Shares of Flutter Entertainment climbed 12% Thursday following the release of its Q4 earnings report, showcasing significant market share gains and robust performance in the fast-growing US market ahead of its FanDuel stock listing.
Flutter, the world’s largest online betting company and home to brands including Paddy Power, Betfair, and Sportsbet, reported a strong 25% growth in global revenue, reaching £9.51 billion.
The standout driver behind Flutter’s stock surge is the success of its flagship brand, FanDuel, in the intensely competitive US sports betting landscape. The company reported 15% revenue growth in the US, still holding the No. 1 position in online sports betting.
Solidifying position in competitive quarter
FanDuel Sportsbook commands a 43% gross revenue market share across all US jurisdictions, propelling Flutter’s total revenue to £3.06 billion, a 38% increase year-over-year. Flutter’s US revenues in Q4 came in at £1.14bn, about 13% less than previous guidance, which Flutter CEO Peter Jackson attributed to unfavorable NFL betting results in November.
Revenue, however, still grew 19%, as parlays improved FanDuel’s overall margins. Despite an intensely competitive environment, the company’s sportsbook demonstrated a strong push in Q4, backed by a 33% increase in average monthly players and a 53% surge in legal sports betting stakes.
“From a competitive intensity perspective, every year is competitive,” Jackson said. “The launch of the football season, new competitors out there – there’s Fanatics, ESPN, we’ve had Caesars, BetMGM – over the years we’ve had a lot of competitors. I think this year was very intense.
“But I think the quality of our products stands us in very good stead. When I look at the returns we’re seeing in Q4 from the customer acquisitions, we’re very pleased.”
Flutter beats revenue expectations
Flutter’s Q4 revenue growth of 15% to £2.67 billion, combined with a full-year revenue increase of 24% to £9.51 billion, exceeded market expectations.
CFO Paul Edgecliffe-Johnson highlighted that the lower-than-expected revenue would have an approximate 35% flow-through to adjusted US earnings, providing reassurance on the company’s 2024 outlook.
iGaming offsets sports declines
FanDuel held a 26% market share of US iGaming in Q4, up five percentage points year-over-year and good for second-best among operators, the company said. The growth helped offset sportsbook net margin declines driven by:
- $343 million of customer-friendly sports results in Q4
- 4.2% increase in promotional spending year-over-year
“We’ve been taking share from the pure-play casino players. Taking significant market share is going to be very valuable for us,” Edgecliffe-Johnson said.
What’s shaking ahead of FanDuel stock listing?
The upcoming Super Bowl and the launch of online sports betting in North Carolina make Q1 a particularly important quarter as FanDuel looks to build on its momentum.
North Carolina will launch online sports betting March 11. It will be the ninth-largest state with online sports betting when it does.
“The Group traded well in Q4 underpinned by our leading local brands supported by global Flutter Edge
advantages. In the US, FanDuel consolidated its sports leadership position during the peak quarter for sporting activity, while FanDuel Casino went from strength to strength. While sports results were very customer friendly, particularly on the NFL in November, the underlying momentum in the business remains very strong heading into 2024.”
FanDuel stock comes to NYSE
Flutter Entertainment is set to debut on the New York Stock Exchange as FLUT on Jan. 29, a move the company has eyed for years. That move is expected to help Flutter better compete with chief rival DraftKings, which trades at more than 60 times the volume and has been a darling stock for sports betting investors over the past 12 months.
Flutter will continue to be traded on the London Stock Exchange, while its listing on the Irish exchange, Euronext Dublin, will be removed.
Full-year reporting for 2023 will be released on March 26.