Flutter Entertainment plc Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Strategic Positioning: Flutter's strategic positioning provided access to growth markets and a diversified portfolio of local hero brands leveraging the Flutter Edge. In 2024, Flutter strengthened its leadership in the U.S. and solidified number 1 positions globally in key markets like the U.K. and Italy.
• Product Innovations: In the U.S., product innovations included Same Game Parlay products, the Your Way product, and improved iGaming rewards. Internationally, UKI saw expanded Same Game Parlay offerings, Italy's Sisal benefited from PokerStars partnership, and India/Australia showed positive momentum.
• Market Expansion: Flutter launched FanDuel in new U.S. states (North Carolina, Vermont) and added MaxBet in international business. The group also expects to complete Snai and NSX acquisitions in 2025, enhancing scale and diversification.

Segment Performance

• U.S.: Revenue was 14% higher with adjusted EBITDA of $163 million. iGaming saw strong growth of 43%, while sportsbook revenue grew 8%. The impact of customer-friendly sports results cost approximately $550 million in revenue and $360 million of adjusted EBITDA in Q4.
• International: Revenue grew 14%, with adjusted EBITDA increasing 6%. Constant currency revenue growth in International was 23%, driven by a 22% increase from existing consolidated first markets and MaxBet contributing 8 percentage points. UKI had an excellent quarter with revenue growth of 20%, driven by strong sportsbook and iGaming performance.
• Other Regions: India had AMP growth of 72% on a year over 2-year basis. Australia had revenue 8% lower, but AMP growth was 7%.

Guidance

• U.S.: Expect existing state revenue midpoint $7.72 billion and adjusted EBITDA midpoint $1.4 billion in 2025, representing 33% revenue growth and 176% adjusted EBITDA growth. Normalizing 2024 sports results, U.S. net revenue would have been ~$6.3 billion. 2025 started well with underlying trends in line with expectations.
• Ex-U.S.: Revenue and adjusted EBITDA midpoints $8.25 billion and $1.85 billion, excluding M&A. Ex-U.S. adjusted EBITDA midpoint guidance split between $2.08 billion for new international segment and $230 million unallocated corporate overhead. Expect up to $1 billion share repurchase in 2025, alongside Snai and NSX acquisitions totaling ~$2.7 billion.

Risks

• Regulatory Changes: Volatility in U.S. and international regulatory environments, including monitoring of state gaming tax increases and sports prediction market regulations.
• Sports Results Impact: Customer-friendly sports results can negatively impact revenue and adjusted EBITDA, as seen in Q4 2024.
• Market Competition: Intense competition in new and existing markets, particularly in Brazil post-NSX acquisition, may affect growth and profitability.

Question and Answer

• Q: On U.S. guidance and new states, specifically timing of Missouri and Alberta launches and customer acquisition environment.

A: Rob discussed timing of Missouri launch in Q4 and Alberta pre-launch investment, while Peter and Rob commented on continued strong customer acquisition opportunities.

• Q: On prediction markets.

A: Peter discussed monitoring CFTC roundtable and potential opportunities, noting prediction markets are less rich than traditional sportsbook offerings.

• Q: On Italian lottery bid.

A: Peter and Rob talked about the opportunity to bid for the lotto, highlighting SuperEnalotto's success and potential of lotto product with 21 million weekly players.

• Q: On Your Way product rollout.

A: Peter discussed user experience and risk management aspects, noting strong customer engagement with the product even in early stages.

• Q: On handle growth.

A: Rob and Peter discussed handle trends, emphasizing focus on revenue and EBITDA rather than handle, and positive trends in 2025 starting well after lapping like-for-like periods