- US business is booming
- Full year guidance raised
- FanDuel winning market share
Shares in Flutter Entertainment (FLTR) flew 10.5% higher to £161.90 in London on Wednesday as UK investors got their first chance to react to the online sports betting giant’s better-than-expected second-quarter results and raised full-year guidance, which sent the stock up 8% after-hours in the US yesterday.
The gaming operator, which switched its primary listing from London to New York in May to reflect the increasing importance of the booming US market, delivered a 17% surge in adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) to $738 million for the second quarter to 30 June.
This strong performance was driven by continued momentum in the US, where earnings flew 51% higher to $260 million and Flutter’s fantasy sports betting brand FanDuel captured a 38% total online gross gaming revenue market share.
Flutter also said it would not hit customers with a surcharge in high-tax US states, shortly after which rival player DraftKings (DKNG:NASDAQ) shelved plans to do so.
ALL TO PLAY FOR ACROSS THE POND
Consistent with the stronger than anticipated showing from rival Entain (ENT), Paddy Power-to-Betfair brand-owner Flutter materially outperformed expectations in the second quarter to 30 June.
Group revenue grew 20% to $3.61 billion, breezing past the $3.34 billion consensus estimate thanks to standout 39% growth in the US.
Flutter churned out 10% growth across the rest of the group, with strong performances delivered in Italy and the UK, boosted by a positive European Football Championship as well as favorable sports results, although Australia continued to suffer from difficult market conditions.
CONFIDENT OUTLOOK
Following the consensus-beating performance, Flutter upped its full year group ex-US revenue and adjusted EBITDA guidance by 2% to $8 billion and $1.77 billion respectively.
For the all-important US, revenue and adjusted EBITDA guidance was raised to between $6.05 billion and $6.35 billion and $680 million to $800 million, up from previous ranges of $5.8 billion to $6.2 billion and $635 million to $785 million respectively.
‘The returns we are seeing give us the confidence to continue driving customer acquisition in the second half, building a bigger business, which bodes well for 2025 and beyond,’ enthused chief executive Peter Jackson.
‘We achieved important milestones during Q2, as the NYSE became our primary listing and we moved our operational headquarters to New York. This reflects the importance of the US market to Flutter and our view that the US is the natural home for our business.’
TAKING A PUNT ON ITALY
It also emerged this morning Flutter is in talks with UK gambling software group Playtech (PTEC) to buy the firm's Italian subsidiary Snaitech.
In response to media speculation, Playtech revealed was in discussions regarding the potential sale of Snaitech for a value ‘that could be about £2 billion’.
Playtech shares jumped as much as 117p or 22% to 655p on the news, given its market cap before today's news was less than the value being put on Snaitech alone.
