Flutter Entertainment (FLUT) H2 2024 Earnings Call March 05, 2025 03:36 AM ET Company Participants Paul Tymms - Group Director - IR & FPAPeter Jackson - CEORob Coldrake - Chief Financial OfficerClark Lampen - Managing DirectorPaul Ruddy - Gaming & leisure analystJed Kelly - Managing Director - Equity ResearchBarry Jonas - Managing DirectorJeffrey Stantial - Managing Director - Gaming & LeisureJohn Decree - Director - Equity ResearchBen Shelley - DirectorAdrien de Saint Hilaire - Director Conference Call Par ...

Core Viewpoint - Flutter Entertainment plc has published its Annual Report on Form 10-K for the financial year ended December 31, 2024, and has filed it with the U.S. Securities and Exchange Commission [1] Group 1 - The company has also prepared a UK annual report that incorporates the Annual Report on Form 10-K, referred to as the Annual Report and Accounts 2024 [1] - The Annual Report and Accounts 2024 is available for public access at the specified URL and has been submitted to the UK National Storage Mechanism for inspection [1][2] - The Annual Report on Form 10-K and the Annual Report and Accounts 2024 can be accessed on the company's official website [2]

Core Viewpoint - Flutter Entertainment plc has published its Annual Report on Form 10-K for the financial year ended December 31, 2024, and has filed it with the U.S. Securities and Exchange Commission (SEC) [1] - The company has also prepared a UK annual report that incorporates the Annual Report on Form 10-K, which is available for public inspection [1] Group 1 - The Annual Report on Form 10-K and the UK Annual Report and Accounts 2024 are publicly accessible on the company's website [2] - The reports have been submitted to the UK National Storage Mechanism for inspection [1]

Financial Data and Key Metrics Changes - Flutter Entertainment reported a revenue growth of 19% and adjusted EBITDA of $482 million, which is 26% higher than the previous year [9][26] - The company generated a net income of $156 million, with earnings per share increasing by 5.59% to $0.45 [26][27] - Adjusted EPS, excluding certain fair value movements, increased by 67% due to a tax credit [27][28] Business Line Data and Key Metrics Changes - In the U.S., revenue increased by 14%, with adjusted EBITDA of $163 million, driven by a 43% growth in iGaming [29][30] - Sportsbook revenue grew by 8%, impacted by adverse sports results, while handle growth moderated to 12% [30][31] - International revenue grew by 14%, with UKI revenue up 20%, driven by strong sportsbook and iGaming performance [31][32] Market Data and Key Metrics Changes - The U.S. sportsbook GGR market share reached 43%, and iGaming GGR market share was 26% [10] - In the UKI market, Flutter increased its market share by 4 percentage points over the last two years [19] - Italy's Sisal brand saw online revenue growth of 41%, benefiting from favorable sports results [33] Company Strategy and Development Direction - Flutter aims to leverage its "Flutter Edge" to enhance product offerings and maintain market leadership, particularly in the U.S. [7][24] - The company plans to continue expanding into new markets, with acquisitions like Snai and NSX expected to enhance scale and diversification [9][24] - Flutter is focused on product innovation, including the launch of new features and loyalty programs to drive customer engagement [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the U.S. business's strength and the potential for continued customer acquisition [12][17] - The company is monitoring regulatory changes and potential tax increases in various states, believing it is well-positioned to mitigate impacts [18][22] - Flutter anticipates strong growth in 2025, with existing state revenue and adjusted EBITDA expected to grow by 33% and 176%, respectively [36][37] Other Important Information - Flutter's cash flow from operating activities increased by 67%, with free cash flow growth of 175% [34][35] - The company plans to repurchase up to $1 billion in shares across 2025 [36] - Flutter is on track to deliver $300 million in annualized cost savings by 2027 [44] Q&A Session Summary Question: Can you discuss the $90 million of investment losses in new states? - Management expects to launch Missouri in Q4 and Alberta in Q1 2026, with Missouri's costs around $80 million and Alberta's around $10 million [50][51] Question: What are the customer acquisition trends? - Management is pleased with customer acquisition opportunities and believes they can continue to grow the business [52] Question: What is the outlook for prediction markets? - Management sees potential in prediction markets but emphasizes the richness of their current sportsbook offerings [54] Question: How are customer acquisition trends between iGaming and sportsbook? - Management reports strong growth in iGaming, driven by product improvements and customer engagement [58] Question: What is the status of the Italian lottery bid? - Management is considering bidding for the lotto contract in Italy, evaluating the financial returns [63][64] Question: What are the early learnings from the Your Way product? - Early engagement with the Your Way product has been strong, with significant customization appealing to customers [71][72] Question: How does the company view handle growth in 2025? - Management does not obsess over handle growth, focusing instead on revenue and EBITDA, which are trending positively [98][100] Question: What is the impact of promotional reinvestment in the U.S.? - Management is disciplined in allocating promotional spending to ensure good returns, with a focus on customer acquisition [125][126] Question: Are there signs of consumer weakness in older U.S. states? - Management does not see any signs of consumer weakness and believes the business is resilient in economic downturns [132][133] Question: What is the strategy for media rights partnerships? - Management is thoughtful about media rights, leveraging their scale to negotiate favorable contracts [137]

