Release Date: March 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Flutter Entertainment PLC (FLUT, Financial) reported a strong financial performance with a 19% revenue growth and a 26% increase in adjusted EBITDA for 2024.
- The company solidified its leadership position in the US market, achieving a 43% market share in sports betting and 26% in iGaming.
- Successful expansion into new markets, including North Carolina and Vermont, and the addition of Maxbet in the international business.
- The introduction of innovative products like the 'Your Way' customizable betting option and the FanDuel Casino Rewards Club has driven customer engagement.
- Flutter Entertainment PLC (FLUT) is on track to achieve its 2027 goals, with a focus on strategic growth and cost efficiency programs expected to deliver over $300 million in annualized cost savings by 2027.
Negative Points
- The company faced adverse sports results in the US, particularly in the NFL, which impacted revenue and adjusted EBITDA by approximately $550 million and $360 million, respectively, in Q4 2024.
- There is a potential risk of increased state gaming taxes in the US, which could impact profitability.
- The racing market in Australia showed softness, leading to an 8% decline in revenue, despite positive player-driven momentum in sports.
- The Italian market saw some share loss in the second half of 2024, which the company aims to address post-acquisition of Sny.
- The competitive environment in Brazil is challenging, with up to 200 companies applying for licenses, which could impact Flutter Entertainment PLC (FLUT)'s market entry strategy.
Q & A Highlights
Q: Can you elaborate on the $90 million investment losses in new states like Missouri and Alberta, and discuss the customer acquisition environment?
A: (CFO Rob Coldrake) We expect to launch in Missouri in Q4 and Alberta in Q1 2026. Missouri's launch will incur around $80 million in costs, with Alberta adding $10 million for pre-launch investments. (CEO Peter Jackson) We're pleased with our customer acquisition strategy, exiting 2024 with a larger business than anticipated, and we see continued opportunities for growth.
Q: Could you provide insights on the customer acquisition trends between iGaming and core sportsbook, and the expected benefits of new product integrations?
A: (CEO Peter Jackson) We're seeing strong growth in iGaming, driven by product innovations like the reward machine jackpots and the Fanjo Casino Rewards Club. These initiatives are enhancing customer acquisition and cross-selling into the sportsbook.
Q: What are the early learnings from the "Your Way" product rollout, and how are you managing the structural hold rate?
A: (CEO Peter Jackson) The "Your Way" product saw good engagement during the Super Bowl, with 1 in 20 customers using it. We're focusing on simplifying the user experience and managing associated risks. (CFO Rob Coldrake) We're not guiding specifically on hold for 2025, but we're making progress towards our long-term targets.
Q: How are you addressing the impact of higher tax rates in Illinois, and what is your outlook on potential iGaming legalization?
A: (CFO Rob Coldrake) The impact in Illinois was in line with expectations, and we aim to mitigate 50% of the growth factor in 2025. (CEO Peter Jackson) We're optimistic about launching in new states and expect continued momentum in iGaming legalization.
Q: Can you discuss your strategy for expanding in South and Latin America, particularly in Brazil?
A: (CEO Peter Jackson) We're excited about working with NSX and plan to leverage our products and technology in Latin America. The Brazilian market is competitive, but we are confident in our ability to succeed given our track record and capabilities.
Q: How do you view media rights partnerships in the US, especially with changes in broadcast deals?
A: (CEO Peter Jackson) We've been disciplined in negotiating contracts and are adapting to changes in media rights and streaming. Our scale helps us invest in acquiring the right types of rights to ensure customer access to sports content.
Q: What is your investment strategy in Brazil following the regulated market launch?
A: (CFO Rob Coldrake) Brazil's market was already functioning before regulation, so it's different from a US state launch. We're working towards $100 million in losses for this year, with competition for media assets expected to shake out quickly.
Q: What are the key drivers behind the US revenue growth exceeding original guidance, and where do you see potential upside in 2025?
A: (CEO Peter Jackson) We ended 2024 with a larger business than anticipated, particularly in iGaming. Progress in parlay offerings and structural hold improvements contributed to exceeding guidance. We remain on track for our long-term targets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
