Flutter Entertainment(FLUT) - 2025 Q3 - Quarterly Results

Financial Performance - Q3 2025 revenue increased by 17% year-over-year to $3,794 million, with average monthly players (AMPs) growing by 9% to 14,133,000[4] - The net loss for Q3 2025 was $789 million, significantly higher than the $114 million loss in Q3 2024, primarily due to a non-cash impairment charge of $556 million related to regulatory changes in India[10] - Adjusted EBITDA for Q3 2025 was $478 million, reflecting a 6% increase year-over-year, with an adjusted EBITDA margin of 12.6%[4] - Total revenue for the quarter reached $3,794 million, a 17% increase year-over-year, with organic iGaming revenue growth of 19% offsetting customer-friendly sports results[42] - iGaming revenue surged by 35% year-over-year to $1,899 million, driven by a 30% increase in average monthly players[41] - Q3 adjusted earnings per share rose by 29% to $1.64, supported by strong performance in both US and international markets[6] - Adjusted EBITDA grew by 6% to $478 million, with an adjusted EBITDA margin of 12.6%, reflecting a 130 basis point decrease year-over-year[45] - International revenue increased by 21% year-over-year to $2,426 million, with Brazil showing remarkable growth of 412%[52] - The company reported a loss on existing equipment of $9 million, indicating challenges in asset management[106] - Net income for the three months ended September 30, 2025, was a loss of $789 million, compared to a loss of $1,114 million in the same period of 2024[106] Revenue Guidance and Projections - Full-year 2025 revenue guidance has been updated to $16.69 billion, representing a 19% year-over-year growth, with adjusted EBITDA expected at $2.915 billion, a reduction from previous guidance by $570 million[8] - The updated 2025 guidance includes a Group revenue of $16.69 billion and adjusted EBITDA of $2.915 billion, representing year-over-year growth of 19% and 24%, respectively[65] - US revenue and adjusted EBITDA are projected at $7.17 billion and $935 million, reflecting year-over-year growth of 24% and 84%, respectively[66] - International revenue is expected to reach $9.52 billion with adjusted EBITDA of $2.24 billion, indicating year-over-year growth of 15% and 8%, respectively[67] Strategic Initiatives - The launch of "FanDuel Predicts" is scheduled for December 2025, aimed at expanding the customer base in states without regulated sports betting[12] - Flutter is focused on expanding its portfolio in the US, including the launch of FanDuel Predicts, to leverage market leadership and diversification strategies[37] - The integration of Snai is progressing well, with enhanced iGaming propositions and increased customer acquisition volumes expected to drive synergies[30] - Flutter extended its strategic partnership with Boyd Gaming to 2038, acquiring a 5% stake in FanDuel for approximately $1.553 billion, expected to save $65 million annually starting July 2025[4] Costs and Expenses - Sales and marketing expenses rose by 19% year-over-year, accounting for 17.0% of total revenue, benefiting from growth in regions with lower marketing costs[58] - The cost of sales as a percentage of revenue increased by 300 basis points to 48.1%, influenced by acquisitions and higher taxes in certain regions[57] - The company incurred restructuring and integration costs of $218 million for the twelve months ended September 30, 2025[122] Cash Flow and Debt - Available cash increased by $244 million year-over-year, closing at approximately $1.7 billion, while net debt was $10,602 million at the end of Q3 2025, resulting in a leverage ratio of 4.0x[61] - Cash provided by operating activities was $2,092 million, compared to $2,900 million in the previous year[106] - Total debt as of September 30, 2025, was $12,099 million, with net debt standing at $10,602 million, resulting in a leverage ratio of 3.7x[124] Market Conditions and Challenges - The cessation of real-money gaming in India is expected to adversely impact future results in the APAC region[84] - Future outlook remains cautious due to ongoing market volatility and operational challenges[106] - The company remains engaged with policymakers regarding potential gaming tax increases in the UK, emphasizing the industry's contribution to tax revenues and employment[32] Other Financial Metrics - The leverage ratio increased to 4.0x as of Q3 2025, reflecting the impact of recent acquisitions and strategic investments[4] - Free Cash Flow is defined as net cash from operating activities minus capital expenditures, providing insight into cash generation capabilities[102] - Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of revenue, offering a view of operational efficiency[93] - Constant currency growth rates are used to assess performance without the impact of fluctuating foreign exchange rates, enhancing comparability[88]