Flutter Entertainment(FLUT) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Group revenue increased by 16% year over year, while adjusted EBITDA grew by 25% [22][5] - Net income decreased by 88% year over year due to increased non-cash charges, primarily related to FOX option valuation [23][6] - Cash from operating activities increased by $36 million year over year, while free cash flow reduced by 9% [6][26] Business Line Data and Key Metrics Changes - In the U.S., revenue grew by 17%, with sportsbook growth of 11% and exceptional iGaming growth of 42% [24][14] - International revenue increased by 15% year over year, driven by the SNAI and NSX acquisitions [17][24] - Adjusted EBITDA for international markets was £591 million, reflecting a 13% year-over-year increase [25] Market Data and Key Metrics Changes - The U.S. market maintained its position as the number one online operator in both sportsbook and iGaming [14][12] - The company achieved over 30% share of the online market in Italy following the SNAI acquisition [12] - In Brazil, the company is optimistic about significant market opportunities and is focusing on product and marketing improvements [12][13] Company Strategy and Development Direction - The company is focused on expanding its U.S. market presence and has made significant progress in regulatory matters [10][6] - Strategic acquisitions, such as SNAI and NSX, are aimed at enhancing market leadership in Italy and Brazil [12][24] - The company is committed to returning capital to shareholders while maintaining flexibility for organic and inorganic investments [29][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's fundamentals and strategic objectives for the remainder of 2025 [20][21] - The company is monitoring regulatory developments closely, particularly in relation to tax changes in various states [10][44] - Management highlighted the importance of maintaining a balanced tax strategy to promote market growth and investment [10][9] Other Important Information - The company has extended its market access agreement with Boyd, which is expected to deliver approximately $65 million in annual cost savings [27][29] - The company is targeting $300 million in savings from its cost transformation program, with the majority expected to arise in 2027 [26][25] Q&A Session Summary Question: U.S. Marketing and Efficiency Drivers - Management noted that U.S. marketing expenses are lower year over year due to a maturing stake profile and proactive marketing phasing into H2 [40][41] Question: Prediction Markets Investment - Management is evaluating regulatory developments in prediction markets and assessing potential opportunities for Fanjul [38][39] Question: Illinois Surcharge and Future Strategy - Management expressed disappointment over the Illinois wager fee and introduced a fee to mitigate its impact, viewing Illinois as an outlier [44][43] Question: California Sports Betting Update - Management is monitoring developments in California, particularly regarding the AG's opinion on DFS and the importance of working with tribal stakeholders [49][48] Question: iGaming Growth and Market Penetration - Management believes there is significant potential for iGaming growth, focusing on acquiring direct casino customers [59][60] Question: International Business Performance - Management highlighted strong performance in Southern Europe and Africa, particularly following the SNAI acquisition [111][112]