Market Reaction: Flutter Entertainment Adjusts Financial Outlook

Flutter Entertainment Adjusts Guidance Amid Market Changes

Flutter Entertainment Plc (FLUT) is experiencing a downturn in its stock price during after-hours trading, triggered by the company's recent revision of near-term financial guidance. This adjustment is influenced significantly by what has been described as a period of "very unfavorable" sports results across its platforms.

Understanding the Market Impact

After the market closed, Flutter Entertainment, the parent company of FanDuel, revealed that while customer engagement in the U.S. has been robust, negative betting outcomes have adversely impacted overall financial performance.

Financial Implications

From mid-November through the end of December, the company projected that results favorable to customers led to an estimated detrimental impact on gross gaming revenue estimated at $438 million. This shift has also projected a revenue decrease of about $390 million. The adjusted EBITDA is projected to suffer a reduction of roughly $260 million as a direct consequence of these outcomes.

Revised Expectations for 2024

As a result of these recent developments, Flutter's revenue forecast for 2024 has been adjusted downwards to approximately $5.78 billion, revised from earlier estimates that ranged from $6.05 billion to $6.25 billion. The revenue forecast for the fourth quarter also reflects this change, now anticipated to be around $1.59 billion.

Long-term Growth Outlook

Moreover, full-year adjusted EBITDA is now anticipated to be about $505 million, lowered from prior guidance suggesting between $670 million and $750 million. For the fourth quarter, adjusted EBITDA is expected at around $161 million.

Customer Trends and Analysis

Despite the unfavorable betting outcomes, Flutter has stated that the current NFL season has been particularly favorable to customers, recording the highest winning rates for favorites in nearly two decades. Company officials emphasized that these transient results will not sway their longer-term growth strategies or assumptions that were initially outlined during their Investor Day in September.

International Performance

Outside of the United States, the company's outlook is projected to exceed previously set guidance midpoints, primarily driven by favorable results from the English Premier League. Flutter anticipates that its 2024 revenue could be 1% above previously communicated estimates and that adjusted EBITDA may increase by about 2% as well.

Upcoming Financial Report

Flutter is set to release its fourth-quarter earnings report on March 4, during which formal guidance for 2025 will also be provided. Investors are keenly anticipating this information to gauge the company's future directions and strategies moving forward.

Flutter Entertainment Stock Trends

As of the latest update, Flutter Entertainment shares witnessed a decline of 1.93%, trading at around $247. This moment of uncertainty in the stock price reflects broader concerns regarding the company's revenue forecasts in light of recent sports betting outcomes.

Frequently Asked Questions

Why did Flutter Entertainment cut its guidance?

Flutter Entertainment cut its guidance due to unfavorable sports results impacting revenue and adjusted EBITDA significantly.

What is the current stock price of Flutter Entertainment?

Flutter Entertainment shares are currently trading at approximately $247 after a 1.93% decline in after-hours trading.

When will Flutter Entertainment report its fourth-quarter earnings?

Flutter is scheduled to report its fourth-quarter earnings on March 4.

What is the impact of the NFL season on Flutter's performance?

Despite the challenges, the NFL season has been very favorable for customers, with high rates of favorites winning.

How does Flutter plan to achieve long-term growth?

Flutter continues to focus on its growth drivers and remains confident in its long-term growth trajectory outlined at the Investor Day.

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