Core Viewpoint - Flutter Entertainment has acquired a 56% stake in NSX Group, a Brazilian operator, for approximately $350 million, aligning with its strategy to invest in leading positions in attractive international markets [1][2][3] Group 1: Acquisition Details - The acquisition involves a cash payment of about $350 million and the contribution of Flutter's existing Betfair Brazil business [3] - The deal is expected to generate an additional $220 million in revenue and an adjusted EBITDA loss of $70 million in 2025 [2][4] - Flutter has established mechanisms for increasing its shareholding in NSX through reciprocal put/call arrangements in the fifth and tenth years post-completion [3] Group 2: Market Position and Strategy - The Brazilian online sports betting and iGaming market is characterized by a population exceeding 200 million, with a strong cultural affinity for sports, particularly soccer [6] - NSX has rapidly grown to become the fourth-largest operator in Brazil since its market entry in 2021, capturing a 9% market share by the end of 2023 [6][12] - The acquisition is expected to enhance Flutter's competitive position in Brazil and leverage its proprietary pricing and risk management capabilities to improve NSX's sportsbook offerings [6] Group 3: Financial Outlook - Flutter anticipates an increase in leverage due to the acquisition, but expects it to decrease over time as profitable growth opportunities materialize [4] - The company remains committed to maintaining a medium-term leverage ratio of 2.0-2.5x [4]

Core Viewpoint - Flutter Entertainment PLC reported quarterly earnings that missed both revenue and earnings estimates, leading to a decline in stock price, although some investors are reassessing the company's fundamentals and potential for recovery [1][4]. Financial Performance - Earnings per share (EPS) were $1.59, missing estimates of $1.89 [1]. - Revenue was reported at $3.67 billion, below expectations of $3.84 billion [1]. - Following the earnings report, FLUT stock dropped approximately 4% but later reduced losses to nearly half [4]. Market Context - The stock is down 6.3% in 2025, similar to DraftKings, which is down 7% [6]. - A lack of new sports betting initiatives in many states is contributing to the downward pressure on sports betting stocks [7]. - Flutter Entertainment and DraftKings benefit from online casinos, which provide a buffer against the struggles faced by traditional brick-and-mortar competitors [8]. Company Insights - Flutter's CEO attributed the earnings miss to "customer-friendly" outcomes during the NCAA Men's Basketball Tournament, where many favorites won, resulting in bettors winning their bets [10]. - The company remains confident in its pricing strategy and expects gross revenue margins to align with expected outcomes over time [11]. Industry Resilience - Sports betting is viewed as resilient during economic downturns, with consumers likely to continue engaging in betting activities even in tough conditions [12]. - The industry is also expected to be shielded from tariffs, making it a more stable investment compared to other discretionary sectors [12]. Analyst Ratings - Analysts have a consensus Buy rating on FLUT stock, with a 12-month price target of $306.28, indicating a potential upside of 26.87% from the current price of $241.41 [13][14]. - The stock has recently pulled back to its 50-day simple moving average, and traders are watching for support at this level [13].

Core Insights - The article emphasizes the investment philosophy focused on small cap companies, highlighting the importance of identifying mispriced securities through understanding financial drivers and utilizing DCF model valuation [1]. Group 1 - The investment strategy is not confined to traditional categories such as value, dividend, or growth investing, but rather considers all prospects of a stock to assess risk-to-reward [1].

Core Viewpoint - Flutter Entertainment plc has announced the launch of a third tranche of its share repurchase program, with a maximum consideration of up to $225 million on the New York Stock Exchange [1][2]. Group 1: Share Repurchase Program - The Buyback will commence on July 1, 2025, and conclude no later than September 30, 2025, aimed at reducing Flutter's share capital [2]. - This Buyback is part of a multi-year share repurchase program totaling up to $5 billion, initially announced on September 25, 2024, with an expected return of approximately $1 billion to shareholders in 2025 [2]. - Davy Securities Unlimited Company will conduct the Buyback independently, with a maximum of 17,739,905 ordinary shares to be acquired, adjusted for shares bought in previous tranches [3]. Group 2: Regulatory Compliance - The Buyback will adhere to U.S. Securities Exchange Act rules and EU Market Abuse Regulation, ensuring compliance with legal standards [4]. - Repurchased shares will be cancelled following the Buyback [4]. Group 3: Future Considerations - Future buyback decisions will depend on ongoing assessments of the company's capital needs and general market conditions [5]. Group 4: Company Overview - Flutter is recognized as the world's leading online sports betting and iGaming operator, with a diverse portfolio of brands including FanDuel, PokerStars, and Paddy Power [7][8]. - The company aims to leverage its scale and competitive advantages to foster long-term growth and sustainability [7].