Flutter Entertainment (FLUT) H2 2024 Earnings Call March 04, 2025 04:30 PM ET Company Participants Paul Tymms - Group Director - IR & FPAPeter Jackson - CEORob Coldrake - Chief Financial OfficerClark Lampen - Managing DirectorPaul Ruddy - Gaming & leisure analystJed Kelly - Managing Director - Equity ResearchBarry Jonas - Managing DirectorJeffrey Stantial - Managing Director - Gaming & LeisureJohn Decree - Director - Equity ResearchBen Shelley - DirectorAdrien de Saint Hilaire - Director Conference Call Par ...

Financial Performance - The company reported 13.9 million Average Monthly Players (AMPs) and $14,048 million in revenue for fiscal 2024[34]. - For fiscal 2024, 56% of revenue was derived from sportsbook, 40% from iGaming, and 4% from other products, with 91% of revenue generated from online businesses[36]. - The company’s revenue for fiscal 2024 increased by 19% compared to fiscal 2023, which had revenue of $11,790 million[54]. Revenue Breakdown - The U.S. division constituted $5,798 million (41%) of total revenue for fiscal 2024, with a 44% share of the online sports betting market and a 25% share of the iGaming market in states where FanDuel operates[46]. - The UKI division generated $3,598 million (26%) of total revenue for fiscal 2024, while the International division contributed $3,257 million (23%) and the Australia division $1,395 million (10%)[48][52][53]. Investments and Acquisitions - The company acquired a 51% controlling stake in MaxBet for $143 million, aiming to diversify internationally and expand its online offerings[50]. - The company invested $820 million in technology research and development in fiscal 2024, focusing on online sports betting and iGaming[61]. - In fiscal 2024, the company spent $3,205 million on sales and marketing across its four geographic divisions[60]. Market Presence and Operations - The company operates in over 100 countries, with the U.S. division being the fastest-growing segment[44]. - The company operates FanDuel retail sportsbook locations and offers iGaming products in multiple states, ensuring compliance with local regulations[83]. - The partnership with Boyd Gaming Corporation provides first skin access for online sports betting in various jurisdictions[81]. Regulatory Environment - As of December 31, 2024, 35 states have legalized retail sports betting, 30 states have legalized online sports betting, and 6 states have legalized iGaming in the U.S.[79]. - The UK Gambling Act review has led to new regulations, including a statutory levy on licensed operator revenue for gambling harm research, effective from April 2025[90]. - The Irish Gambling Act, enacted in October 2024, introduces significant reforms, including a new licensing framework expected to commence in 2025 or 2026[93]. Compliance and Risk Management - The company has a zero-tolerance approach to money laundering and fraud, implementing various compliance policies and monitoring customer activities[131]. - Compliance with local regulations is essential, as failure to adhere could result in monetary penalties and increased operating costs[122]. - The company employs risk management techniques for sportsbook bets, utilizing mathematical models and setting predefined limits for bet acceptance[578]. Workforce and Employment - As of December 31, 2024, the company had 27,345 employees across 27 countries, with a global employee turnover rate of 20%[135]. - Approximately 7,700 employees are part of the technology function, with 3,900 focused on software engineering[135]. Future Outlook and Strategic Plans - The company plans to update its reportable segments to U.S. and International in its quarterly report for the period ending March 31, 2025[35]. - The company is preparing to report against the EU Corporate Sustainability Reporting Directive, updating its materiality assessment for sustainability issues[140]. Financial Risks - A hypothetical 10% strengthening of the U.S. dollar could result in a $957 million positive translation adjustment in other comprehensive income[586]. - The company may enter into interest rate swaps in the future to manage interest rate risk on outstanding long-term debt[587]. - A 100-basis point increase in market interest rates would increase annual interest expense on long-term debt by $31 million for December 31, 2024, $37 million for December 31, 2023, and $47 million for December 31, 2022[587].

