FanDuel Parent Stock Surges On Q3 Results

Flutter, the parent company of FanDuel, brought positive news to investors during its Q3 earnings call Tuesday. 

The company reported 27% yearly revenue growth, announcing $3.25 billion in quarterly revenue. Adjusted EBITDA grew 74% to $450 million.

The news comes amid a quarter that included a five-week stretch of industry sports betting losses, further showing FanDuel’s strength. 

After the earnings call, Flutter’s New York-listed stock (FLUT) reached a new high, closing Wednesday at $265.52.

Flutter encouraged by FanDuel’s growth

Flutter CEO Peter Jackson said in his opening statement, “It is clear that the business is very well positioned for future growth.”

FanDuel’s revenue totaled $1.25 billion in Q3, up 51% year over year. It reported $58 million in adjusted EBITDA, a $113 million swing from last year’s $55 million loss.

The average monthly players grew by 16% in Q3, and handle increased by 36%. Handle grew by 23% in states that launched before 2022 and 37% in states that launched in 2022 and 2023.

The group maintained a focus on customer acquisition, which grew by 10% year over year, including 6% growth in pre-2022 markets. Payback periods remained at around 18 months, better than Flutter’s target of 24 months.

Jackson attributed FanDuel’s success to product innovation. The company expanded its improved product before the NFL season, creating more immersive live experiences by expanding The Pulse to all NFL games and increasing its live player prop offerings. 

Online casino at FanDuel had even greater success, with average monthly players growing by 43%. 

Parlays curb FanDuel’s profits, yet show long-term promise

Jackson also called attention to FanDuel’s pricing accuracy with parlays, which is crucial given their volatility.

Customers have received these improvements well, too. Same-game parlay live handle nearly doubled in the first month of the NFL season, and parlay penetration was up 7 percentage points.

That said, bettors experienced favorable parlay results to start the fourth quarter. The outcome resulted in Flutter lowering its adjusted EBITDA guidance by 4% at the midpoint to $710 million.

However, the long-term prospects of parlays are undeniable, and the guidance adjustments were only a result of customers winning. FanDuel CFO Rob Coldrake told investors that aside from these results, the company planned to increase its guidance for 2024.

Same-game parlays fuel international growth

Flutter’s international prowess grew in Q3, too. Its average monthly players increased by 13%, resulting in 15% revenue growth and 24% EBITDA growth across all segments.

Its UK sportsbooks had 142% growth in same-game soccer parlays, while the UK iGaming sector has grown 29%. Flutter also acquired Global Games, the UK’s third-largest games provider, to expand its iGaming portfolio.

Same-game parlays also helped Sisal increase its market share in Italy by 2 percentage points, accounting for nearly one-quarter of the sportsbook’s handle in the first six rounds of the Italian soccer season. It was the first Italian operator to offer the product.

Lastly, Flutter’s Australian market continues to grow. Its average monthly player number was 6% ahead of projections and growing in the sports betting and racing verticals.