Flutter Entertainment, a leading player in the online sports betting and iGaming sector, made significant downward adjustments to its full-year 2024 guidance on Tuesday. This revision comes in light of record-breaking, customer-friendly sports betting results in the United States, particularly notable within NFL Parlay and Same Game Parlay betting lines.
The company reported that "The 2024/2025 NFL season to date has been the most customer-friendly since the inception of online sports betting, boasting the highest winning rate for favorites seen in nearly two decades." As a consequence of these unfavorable results, Flutter anticipates a substantial adverse effect on its gross gaming revenue, estimating an impact of approximately $438 million occurring between November 12, 2024, and December 31, 2024. The disappointing sports outcomes are projected to detrimentally affect Flutter’s financial performance, with estimated losses amounting to $390 million in revenue and $260 million in adjusted EBITDA towards the tail end of 2024.
In light of this, the company now expects that its US revenue for the entire year may fall short by $370 million, lowering the previous midpoint guidance from $5.78 billion within a target range of $6.05 billion to $6.25 billion. In a similar vein, the firm has forecasted a decrease of $205 million in its US adjusted EBITDA guidance range, which previously stood at $670 million to $750 million for 2024, thereby modifying the midpoint target to $505 million.
These alterations reflect declines of 6% in US revenue and a staggering 29% in adjusted EBITDA guidance for the company, as analyzed by AlphaValue/Baader Europe. Across the broader group, this new guidance presents a 2% anticipated drop in revenue and a 7% reduction in EBITDA forecasts, indicating wider implications for Flutter's financial health. Despite the gloomy outlook in the US market, Flutter Entertainment experienced a silver lining – its performance in international markets has surpassed expectations.
Particularly in the UK and Ireland, where the English Premier League has driven increased engagement, the company's group revenue is expected to be 1% above the previously set midpoint guidance totaling between $8.1 billion and $8.3 billion, and adjusted EBITDA anticipated to be 2% higher than this midpoint. In the longer term, Flutter maintains a positive outlook, expressing confidence in the underlying growth drivers and future trajectory that were laid out during their investor day in September 2024, attributing the recent adverse quarterly results to their transient nature.
In reaction to the news, shares experienced a decline of 3% during morning trading, reflecting the market's response to the revised forecasts..