Flutter Entertainment (FLUT) came out with quarterly earnings of $1.59 per share, beating the Zacks Consensus Estimate of $1.54 per share. This compares to earnings of $0.10 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.25%. A quarter ago, it was expected that this online gambling company would post earnings of $1.56 per share when it actually produced earnings of $2.94, delivering a surprise of 88.46%.Over the last four q ...

Financial Data and Key Metrics Changes - Group revenue increased by 8% year over year, with net income growing by 289% and adjusted EBITDA rising by 20% [19][20][29] - Earnings per share increased to $1.57 from a loss of $1.1, with adjusted earnings per share up by 51% [20] - Net cash from operating activities reduced by 44%, and free cash flow decreased by 52% year over year [26] Business Line Data and Key Metrics Changes - U.S. revenue was 18% higher year over year, with sportsbook growth of 15% and iGaming growth of 32% [21][22] - International revenue was $2 billion, reflecting constant currency growth of 32%, driven by strong performance in SEA and CEE regions [22][23] - iGaming in India saw a remarkable year-over-year revenue growth of 45% [16][23] Market Data and Key Metrics Changes - SEA region experienced excellent growth of 14%, driven by 25% AMP growth [23] - UKI saw overall growth moderate to 2%, but iGaming growth remained strong at 9% [23] - CEE's strong growth of 15% was driven by performance in Georgia and Serbia [23] Company Strategy and Development Direction - The company is focused on scaling its U.S. business and leveraging its international operations for diversification [6][11] - The acquisition of SNAI in Italy is expected to enhance scale and operational benefits [14][17] - The company is excited about its outcome-based pricing technology, which aims to innovate across U.S. and international markets [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite potential economic pressures, citing historical performance during consumer pressure periods [7][11] - The company remains optimistic about long-term growth opportunities in the global regulated market [18] - Management highlighted the importance of net revenue growth as a key metric, emphasizing a disciplined approach to promotions and customer acquisition [57][63] Other Important Information - The company is committed to a share repurchase program, expecting to return approximately $1 billion to shareholders during 2025 [28] - The acquisition of Snai is expected to generate synergies of €70 million over three years [48] - The company is monitoring developments in prediction markets and exploring opportunities in this space [10][86] Q&A Session Summary Question: Can you elaborate on the basketball-related factors affecting handle? - Management acknowledged some weakness in basketball handle but noted strength in NFL and MLB performance, indicating handle growth is in line with expectations [36][39] Question: How is iGaming performing compared to peers? - Management expressed satisfaction with iGaming performance, highlighting product delivery and unique content as key drivers [37] Question: What is the integration process for Snai? - Management is optimistic about the integration, expecting to realize synergies and operational benefits quickly [47] Question: How does the company view the impact of favorable sports results on guidance? - Management noted that while favorable results can impact cash balances, they remain confident in pricing and structural margin assumptions [87][88] Question: What are the strategic merits of bidding for the Italian Lotto? - Management highlighted the opportunity to cement leadership in Italy and the potential for digital growth in the lottery market [78][79] Question: Is there potential for maturity in U.S. states? - Management indicated that no states have reached maturity yet, with ongoing growth expected in existing states [95]

