, Sportsbet, PokerStars, Paddy
Power, Sisal, tombola, Betfair, MaxBet, Junglee Games and
Adjarabet.
Contacts:
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Investor Relations:
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Media Relations:
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Email:
investor.relations@flutter.com
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Email: corporatecomms@flutter.com
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