Flutter beat Wall Street expectations in the first quarter, but a FanDuel leadership shakeup and sportsbook “improvement plan” did little to calm investors as the ground shifts beneath the industry’s dominant operators.
The FanDuel parent reported $631 million in adjusted EBITDA during the quarter, slightly ahead of analyst expectations, while revenue rose 17% year-over-year to $4.3 billion. But the company also lowered full-year EBITDA guidance, replaced FanDuel CEO Amy Howe and outlined an increasingly aggressive strategy around prediction markets, loyalty programs and product changes ahead of football season.
Analysts broadly framed the quarter as evidence that FanDuel remains the market leader, but no longer operates from the same position of unquestioned growth dominance it once did.
“The business is showing signs of cracks, which we believe are not necessarily structural,” Citizens analyst Jordan Bender wrote in a note following the report. “But with EBITDA guidance declining 4% for 2026 at the midpoint, on the back of deep investment spend across new state launches, the prediction market, and the World Cup now present an uphill battle for the U.S. business.”
Flutter share fall on leadership change
Flutter shares fell more than 4% Wednesday to a new 52-week low after CNBC reported Howe’s departure hours before earnings were released.
The stock rebounded slightly in after-hours trading on the earnings news and closed Thursday at $101.20, up 2.1% from Wednesday’s close.
The stock is down roughly 58% over the past year as uncertainty around prediction markets and slowing sportsbook growth continues weighing on the sector, with Flutter hit harder than many of its peers.
FanDuel sports betting slowdown
FanDuel’s sportsbook business again showed signs of slowing despite more favorable sports outcomes, reinforcing concerns about the next phase of online betting growth.
U.S. sports betting revenue rose just 1% year-over-year during the quarter while handle declined 9% and sportsbook monthly active players fell 6%. Flutter executives noted trends improved throughout the quarter, with handle declines narrowing from 10% in January to 4% in March, though it still marked the company’s first ever quarter of year-over-year handle decline.
Structural sportsbook revenue margin fell 0.4 percentage points year-over-year to 13.7%, which executives attributed partly to lower NFL and NBA betting volume. Still, the company reiterated confidence it can eventually reach a 15% structural revenue margin in 2027 and 16% longer term.
FanDuel’s U.S online casino business offset some of the softer sportsbook numbers with online casino revenue rising 19% year-over-year.
FanDuel enters ‘improvement’ phase
Flutter CEO Peter Jackson acknowledged the company exited 2025 with a smaller sportsbook customer base than expected and needs to improve its sportsbook product ahead of football season. He framed the sportsbook “improvement plan” as an effort to improve competitiveness after slow responses to changing customer behavior and promotional dynamics.
He highlighted loyalty expansion, revised generosity mechanics, pricing improvements and a faster rollout of new sportsbook features, saying that early adoption rates were “doubling our expectations and continuing to grow.” Jackson also pointed to improvements to same-game parlay functionality, streaming integration, cash-out features and its “Bet Protect” program as part of a broader push to increase engagement and retention among customers.
But many of those initiatives are unlikely to materially impact results until later in the year, with much of the company’s expected US profitability now weighted toward football season and the fourth quarter.
Prediction markets as integrated strategy
Jackson described an increasingly aggressive push around prediction markets, which FanDuel launched in December 2025.
That includes expansion of its “One App” strategy, designed to give customers in legal and non-legal sports betting states a nearly identical user experience. DraftKings launched a similar approach earlier this year.
But unlike most traditional sportsbooks now competing with prediction markets, Jackson also revealed Flutter has entered the “initial phase” of using its sportsbook trading infrastructure to make markets on third-party prediction platforms.
“We’re going to live with this uncertainty,” Jackson said. “I think in the meantime, we’re going to continue to invest in the market-making. We’re really pleased with the early indications that we’re seeing from that, and it’s a good opportunity for us to monetize this business. And then from the core predict product, look, ultimately, we will acquire as many sports customers we can ultimately onto our regulated OSB products. And that’s what our real focus is.”
The company now expects prediction market investment losses to land near the high end of its previously disclosed $250 million to $300 million range this year, with executives noting only roughly $40 million of that spend occurred during the first quarter.
The expansion comes as investors grow increasingly concerned about platforms like Kalshi and Polymarket and ongoing legal battles over whether sports event contracts fall under federal commodities law or state sports betting regulations.
Jackson said prediction markets currently represent only a “low single-digit percentage” drag on sportsbook handle growth, though he acknowledged the products are beginning to influence parts of the broader sports betting landscape.
Flutter bets heavy on H2
Flutter made clear much of its recovery plan hinges on the second half of the year, particularly football season and the World Cup.
The company lowered full-year adjusted EBITDA guidance to roughly $2.9 billion. It also warned profitability would be pressured near-term by heavier spending across prediction markets, new state launches like Arkansas, and sportsbook product investments.
Bender estimated roughly 72% of Flutter’s full-year U.S. EBITDA is now expected to come during the fourth quarter alone. He added that Flutter’s long-term financial targets remain achievable “if execution is flawless.”
Chad Beynon of Macquarie said Flutter continues “managing through ongoing challenges,” while Barry Jonas of Truist described the company’s outlook as setting up a “showdown in 4Q.”
All three analysts lowered their price targets following earnings while maintaining bullish ratings on the stock. Macquarie lowered its target to $190 from $200, Citizens cut its target to $165 from $188 and Truist lowered its target to $130 from $140.
