Flutter Entertainment Updates Financial Projections After Sports Losses

Flutter Entertainment Adjusts Financial Expectations

Flutter Entertainment PLC (NYSE:FLUT; LSE:FLTR), a leader in online sports betting and iGaming, has recently updated its financial outlook for US operations. This adjustment comes in response to unexpected outcomes in sports betting, particularly affecting NFL Parlay and Same Game Parlay wagers. While the momentum among US players has been strong, it's important to note that the company faced considerable challenges in Q4 2024 due to the most favorable betting results for customers in nearly twenty years.

Impact on Gross Gaming Revenue

Due to these unfavorable sports results, Flutter estimates a considerable negative effect on gross gaming revenue (GGR) amounting to $438 million. Correspondingly, revenues and Adjusted EBITDA are expected to decrease by approximately $390 million and $260 million, respectively, for the timeframe from mid-November to the end of December 2024. Consequently, Flutter's expected US revenue for 2024 will be approximately $370 million less than the previous guidance midpoint, resulting in a projected total around $5.78 billion. Additionally, the adjusted US Adjusted EBITDA forecast now sits at approximately $505 million, a reduction of $205 million relative to earlier projections.

Revised Q4 Projections

The company's updated estimates for Q4 US revenue and Adjusted EBITDA are approximately $1.59 billion and $161 million, respectively. These adjustments are reflective of an anticipated total impact of $643 million in GGR, $550 million in revenue, and $360 million in Adjusted EBITDA for the quarter attributed to sports outcomes.

Positive Trends Outside the US

Despite the setbacks within the United States, Flutter has observed continuing positive trajectories in the UK and Irish markets. Specifically, the favorable sports outcomes in the English Premier League contributed to an estimated 1% increase in revenue and a 2% rise in Adjusted EBITDA for the Group EX-US, compared to the midpoint of their prior guidance.

Long-term Growth Assumptions

Flutter stressed that the short-term impacts of sports results should not overshadow the long-term growth path and underlying assumptions presented during their Investor Day. A comprehensive update will be shared with investors during the scheduled Q4 earnings release set for March 2025.

Preliminary Financial Expectations

It is crucial to acknowledge that these financial estimates are preliminary and may change based on the completion of Flutter's financial reporting processes. Additionally, the independent registered public accounting firm has not audited or reviewed these preliminary figures. Investors are advised to exercise caution and not rely solely on this preliminary information when considering their financial decisions.

Frequently Asked Questions

What caused Flutter Entertainment to revise its financial forecasts?

The financial forecasts were revised due to unexpected customer-friendly outcomes in sports betting, especially in NFL-related wagers.

How much is Flutter expecting to lose in gross gaming revenue?

Flutter estimates a negative impact on gross gaming revenue of $438 million due to the recent unfavorable sports results.

What are the new projections for Flutter's US revenue in 2024?

The projected US revenue for 2024 is approximately $5.78 billion, a decrease of about $370 million from previous estimates.

How is Flutter performing in markets outside of the US?

In the UK and Ireland, Flutter has experienced positive momentum, particularly due to favorable outcomes in the English Premier League.

When will Flutter provide a detailed financial update?

A detailed update is expected during the company's scheduled Q4 earnings release in March 2025.

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