Flutter cuts 2024 guidance stung by unfavourable NFL results.

Flutter Entertainment’s end-of-year trading has been offset by a period of “very unfavourable US sports results”, prompting management to revise its guidance for group and FanDuel segments.

This morning, the NYSE/LSE gambling group issued a brief notice stating that it had felt the impact of US customers cashing in NFL parlays during November and December.

As detailed: “The 2024/2025 NFL season to date has been the most customer-friendly since the launch of online sports betting, with the highest rate of favourites winning in nearly 20 years.”

On group accounts, NFL customer-friendly results have caused an adverse gross gaming revenue (GGR) impact on FanDuel of $438m. Flutter estimates a revenue reduction of approximately $390m and an Adjusted EBITDA reduction of approximately $260m for the period from 12 November to 31 December.

Flutter has revised its 2024 US revenue estimate to approximately $5.78bn, down $370m from its previous midpoint guidance. Additionally, for 2024, US Adjusted EBITDA is now expected to be around $505m, a reduction of $205m from earlier estimates.

Q4 results will carry a ‘revised expectation’ for sportsbook net revenue margins of 6.6%. The reduction reflects unfavourable sports results that impacted Flutter’s Q4 margin by 390 basis points (bps), compared to a negative Q4 2023 margin impact of 240bps from unfavourable results.

Period trading saw FanDuel implement a 4% year-over-year reduction in promotional spend as a mitigation measure against adverse sports outcomes. This reduction more than offset the previously communicated increased investment in new player acquisition volumes.

Q3 results had seen Flutter warn of unfavourable NFL results impacting FanDuel, which had recorded a positive EBITDA swing of $58m.

Leadership faced questions about the generosity and exposure of its US parlays entering the busiest period of NFL wagering, with CEO Peter Jackson defending FanDuel’s optimal pricing as a “material differential against competitors”.

Q4 US revenue is estimated at $1.59bn, with Adjusted EBITDA at $161m, reflecting adverse sports results impacts of $643m in GGR, $550m in revenue, and $360m in EBITDA.

Outside of the US, Flutter noted continued strong performance, with the UK and Ireland benefiting from favourable Premier League results. This helped offset some of the challenges faced in the US. As a result, 2024 revenue and Adjusted EBITDA for the Group Ex-US are expected to be 1% and 2% higher, respectively, than previous guidance.

Flutter will publish its full-year 2024 accounts on Tuesday, 4 March