Core Insights - Flutter Entertainment reported strong Q1 2025 financial results, with a year-over-year net income growth of 289% and adjusted EBITDA growth of 20% [7][40][34] - The company continues to expand its US operations, achieving a 15% growth in sportsbook revenue and a 32% growth in iGaming revenue despite adverse sports outcomes during March Madness [34][12] - Flutter's international segment also showed resilience, with a 1% revenue growth year-over-year, driven by strong performances in Southern Europe and Africa [22][35] Financial Performance - Q1 2025 adjusted EBITDA reached $161 million, significantly higher than the previous year, reflecting strong operating leverage [34] - Total revenue for the quarter was reported at $3.67 billion, with the US segment contributing $1.9 billion and the international segment contributing $2 billion [58][35] - The company expects 2025 revenue and adjusted EBITDA to reach $17.08 billion and $3.18 billion, representing year-over-year growth of 22% and 35% respectively [44][48] US Market Update - Flutter maintains a leading position in the US market with a 43% market share in sports betting and a 27% share in iGaming [12][34] - The average monthly players (AMPs) grew by 11% to over 4.3 million, indicating strong customer engagement [12] - Innovative features such as "Your Way" pricing capability and "Bet back tokens" have been launched to enhance customer experience and engagement [14][15] International Market Update - The acquisition of Snai in Italy is expected to enhance Flutter's scale in the European market, with integration already underway [23][11] - The Southern Europe & Africa (SEA) region reported a 14% revenue increase year-over-year, driven by strong market share growth [37][22] - The Central and Eastern Europe (CEE) region also showed robust growth, with a 15% revenue increase year-over-year [29] Strategic Outlook - Flutter's long-term growth strategy focuses on sustainable business practices and responsible gaming, with a commitment to invest in both organic growth and M&A opportunities [8][30] - The company is optimistic about navigating the evolving US regulatory landscape and expanding its market presence [20][21] - Flutter's diversified portfolio of brands positions it well to capitalize on the growing global online sports betting and iGaming market, projected to be worth approximately $368 billion by 2030 [8][57]

Core Insights - Flutter Entertainment reported a strong financial performance for Q1 2025, with significant year-over-year growth in revenue and net income, driven by the expansion of its US business and strategic acquisitions [1][4][5] Financial Performance - Average monthly players (AMPs) increased by 8% to 14,880, compared to 13,722 in Q1 2024 [1] - Revenue for Q1 2025 reached $3,665 million, an 8% increase from $3,397 million in Q1 2024 [1] - Net income surged to $335 million, a 289% increase from a net loss of $177 million in Q1 2024 [1][8] - Adjusted EBITDA rose by 20% to $616 million, with an adjusted EBITDA margin of 16.8%, up from 15.1% [1][4] - Earnings per share improved to $1.57, compared to a loss of $1.10 in Q1 2024, marking a 243% increase [1][9] US Market Performance - US revenue grew by 18% to $1,666 million, with sportsbook revenue up 15% and iGaming revenue up 32% [4][11] - The US market share for sports betting and iGaming stood at 43% and 27%, respectively, with a 48% share of net gaming revenue [11] - Adjusted EBITDA for the US segment increased significantly to $161 million from $26 million in Q1 2024, reflecting strong operating leverage [14] International Market Performance - International revenue saw a modest increase of 1% year-over-year, with adjusted EBITDA decreasing by 1% [16] - Key growth regions included Southern Europe and Africa, which offset declines in the Asia Pacific sportsbook segment [16][18] Strategic Acquisitions and Guidance - The company updated its 2025 guidance, expecting total revenue of $17.08 billion and adjusted EBITDA of $3.18 billion, representing year-over-year growth of 22% and 35%, respectively [4][24] - The acquisitions of Snai and NSX are anticipated to contribute an additional $1.07 billion in revenue and $120 million in adjusted EBITDA for 2025 [3][22] Capital Structure and Shareholder Returns - Total debt increased to $6,824 million, with a leverage ratio of 2.2x, consistent with the previous quarter [20] - The share repurchase program continued, with $230 million spent on repurchasing 891 thousand shares in Q1 2025 [21]

Group 1 - The core viewpoint is that the NCAA's college basketball tournament results negatively impacted the first-quarter performance of FanDuel's parent company, Flutter [1] - Flutter reported first-quarter adjusted earnings per share of $1.59, which fell short of Wall Street's consensus estimate of $1.89 per share [1] - The company's revenue for the first quarter was $3.67 billion, missing the LSEG estimates of $3.84 billion [1] Group 2 - The company has lowered its full-year U.S. guidance due to unfavorable sports results, but has raised its outlook for global performance based on currency adjustments and international acquisitions [2] - The CEO anticipates that customers will continue to spend on online sports and casino games despite broader global economic concerns affecting consumer sentiment [2]

