Flutter Entertainment Projects $17.08B in Revenue by 2025 with Snai Integration and US iGaming Expansion

Insights from the Earnings Call: Flutter Entertainment (FLUT) First Quarter 2025

Management View

• CEO Peter Jackson underscored notable expansion within U.S. activities, crediting a substantial 289% surge in net earnings along with a 20% boost in adjusted EBITDA compared to the previous year to both the amplified presence of their U.S. market and robust global spread. Highlighting these sectors' ability to withstand financial challenges, he also stressed how innovations like the “Your Way” price-setting tech will be pivotal for forthcoming development.

• Jackson noted robust performances in international markets, notably in Southeast Asia and India, where revenues grew by 3% YoY on a constant-currency basis. Additionally, he emphasized the successful acquisition of Snai in Italy, which bolstered Flutter’s presence in this market. Jackson further discussed the continuous integration process for transferring Sky Bet clients onto their internal platform.

• Chief Financial Officer Rob Coldrake highlighted an 8% rise in overall company earnings for the quarter, along with a 20% boost in adjusted EBITDA. Revenues within the U.S. saw an 18% jump, fueled by a 15% surge in Sportsbook operations and a significant 32% growth in iGaming activities, leading to $161 million in adjusted EBITDA—a figure over five times greater compared to the same period last year.

Outlook

• The management kept the forecast for the full year 2025 revenue steady at $17.08 billion, anticipating an adjusted EBITDA of around $3.18 billion. These figures indicate respective yearly increases of 22% and 35%. The projections incorporate impacts from both the Snai purchase (projected income of $850 million and an adjusted EBITDA of $190 million), as well as NSX (anticipated earnings of $220 million coupled with an anticipated negative EBITDA impact of $70 million).

• Flutter anticipates a 22.5% increase in U.S. state-level revenue for 2025, along with a rise of 5.4 percentage points in the adjusted EBITDA margin.

• The firm anticipates launching its sportsbook operations in Missouri by Q4 of 2025 and rolling out services in Alberta, Canada, at the beginning of 2026.

Financial Results

• The group’s revenue for the quarter saw an uptick of 8%, bolstered by robust performance in both U.S. and overseas markets. Year over year, net income skyrocketed by 289%, accompanied by a rise of 20% in adjusted EBITDA.

• In the United States, revenues climbed by 18%, with Sportsbook contributing a growth of 15% and iGaming surging by 32%. The adjusted EBITDA stood at $161 million, more than quintupling compared to the prior year.

• The international segment generated $2 billion in revenue and $518 million in adjusted EBITDA, showing a respective 3% and 2% rise when measured at constant currency rates. Notably, the SEA area experienced a 14% boost, primarily due to an uptick of 25% more active monthly participants.

Q&A

• Ed Young from Morgan Stanley inquired about recent trends in basketball-themed betting handles as well as the expansion of online gambling within the U.S. The CEO, Jackson, clarified that the decline in bets was specific to basketball; all other sports categories such as Major League Baseball were meeting their projected performance levels. According to him, robust growth in internet gaming can be credited to advancements in products, particularly interactive features like real-time jackpot bonuses and special content offerings.

• Jordan Bender from Citizens Bank asked about the incorporation of Snai and the competitive landscape regarding "Your Way" pricing. The CFO, Coldrake, outlined a synergistic strategy aimed at achieving savings of €70 million within three years, with 10% accomplished in the initial year and half of this target met by the second year, capitalizing on Flutter’s technological advancements and operational size.

• Bernie McTernan from Needham & Company expressed worries regarding promotion expenditures and an increase in handle volume. The management restated their commitment to a careful strategy, prioritizing steady income expansion rather than relying on inflated handles due to promotional activities.

Sentiment Analysis

• While analysts had minor worries about handling growth and increased promotional expenses in the U.S., they were somewhat reassured by the management's optimistic outlook on maintaining long-term profit margins and introducing new products.

• The management kept an optimistic tone, stressing their resilience during economic downturns and expressing faith in achieving their growth objectives. CEO Jackson stated, "Our belief in our long-term prospects remains unwavering."

• In comparison to the last quarter, the management's tone remained unchanged but placed greater importance on integrating newly acquired businesses and advancing their own patented technologies.

Quarter-over-Quarter Comparison

• The guidance for 2025 has stayed the same, but the updated forecasts now incorporate acquisitions along with adjustments made for the less favorable sporting outcomes experienced so far this year.

• The attention turned to merging the Snai and NSX acquisitions and utilizing Flutter’s exclusive technologies, rather than Q4's concentration on dominating the U.S. market and introducing new products.

• Experts kept their attention on the expansion of internet gambling in the U.S. and the exploration of new markets abroad, echoing worries from the last quarter yet showing growing curiosity about how acquired companies will be integrated.

Risks and Concerns

• The management recognized possible threats posed by financial pressures and fluctuations in athletic performance yet stressed the protective stance of their corporate strategy.

• Analysts raised concerns about promotional spending and competitive pressures in the U.S. market, though management emphasized disciplined investments and sustainable growth strategies.

• Ongoing regulatory developments, particularly in Brazil and Italy, were noted as areas requiring close monitoring.

Final Takeaway

The financial performance reported by Flutter Entertainment for the first quarter of 2025 highlights its robust standing both within the U.S. market and internationally. The substantial expansion in their iGaming sector, along with key purchases such as Snai, has bolstered their asset base. Company leaders remain optimistic about achieving their objectives set for 2025, thanks to careful spending strategies and cutting-edge advancements in service offerings. This approach equips them well to overcome potential hurdles posed by economic fluctuations and increased competition.

Review the complete earnings call transcript here.

Further information about Flutter Entertainment, Flutter Entertainment plc, and so forth.

• Flutter Entertainment plc (FLUT) First Quarter 2025 Earnings Call Transcript
• Flutter Entertainment: A Top Pick for Resilient Stocks Within Its Industry
• Flutter Entertainment: A Leading Force in Gaming Set for Expansion
• Flutter Entertainment reported a Non-GAAP earnings per share of $1.59, which fell short by $0.30, and revenues of $3.67 billion, missing expectations by $150 million.
• Flutter Entertainment First Quarter 2025 Financial Results Anticipation