Flutter Entertainment Share News (FLTR)

(Sharecast News) - Flutter Entertainment reported a solid third quarter on Thursday, but cut its full-year guidance after customer-friendly sports results, increased US investment and regulatory changes in India weighed on profitability.

The company also announced the December launch of FanDuel Predicts, a new prediction-market product targeting US states without regulated sports betting.

Flutter, which now has its primary listing in New York, posted third-quarter revenue of $3.79bn, up 17% year-on-year, with average monthly players rising 9% to 14.1 million.

Adjusted EBITDA increased 6% to $478m, though the margin slipped 130 basis points to 12.6%.

A net loss of $789m, compared with a $114m loss a year earlier, reflected a $556m non-cash impairment tied to regulatory changes in India and a previously communicated $205m payment to Boyd Gaming to amend US market-access terms.

US revenue increased 9%, driven by 44% growth in iGaming.

Sportsbook average monthly players (AMPs) returned to growth, rising 5% after a decline in the second quarter, but sportsbook revenue fell 5% due to unfavourable sporting outcomes and heavy promotional activity by competitors at the start of the NFL season.

Adjusted EBITDA for the division declined 12% to $51m.

Flutter said stepped-up FanDuel investment in the fourth quarter had already been effective, with US handle up 10% year-on-year quarter-to-date and a strong start to the NBA season.

International revenue grew 21% and adjusted EBITDA rose 10% to $505m, helped by the acquisitions of Snai and Betnacional.

Organic iGaming revenue increased 10%, with strong growth in Southeast Asia offsetting the impact of regulatory changes in India.

Flutter said organic sportsbook revenue declined 6%, reflecting tough comparisons with the strong Euros tournament and bookmaker-favourable results last year.

Adjusted earnings per share rose 29% to $1.64, supported by non-controlling interest credits.

Net cash from operating activities fell 28% and free cash flow by 78%, both due to the Boyd payment.

Flutter cut its full-year revenue and EBITDA forecasts to $16.69bn and $2.915bn respectively, reductions of $570m and $380m from previous guidance.

The revised outlook incorporated third quarter trading, continued customer-friendly sports outcomes early in the fourth quarter - with an EBITDA impact of about $170m - higher fourth quarter sportsbook investment, the launch of FanDuel Predicts, tax adjustments related to the Illinois wager fee, and India's regulatory changes. Even after the downgrade, the group expects revenue and EBITDA to grow 19% and 24% year-on-year.

"Flutter delivered a solid third quarter, with continued momentum in both our US and International businesses," said chief executive Peter Jackson.

"We are the clear number one operator in the US, and we will continue to build on that position to drive future profitability.

"Our strategic investments, including the launch of FanDuel Predicts and recent International acquisitions, position us exceptionally well to capture new opportunities and deliver sustainable, profitable growth.

"Our diversified portfolio and disciplined approach give me great confidence in our ability to lead the industry and increase long-term value for shareholders."

At 1147 GMT, shares in Flutter Entertainment were down 2.47% in London at 17,370p.

Reporting by Josh White for Sharecast.com.