Flutter Entertainment Shares Decline as Negative Sports Results Impact Earnings
Investing.com -- Flutter Entertainment's (NYSE: FLUT) shares fell by 4.7%, while DraftKings Inc. (NASDAQ: DKNG) stocks also declined by 1.5%. This drop followed an update from Flutter Entertainment regarding the impact of U.S. sports results on its trading for the fourth quarter of 2024. The company, a global leader in online sports betting and iGaming, has experienced a notably adverse period in U.S. sports results, particularly due to NFL Parlay and Same Game Parlay outcomes, which have delivered the most customer-unfriendly results in the last 20 years.
Flutter's update revealed that these results are expected to create an estimated $438 million impact on gross gaming revenue (GGR) during the period from November 12 to December 31, 2024, leading to approximately a $390 million decrease in revenue and about a $260 million drop in adjusted EBITDA. Consequently, U.S. revenue for 2024 is projected to be around $5.78 billion, approximately $370 million lower than the previous midpoint of guidance. U.S. adjusted EBITDA is also expected to be around $505 million, which is approximately $205 million less than the prior guidance midpoint.
Despite these setbacks, the company stated that the temporary nature of these results did not affect the fundamental assumptions and guidance expectations communicated during the Investor Day in September. Flutter maintains confidence in its long-term growth trajectory.
For the fourth quarter, U.S. revenue is expected to be around $1.59 billion, with U.S. adjusted EBITDA projected at $161 million. These figures reflect the anticipated negative impact of $643 million in GGR, $550 million in revenue, and $360 million in adjusted EBITDA from sports results in the fourth quarter. However, outside the U.S., thanks to ongoing positive momentum in the UK and Ireland, particularly with favorable sports results in the English Premier League, the group's revenue and adjusted EBITDA for 2024, excluding the U.S., are expected to be approximately 1% and 2% higher than the previous guidance midpoints.
Flutter plans to provide a more detailed update and official guidance for 2025 alongside its fourth-quarter earnings announcement scheduled for March 4, 2025.