The earnings call: Flutter lauds “tremendous” FanDuel performance
Flutter Entertainment chief executive Peter Jackson has hailed FanDuel’s 2023 performance after its US brand reported a full year of positive annual adjusted EBITDA in the country for the first time.
Flutter announced its 2023 earnings on Tuesday (26 March), with group revenue jumping by 24.7% to $11.79bn (£9.32bn/€10.87bn) compared to 2023.
Flutter’s US operations were the main driver in its 2023 success. Jackson states that, through FanDuel, Flutter is now in a market-leading position in the US.
Looking at US operations as a whole, net gaming revenue market share stood at 53.4%, up from 43.2% in 2022. FanDuel also acquired over 3.7 million new betting and igaming players in 2023, up 19.0% from the previous year.
Further adjusted EBITDA in the country was also $167m for 2023, a significant rise from the loss of $263m recorded in Flutter’s 2022 financial year.
It was also the first time the company has recorded a positive further adjusted EBITDA over a full year. Further adjust..
Flutter Entertainment chief executive Peter Jackson has hailed FanDuel’s 2023 performance after its US brand reported a full year of positive annual adjusted EBITDA in the country for the first time.
Flutter announced its 2023 earnings on Tuesday (26 March), with group revenue jumping by 24.7% to $11.79bn (£9.32bn/€10.87bn) compared to 2023.
Flutter’s US operations were the main driver in its 2023 success. Jackson states that, through FanDuel, Flutter is now in a market-leading position in the US.
Looking at US operations as a whole, net gaming revenue market share stood at 53.4%, up from 43.2% in 2022. FanDuel also acquired over 3.7 million new betting and igaming players in 2023, up 19.0% from the previous year.
Further adjusted EBITDA in the country was also $167m for 2023, a significant rise from the loss of $263m recorded in Flutter’s 2022 financial year.
It was also the first time the company has recorded a positive further adjusted EBITDA over a full year. Further adjusted EBITDA margin is also now in positive territory, up from -8.2% in 2022 to 3.7% in 2023.
On Flutter’s earnings call today (26 March), Jackson heaped praise on the company’s performance in the US, particularly in regards to igaming.
Chief financial officer Paul Edgecliffe-Johnson asserted that Flutter and FanDuel had been the number one online casino operator in the US market since January 2024.
“There is tremendous momentum in the business,” Jackson said. “I am delighted with what the team are doing.
“Some of the innovations have only just been deployed and we are excited to see where we can take the company to.”
FanDuel strength of product driving US success
Jackson believes it’s FanDuel’s offering that is attracting US customers to choose its services, as opposed to competitors such as DraftKings and BetMGM.
Jackson highlighted FanDuel’s products, such as its parlay offering, as a key driver of Flutter’s US success and something that allows it to capitalise on its strongest US periods of the year.
“Q4 and Q1 are real heartlands for us with the NFL and NBA coming to the fore,” Jackson added. “The quality of our parlay products helps us to stand out. We’re very pleased with our NGR (net gaming revenue) share.
“We actually offer the best prices to customers in the market and yet we end up with bigger margin because of pricing accuracy and parlay penetration. We are very pleased with the quality of our product.”
In September 2023, Flutter acquired an initial 51% stake of Serbian omnichannel sports betting and gaming operator for €141.0m. The agreement also states that Flutter has the opportunity to acquire the remaining 49% in MaxBet in 2029.
The move provided the company with access to the regulated Serbian market and supported its wider expansion plans.
When quizzed on Flutter’s future M&A strategy, both Jackson and Edgecliffe-Johnson were keen to emphasise that the company would only acquire businesses it felt were market leaders. Only then will Flutter deviate from its medium-term leverage target of 2.0x-2.5x net debt to further adjusted EBITDA, which it upgraded from its prior objective of 1.0x-2.0x.
Edgecliffe-Johnson declared: “If we see attractive acquisitions, we are happy to be flexible. We are trying to create as big a business as possible and that continues to be the case.
“The number one priority for capital in business is to acquire new customers. Capital that is genuinely surplus will be returned to shareholders.”
One of Flutter’s acquisitions that paid real dividends in 2023 was its 2022 purchase of Sisal, a leading online gaming and lottery operator in Italy.
Sisal accumulated revenue of $1.22bn in 2023, 43.4% of Flutter’s International sector, which is all other markets excluding the US, UK, Ireland and Australia.
“Sisal performed very well at converting land-based players to online,” Jackson outlined. “It was able to do that because of fantastic products and natural cross-sell journeys.
“There’s also a fantastic funnel of lottery players, a very attractive pathway, especially in a market with restricted advertising. It’s a great opportunity to cross sell.”
“Mixed bag” for rest of international
Despite success in Italy, as well as a 13.7% rise in UK and Ireland revenue to $3.05bn, Flutter’s Australia performance somewhat hampered its 2023 earnings, with Jackson conceding it had been a “mixed bag” for the International sector.
Australia was the only segment to report a decline in 2023. Revenue fell by 7.1% to $1.45bn, with Flutter noting headwinds to its Sportsbet operator despite stating it had 45% market share in Australia.
Jackson cited increases in regulatory restrictions and taxes, as well as the reduction of player spend in Australia dropping to pre-Covid levels.
It’s not all bad news for Flutter’s Australia exploits in Jackson’s view, however. He explained: “Clearly the business has come down significantly.
“We have a fantastic team in Australia who are developing great ideas we can use for the rest of the world. Parlays have developed off the back of what some of Australian team are doing, so they are helping globally.”
