Flutter Entertainment Posts Q1 Net Loss Despite Rising Revenues
Flutter Entertainment posted a net loss of $375 million in Q1 after rising expenses and adverse foreign currency exchange impacts countered a 16.4% annual increase in revenue.
Flutter Entertainment reports net loss in Q1, despite rising revenue.
LISTEN TO THIS ARTICLE:The company saw revenue of $3.4 billion in the first three months of the year with growth in all markets except Australia. The company’s FanDuel brand continued to flourish in the US with revenue of more than $1.41 billion while revenue in the UK and Ireland was also up year-on-year. Furthermore, thanks to the growth of Sisal in Italy, Flutter also saw an increase in international business revenue.
While the news from Australia was less positive, CEO Peter Jackson described the group’s performance as “excellent”.
We have had an excellent start to the year. In the US, FanDuel’s top-line momentum is translating into strong growth in US Adjusted EBITDA and market share gains … Outside of the US, our focus on delivering the best products for our players is driving good momentum in key markets such as the UK where the launch of Super Sub on Paddy Power has been our most successful product launch to date.
Excellent US Performance
The US online gambling market now brings in more than 40% of the group's total revenue. FanDuel began the year with a strong performance, demonstrated by a record Gross Gaming Revenue (GGR) share of 27%. Flutter attributed this to its emphasis on direct casino player engagement and customer experiences, in addition to introducing new games and content at FanDuel Casino.
In regards to sports betting, FanDuel’s online Net Gaming Revenue (NGR) market share also rose to 52% and the brand expanded its presence by launching in Vermont and North Carolina during Q1.
Although total new sportsbook and casino player volumes were down this quarter, Flutter noted this was due to the previous year’s significant acquisition volumes in Ohio being absent this quarter. However, the number of new players acquired in states that launched before 2022 was 12% higher compared to last year.
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Expenses Lead to Net Loss
Flutter also saw revenue increase in the UK and Ireland. It was up 17% driven by an increase in average monthly players.
However, while the company has enjoyed growth, it has been accompanied by an increase in expenses. Cost of sales increased by 16.4% to $1.79 billion, and nearly all operating expenses saw a rise, with the exception of sales and marketing, which remained steady at $881 million.
The group also reported $174 million in other finance-related costs and $112 million in interest expenses. Consequently, pre-tax profit for Q1 was $162 million, slightly higher than $152 million from the previous year.
Flutter paid $15 million in tax, in contrast to the $41 million in total benefits received last year, resulting in a net loss of $177 million, compared to an $11 million net loss in 2023. Other factors contributed to a more substantial comprehensive net loss. The main challenge for Flutter was a $185 million loss on the translation of the net assets of entities denominated in foreign currencies.
Additionally, the group recorded a $21 million loss on net investment hedges, a $14 million loss on the fair value of cash flow hedges transferred to the income statement, and a $10 million loss from non-controlling interests. Altogether, these resulted in a comprehensive net loss of $375 million for Q1, in contrast to a $54 million net profit in 2023, which was buoyed by significant foreign currency gains.
On a positive note, adjusted EBITDA rose by 46% to $514 million. Excluding the US, this figure reached $488 million, marking a 20.2% increase year-on-year.
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