Player Metrics - Total Group Average Monthly Players (AMPs) increased to 14,880 in Q1 2025 from 13,722 in Q1 2024, representing a growth of 8.5%[149] - Sportsbook AMPs rose to 8,798 in Q1 2025, up from 8,340 in Q1 2024, indicating a year-over-year increase of 5.5%[149] - iGaming AMPs grew to 7,260 in Q1 2025, compared to 6,535 in Q1 2024, reflecting a growth of 11.1%[149] - Total International AMPs rose to 10,568, an increase of 7.5% from 9,825 in the previous year[171] - Southern Europe and Africa revenues grew by 14%, with AMPs reaching 1.8 million, a growth of 25%[182] Revenue and Income - Revenue increased by 8% to $3,665 million for the three months ended March 31, 2025, compared to $3,397 million for the same period in 2024[152] - U.S. segment revenue grew by 18% to $1,666 million, driven by a 15% increase in Sportsbook revenue and a 32% increase in iGaming revenue[166][167] - Net income increased by $512 million to $335 million for the three months ended March 31, 2025, with a net income margin of 9.1% compared to a net loss margin of 5.2% in the prior year[161] - Adjusted EBITDA rose by 20% to $616 million, with an Adjusted EBITDA margin of 16.8%, up from 15.1% in the previous year[162] - International segment revenue slightly increased by 1% to $1,999 million, with iGaming revenue up by 4%[172] - Total International segment revenue increased by 1% to $1,999 million for the three months ended March 31, 2025, compared to $1,987 million for the same period in 2024[176] Expenses and Profitability - Technology, research and development expenses increased by 13% to $215 million, reflecting continued investment in product development[154] - Sales and marketing expenses decreased by 5% to $840 million, with a revenue percentage drop from 26% to 23%[155] - Operating profit increased by $99 million to $223 million, attributed to revenue growth and cost management[157] - Other income improved by $390 million to $216 million, primarily due to a significant change in the fair value of the Fox Option liability[158] - Adjusted EBITDA for International was $518 million for the three months ended March 31, 2025, a 1% decrease from $524 million for the same period in 2024[186] Market Developments - The acquisition of Snaitech S.p.A was completed for approximately €2.3 billion ($2.6 billion), expected to enhance the International segment starting Q2 2025[131] - Flutter acquired a 56% interest in NSX Group for approximately $346 million, with completion expected in May 2025, aimed at expanding in the Brazilian market[132] - The U.S. segment is identified as the largest growth opportunity, with FanDuel active in 22 states as of March 31, 2025[136] - The regulatory environment in Italy is evolving, with new online gaming licenses expected to be issued by May 30, 2025, following a legislative decree approved in August 2023[143] - Brazil launched its regulated market for online sports betting and casino on January 1, 2025, with Flutter receiving a full license on February 7, 2025[147] Cash Flow and Financial Position - As of March 31, 2025, the company had $1,537 million in cash and cash equivalents available for corporate use[195] - Net cash provided by operating activities decreased by $149 million, or 44%, to $188 million for the three months ended March 31, 2025, compared to $337 million for the same period in 2024[204] - Net cash used in investing activities decreased by $159 million, or 61%, to $100 million for the three months ended March 31, 2025, compared to $259 million for the same period in 2024[206] - Net cash used in financing activities increased by $90 million, or 50%, to $271 million for the three months ended March 31, 2025, compared to $181 million for the same period in 2024[207] - Cash outflow in player deposit liabilities was $220 million due to timing of sports events for the three months ended March 31, 2025[205] - Cash outflow of $210 million in other liabilities was related to retention bonuses from the Singular acquisition and increased bonus payouts for the three months ended March 31, 2025[205] Regulatory and Risk Factors - The ongoing review of the UK Gambling Act may lead to more stringent regulations, potentially impacting Flutter's operations in its second-largest market[142] - The fair value of the Fox Option liability ranges from $52 million to $2,098 million as of March 31, 2025, depending on various assumptions[212] - The Group determined there was no impairment of goodwill for any reporting units following the change in reporting structure within the International segment[215] - There were no significant changes in exposure to market risk during the three months ended March 31, 2025[218] - The decrease in capital expenditures contributed to the reduction in net cash used in investing activities for the three months ended March 31, 2025[206] - The increase in cash outflow for financing activities was primarily driven by the repurchase of ordinary shares in the three months ended March 31, 2025[207] Revenue Breakdown - Sportsbook revenue decreased by 2% to $880 million for the three months ended March 31, 2025, with amounts staked down 6% to $6,912 million[177] - iGaming revenue increased by 4% to $1,050 million for the three months ended March 31, 2025, driven by a 9% growth in AMPs[179] - UKI revenue grew 2% year-over-year, with iGaming growing 9% driven by the rollout of premium games[181] - APAC revenue decreased by 13%, primarily due to an 18% decline in sportsbook revenues in Australia[183] - Central and Eastern Europe revenue grew by 15%, driven by strong performances in Georgia and Serbia[184] - Brazil revenue was down 44% due to customer re-registration friction in the newly regulated market[185]