Flutter Entertainment has reported a significant reduction in its third-quarter loss, while seeing a marked increase in its customer base. Despite a challenging quarter for sports outcomes, the company remains bullish on its future prospects.
Flutter Entertainment, the parent company of FanDuel, posted a loss of $114 million for the third quarter of 2024. This represents a notable improvement from the $262 million loss the company experienced during the same period last year. While the loss is still concerning, the company has made strong strides in other key financial areas, signaling promising growth potential.
Revenue Gains and Improved Cash Flow
The company’s revenue surged by 27% compared to last year, boosted by a combination of new products, favorable sporting outcomes, and the start of the NFL season. As a result, Flutter’s cash flow hit $450 million for the quarter, a jump from $258 million in Q3 2023. This improvement reflects a more efficient operation and a better-than-expected recovery in key markets.
Flutter’s per-share loss was reduced to $0.58, a dramatic improvement from the $1.55 loss in the same quarter last year. This reduction in losses underscores the company’s efforts to streamline its operations and improve profitability, despite ongoing challenges in the highly competitive online gaming and sports betting industry.
In terms of debt, Flutter has successfully lowered its leverage ratio, reducing it from 3.1 times cash flow to 2.4 times, indicating a stronger balance sheet and improved financial health.
46% Growth in Customers
One of the most promising developments from Flutter’s Q3 report was the 46% growth in its customer base. This increase, driven by both the expansion of existing markets and the launch of new products, has bolstered Flutter’s position as a major player in the online gaming space.
Despite the strong growth in customers, Flutter acknowledged that its performance in the latter part of the year has been impacted by less favorable sports results. This cautionary note suggests that, while the third quarter was strong, the company faces volatility in the short term, particularly in sports betting.
Strong Performance in Key Markets
Flutter’s performance in various international markets showed positive momentum. In Ireland and the United Kingdom, the company benefited from the Euro Cup soccer tournament in July, which helped drive a 15% increase in its non-U.S. business. The company also saw increased market share in Italy through its subsidiary Sisal, further bolstering its European footprint.
In Australia, positive sports results fueled a 12% revenue increase, marking another solid market for Flutter. The company continues to expand its presence in both mature and emerging markets, positioning itself for sustained growth in the coming years.
NFL’s Impact and Future Outlook
CEO Peter Jackson highlighted the impact of NFL games on Flutter’s performance, noting that peak wagers per minute were already higher than those seen during Super Bowl LVII. This is a significant achievement for the company, as it shows the growing popularity of its sports betting products, especially during high-profile events like the NFL season.
Furthermore, Flutter’s proprietary products have contributed to higher parlay penetration, which, in turn, has led to increased live betting handle. These developments reflect the company’s strategic focus on enhancing its product offerings, which has been well-received by its customer base.
Despite some setbacks in Q4, Flutter remains optimistic about its long-term prospects. The company’s ability to increase its customer base, improve cash flow, and grow its market share in key regions suggests that it is on the right track. The ongoing momentum from sports betting, coupled with the strong growth in customer numbers, puts Flutter in a strong position for continued expansion in 2025 and beyond.
