Flutter Entertainment plc Q2 FY2025 earnings call

• Transition: Flutter has established itself in U.S. capital markets since moving to U.S. primary listing in May last year, included in CRSP and Russell indices. • Partnerships: Extended U.S. market access partnership with Boyd in July, increasing FanDuel ownership to 100% and securing favorable state market access. • Regulatory: Made progress in U.S. regulatory front; disappointed by Illinois' wager fee but introduced $0.50 per bet fee to mitigate. • International: Completed Snai and NSX transactions; launched MyCombo in Italy and a bingo network; migrated 9 million Sky Betting & Gaming customers onto shared UKI platform and PokerStars Italian customers onto shared SEA platform.

In the U.S., revenue grew 17% in Q2, with sportsbook up 11% and iGaming surging 42%. Adjusted EBITDA was $400 million, a 54% increase. For International, revenue reached $2.4 billion and adjusted EBITDA was $591 million, marking 15% and 13% growth year-over-year respectively, with the acquisitions of Snai and NSX contributing to the growth.

• Upgraded 2025 full-year adjusted EBITDA guidance, factoring in $100 million positive impact from U.S. sports results, $40 million adverse impact from U.S. tax changes in Illinois, Louisiana, and New Jersey (mitigated by Boyd savings), and $20 million benefit from Missouri launch delay. • Now anticipates group revenue of $17.26 billion and adjusted EBITDA of $3.295 billion at midpoint. • U.S. is expected to have revenue of $7.58 billion and adjusted EBITDA of $1.245 billion. International revenue is reaffirmed at $9.68 billion and adjusted EBITDA at $2.3 billion.

• Illinois' wager fee unfairly impacts recreational customers and risks fueling the black market. • Political changes in the U.S. could affect regulatory policies. • Intense market competition in various regions poses challenges.

Q: On U.S. marketing, drivers of efficiencies and leverage?

A: Partly due to maturing state profile and phasing marketing into the second half.

Q: On prediction markets, how to underwrite risk?

A: Evaluating opportunities and not speculating on political changes.

Q: On Illinois surcharge, state basis?

A: Introduced the fee as the fairest way to mitigate, expecting Illinois to be an outlier.

Q: On California, update?

A: Respecting tribes and working with them as important stakeholders.

Q: On early July handle trends?

A: Not commenting on current trading.

Q: On Your Way parlay progress?

A: Exciting plans for football season with a revolutionary approach.

Q: On iGaming growth and penetration?

A: iGaming has significant room for growth with low penetration, focused on casino direct customers and product innovation.

Q: On Boyd deal and other access agreements?

A: Opportunities for other access agreements but longer term.

Q: On U.S. gross margin and cost of sales?

A: Made progress in payment processing fees and fraud costs, continuing to work on other cost items.

Q: On Snai platform migration and synergies?

A: Excited about H1 2026 migration to bring full suite of products, with increased conviction on synergies.

Q: On Brazil and Latin America expansion?

A: Evaluating opportunities in Latin America and other regions as part of capital allocation.

Q: On International outperformance and underperformance?

A: SEA business outperforming, some mature markets like Australia have slowed but still growing.

Q: On Missouri launch costs?

A: Consistent with previous playbook, confident in own workings.