Flutter Entertainment plc Q3 FY2024 earnings call

• Peter Jackson highlighted Q3 was very strong with AMP and revenue growth of 16% and 27% respectively, EBITDA 74% higher. NFL season helped drive handle growth, customer economics remained compelling with 18-month payback periods, customer acquisition up 10%. Product innovations like expansion of The Pulse, live player prop markets, same game parlays driving engagement and margins. - Rob Coldrake mentioned Group delivered 27% revenue growth, adjusted EBITDA $450 million, net loss $114 million. US performance exceeded expectations, outside US growth across segments. Cash flow impacted by derivative instrument settlement. Strong deleveraging with leverage ratio reduced to 2.4 times. Announced share repurchase program starting November 14 to repurchase up to $350 million of ordinary shares by Q1 2025. Progress on acquisitions of NSX and Snai expected to complete by end of Q2 2025, with earnings consolidation from July 1, 2025.

In the US, revenue grew 51% with adjusted EBITDA at $58 million for the quarter. Outside the US, UKI maintained strong momentum with EBITDA growth of 29%, Australia had 12% revenue and 14% adjusted EBITDA growth year-over-year, and international saw revenue grow 17% on a constant currency basis with adjusted EBITDA up 36% on a constant currency basis. US revenue growth of 51% included strong growth across new and existing states, sportsbook revenue grew 62% driven by handle growth, and iGaming revenue was 46% higher. Outside US, UKI benefited from in-year phasing of European football championship marketing, Australia from favorable sports results, and international from the addition of MaxBet and growth in consolidate and invest markets.

• For 2024, US full-year revenue midpoint guidance reduced by $50 million to $6.15 billion, adjusted EBITDA midpoint $710 million with range $670 million to $750 million. Group ex-US upgraded to $8.2 billion revenue and $1.82 billion adjusted EBITDA midpoint. Australia adjusted EBITDA expectations increased to approx $290 million. Guidance based on sports results in line, current exchange rates, no new state openings, consistent regulation.

• Sports results impact on performance. - Foreign exchange and variable interest rate risk from derivative instrument settlement. - Regulatory changes in various markets that could affect operations and growth.

Q: On Your Way beta and Italy synergies.

A: Peter said Your Way product to be rolled out when ready, no rush; Rob said Snai acquisition expected to compound position in Italy, significant cost and revenue synergy plan, excited about Snai as complementary brand.

Q: On Ontario positioning and casino AMP growth.

A: Peter said FanDuel product migrated to US tech stack in Ontario, resonating well; Rob said 43% casino AMP growth from both direct casino and cross-sell segments, pleased with product performance.

Q: On UK budget and share repurchase.

A: Peter said UK better placed to absorb tax changes, government consulting on tax structure consolidation; Rob said share repurchase commences later this week, will introduce next tranche at Q4 results in March.

Q: On Fox option and UK white paper.

A: Peter said ask Fox about option exercise; Rob said UK white paper consultation ongoing, no change to previously guided GBP25 million to GBP50 million EBITDA impact.

Q: On Your Way and long-term hold.

A: Peter said Your Way factored into long-term hold guidance, excited about product's potential impact on engagement and margins.