Flutter announced that its third-quarter year-over-year revenue increased 27% to $3.25 billion, prompting a record high in its stock price, coupled with its adjusted EBITDA rising 75% to $450 million.
Flutter Beats the Street
The news coming out of FanDuel’s parent company, Flutter Entertainment, was promising to say the least. Its $3.25 billion third-quarter revenues beat Wall Street projections by 7%, and its adjusted EBITDA of $450 million surpassed analysts’ forecasts by 25%. The promising news sent the stock soaring to a record-high $265.52 at the close of business on Wednesday.
“In the US, if it was not for the run of customer-friendly NFL sports results in Q4 to date, we would have been increasing our guidance for the year also,” CFO Rob Coldrake said on an earnings call to investors.
Sports Bettor’s Month
October proved to be a sports bettor’s month with holds, or win rates, plunging from September. Nevertheless, FanDuel weathered the storm and came out with positive long-term results.
“Our cost of sales for the third quarter of 58.9% as a percentage of revenue was ahead of our expectations, primarily driven by the impact of the positive sports results,” Coldrake said. “In sales and marketing, we delivered strong operating leverage and some phasing benefit into Q4, which drove the cost as a percentage of revenue down by 760 basis points year over year.”
During a recent Investor Day, Flutter raised its 2027 EBITDA guidance to more than $5 billion, a stunning 50% increase over previous guidance driven primarily by an increased estimate for the US market in which FanDuel operates.
NFL Betting Generates Cash Flow
The football season has generated a massive increase in sports betting, and those effects were felt in FanDuel’s bottom line. The handle increased 36% in the quarter, triggering a 62% rise in revenue and an increase of 1.3 percentage points in its hold or win rate to 8.2%.
“In the US, I’d actually call out our pricing accuracy as something that’s been incredibly important for us,” CEO Peter Jackson said. “We’ve got a very strong parlay mix, which ought to actually make positive results better and negative results potentially worse because a lot of parlays can drive more sort of volatility. (…) But our pricing accuracy is absolutely crucial. And I think that’s what’s really driving the material differential that you’re seeing with our business and others.”
FanDuel’s Playbook
Before the NFL season commenced, FanDuel introduced a sweeping array of new betting options associated with the league. Expanded player props on its betting menu, accompanied by others exclusively reserved for FanDuel’s agreement with the league, manifested in seven percentage points higher in parlay penetration than the previous year.
Flutter’s non-US brands also thrived, as evidenced by a 15% year-over-year Q3 revenue increase to $2 billion, due in large part to the company acquisitions of Brazil’s NSX and Italy’s Snai brands.
“Outside of the US, all divisions delivered a strong performance in the quarter as they leveraged the benefits of the Flutter Edge,” Jackson said.
Flutter has announced a $5 billion repurchase program of its stock on the New York Stock Exchange, with the first wave being $350 million in buybacks occurring between November 14th and March 31, 2025.
