Flutter Entertainment plc Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Themes: Confidence in business resilience to economic changes, sports results as transient factors, excitement about outcome-based pricing technology (Your Way), monitoring futures markets, and progress in Italy with Snai acquisition and buyback program.
• U.S. Performance: AMPs grew to over 4.3 million. Handle growth in line with expectations, with basketball handle softness offset by other sports. MLB trends encouraging. Focus on net revenue drivers beyond handle.
• International Performance: SEA had 14% growth driven by 25% AMP growth. UKI growth moderated to 2% with strong iGaming growth. APAC saw 45% iGaming growth in India. CEE grew 15%. Migration of Sky Bet customers on track, Flutter Edge investment up $6 million year-over-year.

Segment Performance

• U.S.: Revenue was 18% higher year-over-year. Sportsbook growth was 15% despite adverse March Madness outcomes, and iGaming grew 32%. Adjusted EBITDA was $161 million, more than 5 times higher than the prior year. Sales and marketing saw 750 basis points improved leverage.
• International: Revenue was $2 billion and adjusted EBITDA was $518 million for the quarter, reflecting constant currency growth of 3% in revenue and 2% in adjusted EBITDA. Strong performance in SEA and CEE regions, with iGaming growth in UKI and India. Sports results were marginally adverse year-over-year, with favorable results in SEA and UKI and unfavorable in APAC.

Guidance

• Existing full-year guidance unchanged, adjusted for M&A, FX, and adverse sports results. Acquisition of Snai (from May 1, 2025) expected to contribute $850M revenue and $190M adjusted EBITDA. NSX (from mid-May 2025) expected $220M revenue and $70M adjusted EBITDA loss. Foreign currency movements impact $360M revenue and $80M adjusted EBITDA. Transitory impact of unfavorable U.S. sports results $280M revenue and $180M adjusted EBITDA. Group revenue expected $17.08B, adjusted EBITDA $3.18B for 2025.

Risks

• Potential impact of economic outlook changes on the U.S. sector.
• Transient nature of sports results affecting quarterly performance.
• Regulatory developments and foreign currency movements impacting financials.

Question and Answer Q: Elaborate on basketball-related handle factors and Q2 handle outlook, and discuss iGaming product execution vs peers.

A: Peter Jackson noted basketball handle weakness was transient, MLB performance positive. iGaming has strong product execution with on-play jackpot capability resonating well.

Q: Discuss Snai integration and Your Way product rollout.

A: Rob Coldrake said Snai integration has synergy plan with base synergy of €70M over 3 years. Peter Jackson stated Your Way is part of long-term pricing capability rollout with more to come.

Q: Talk about handle vs promotion balance and iGaming long-term growth.

A: Rob Coldrake said disciplined promo approach, iGaming has long-term growth potential with improving products.

Q: On prediction markets and Brazil performance.

A: Peter Jackson said monitoring prediction markets, Brazil has seen ARPU uplifts despite regulatory challenges.

Q: On Italian lotto bid and FanDuel Picks.

A: Rob Coldrake discussed Italian lotto bid benefits, Peter Jackson mentioned FanDuel Picks launch with settled legal position.