Flutter Entertainment(US:FLUT)2025-11-12 21:14Acquisitions and Market Expansion - Flutter Entertainment completed the acquisition of Pluto (Italia) S.p.A for approximately $2.6 billion (€2.3 billion), enhancing its position in the Italian market [178]. - The company acquired a 56% interest in NSX Group for BRL 3,819 million ($678 million), expanding its reach in the Brazilian market [179]. - Brazil launched its regulated market for online sports betting and casino on January 1, 2025, with Flutter receiving a provisional license [194]. - Flutter has obtained five new online gaming licenses in Italy as part of the reorganization of the gambling sector, which aims to improve player protection [191]. - The company plans to continue investing in product development and market expansion to sustain growth momentum in the upcoming quarters [260]. Financial Performance - Revenue increased by 17% to $3,794 million for the three months ended September 30, 2025, compared to $3,248 million for the same period in 2024 [199]. - Adjusted EBITDA rose by 6% to $478 million for the three months ended September 30, 2025, with an Adjusted EBITDA margin of 12.6%, down from 13.9% [211]. - Net loss increased to $789 million for the three months ended September 30, 2025, compared to a net loss of $114 million in the same period in 2024, resulting in a net loss margin of 20.8% [210]. - Adjusted EBITDA increased by 18% to $2,013 million, with the adjusted EBITDA margin rising from 16.6% to 17.3% [253]. - Net loss increased to $417 million for the nine months ended September 30, 2025, compared to a net income of $6 million in the prior year [252]. Revenue Breakdown - U.S. segment revenue grew by 9% to $1,368 million, with AMPs increasing by 8% period over period [215]. - iGaming revenue in the U.S. segment increased by 44% year-over-year, while sportsbook revenue decreased by 5% due to competitive pressures [201]. - Total revenue for the International segment increased by 21% to $2,426 million for the three months ended September 30, 2025, driven by a 10% increase in AMPs and acquisitions contributing 18% [227]. - Sportsbook revenue increased by 11% to $982 million for the three months ended September 30, 2025, with stakes growing 13% [228]. - iGaming revenue increased by 31% to $1,369 million, with acquisitions contributing 21% to the revenue growth [230]. Costs and Expenses - Cost of sales increased by 24% to $2,168 million, with cost of sales as a percentage of revenue rising to 57% from 54% year-over-year [202]. - General and administrative expenses surged by 60% to $702 million, primarily due to revised market access terms and consolidation of acquisitions [205]. - Technology, research and development expenses rose by 29% to $275 million, driven by investments in corporate technology and impairment of assets in India [203]. - Sales and marketing expenses increased by $220 million to $2,595 million, with a decrease in U.S. segment expenses by 5% [246]. - The overall increase in cost of sales as a percentage of revenue was 300 basis points, primarily due to acquisitions contributing 200 basis points [239]. Impairments and Liabilities - Goodwill impairment of $517 million was recorded due to the cessation of operations in India, significantly impacting operating results [206]. - The company incurred impairment charges of $559 million related to Junglee due to the ban on online real money gaming in India [290]. - As of September 30, 2025, the company had material cash requirements from known contractual obligations totaling $6,499 million [299]. - Long-term debt as of September 30, 2025, totaled $12 billion, with $52 million due within 12 months [294]. Regulatory Environment - The regulatory environment in Australia has evolved, with increased point of consumption tax rates impacting operational costs for online betting [193]. - The UK Gambling Commission's new regulations may impose more stringent restrictions on the betting and gaming industry, potentially affecting Flutter's operations [190]. Cash Flow and Financing Activities - Net cash provided by operating activities decreased by $194 million, or 20%, to $756 million for the nine months ended September 30, 2025, compared to $950 million in 2024 [301]. - Net cash used in investing activities increased by $2,488 million, or 385%, to $3,135 million for the nine months ended September 30, 2025, primarily due to acquisitions [303]. - Net cash provided by financing activities increased by $2,761 million, or 1,132%, to $2,517 million for the nine months ended September 30, 2025, driven by significant proceeds from various credit agreements [304]. Market Trends and Player Metrics - The average monthly players (AMPs) metric is used to assess underlying trends, with a focus on online players only, excluding retail activity [173]. - Total Group AMPs increased by 9% to 14 million for the three months ended September 30, 2025, compared to 12.9 million in the prior year [201]. - Total Group AMPs increased to 15,509 for the nine months ended September 30, 2025, compared to 13,662 for the same period in 2024 [240].