Financial Performance - Flutter Entertainment plc announced preliminary financial information for Q4 and full year 2024 on January 7, 2025[4]. - The company reported a significant increase in revenue, with Q4 revenue reaching €1.5 billion, representing a 15% year-over-year growth[4]. - Full year revenue for 2024 was reported at €5.8 billion, up 12% compared to 2023[4]. User Growth - User data indicated an increase in active customers, with a total of 10 million active users by the end of 2024, a 20% increase from the previous year[4]. Market Expansion - The company plans to expand its market presence in North America, targeting a 25% market share by 2026[4]. - The company expects to launch three new products in 2025, aiming to capture an additional 5% market share[4]. Investment and Innovation - Flutter Entertainment is investing in new technology, with €200 million allocated for R&D in 2025[4]. - Future guidance indicates a projected revenue growth of 10-15% for 2025, driven by user acquisition and product innovation[4]. Strategic Goals - The company has outlined a strategic goal to achieve EBITDA of €1 billion by 2026, reflecting a 30% increase from 2024 levels[4]. - Flutter is exploring potential acquisitions to enhance its product offerings and market reach, with a focus on the European market[4].

Core Insights - Flutter Entertainment reported strong financial results for Q4 and full year 2024, with significant growth in revenue, net income, and adjusted EBITDA, positioning the company well for 2025 [1][4][5] Financial Performance - Q4 2024 revenue reached $3,792 million, a 14% increase from Q4 2023, while full year revenue was $14,048 million, up 19% year-over-year [2][4] - Average monthly players (AMPs) increased by 7% in Q4 and 13% for the full year, reaching 14,605,000 in Q4 [2][4] - Net income for Q4 was $156 million, a significant turnaround from a net loss of $902 million in Q4 2023, and full year net income was $162 million compared to a loss of $1,211 million the previous year [2][4][30] - Adjusted EBITDA for Q4 was $655 million, a 4% increase year-over-year, while full year adjusted EBITDA grew by 26% to $2,357 million [2][4] Market Position and Strategy - Flutter's FanDuel brand solidified its position as the number one operator in both sportsbook and iGaming in the US, with a market share of 36% in online gross gaming revenue [4][16] - The company expanded its international portfolio, adding MaxBet and achieving substantial growth in key markets such as the UK and Italy [4][12] - Flutter's strategic focus on product innovation and customer engagement led to a record sportsbook structural gross revenue margin of 14.5% and a 43% increase in iGaming revenue [6][20] Cash Flow and Capital Management - Net cash provided by operating activities increased by 67% year-over-year to $652 million, while free cash flow surged by 175% to $473 million [2][35] - The company initiated a share repurchase program, returning $121 million in Q4 2024, with plans to return up to $1 billion to shareholders in 2025 [4][51] 2025 Guidance - For 2025, Flutter anticipates revenue growth of 13% and adjusted EBITDA growth of 34% at the midpoint, with existing state revenue expected to reach $7.72 billion, representing a 33% increase [8][53] - The company expects new state launches to incur a negative revenue impact of $40 million and an adjusted EBITDA cost of $90 million [10][55]

Group 1 - Flutter Entertainment is a leading online sports betting and iGaming operator with significant market positions globally, including in the US [2][3] - The company aims to leverage its scale and innovative mindset to drive long-term growth while promoting sustainability through its Positive Impact Plan [2] - Flutter operates a diverse portfolio of brands such as FanDuel, Sky Betting & Gaming, Sportsbet, PokerStars, and Paddy Power [3] Group 2 - Peter Jackson, CEO, and Rob Coldrake, CFO, will participate in the Morgan Stanley Technology, Media & Telecom Conference on March 5, 2025, at 08:30 AM PST [1] - A live audio webcast of the conference will be available on Flutter's investor relations website, with a replay accessible shortly after the event [1]

Group 1: The Greenbrier Companies (GBX) - The Greenbrier Companies is a leading supplier of transportation equipment and services to the railroad and related industries [1] - The company has a Zacks Rank of 1 (Strong Buy) and has seen a 13.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1][2] - The PEG ratio for The Greenbrier Companies is 0.96, compared to 1.96 for the industry, and it possesses a Growth Score of A [2] Group 2: M-tron Industries, Inc. (MPTI) - M-tron Industries designs, manufactures, and markets highly-engineered, high reliability frequency and spectrum control products and solutions [2] - The company also carries a Zacks Rank of 1 and has experienced a 1.7% increase in the Zacks Consensus Estimate for its next year earnings over the last 60 days [2][3] - M-tron Industries has a PEG ratio of 0.88, compared to 1.47 for the industry, and it possesses a Growth Score of A [3] Group 3: Flutter Entertainment PLC (FLUT) - Flutter Entertainment is an online sports betting and iGaming operator [3] - The company holds a Zacks Rank of 1 and has seen a 9.2% increase in the Zacks Consensus Estimate for its next year earnings over the last 60 days [3] - The PEG ratio for Flutter Entertainment is 0.55, compared to 1.35 for the industry, and it possesses a Growth Score of B [3]