Major gambling company, Flutter, owned by Paddy Power, breaks its six-month losing trend in the US market.
In a significant development, gambling giant Flutter has announced an upgrade to its annual profit guidance for the year 2025. This decision comes on the back of robust revenue growth and operational efficiency, as the company continues to expand its footprint, particularly in the US market.
Flutter's UK and Ireland division showed impressive double-digit growth, despite implementing slots restrictions in line with the UK Gambling Act Review requirements. The company's primary listing moved to the US in May 2024, and shares in this sector are at the higher end of the risk spectrum.
The profit upgrade in Q2 2025 was primarily due to robust revenue growth of 16% and a 25% increase in adjusted EBITDA. These figures were driven largely by strong expansion in the US market, higher average monthly active players (up by 11% year-over-year to nearly 16 million), and strategic acquisitions including Snai and NSX that contributed significant growth in sportsbook handle and revenue.
As a result, Flutter's revenue rose to about $4.19 billion, and adjusted EBITDA reached $919 million. This impressive growth was reflected in an improved margin of 21.9%. Growth in sportsbook revenue (+4%) and handle (+7%) also supported the strong operating performance, offsetting challenges such as a tough comparative period in 2024 with the Euros event.
Despite a sharp decline in net income due to non-cash charges and higher costs, the strong underlying earnings and cash flow metrics enabled Flutter to upgrade its full-year profit outlook. The company's group-wide profit forecast has been increased to $3.3 billion from $3.18 billion in May.
The acquisition of FanDuel has led the US market to become responsible for 43% of Flutter's annual revenues. More than two-thirds of revenue growth in Flutter's international division was attributed to recently completed acquisitions in Italy and Brazil.
Flutter is scaling up at pace across its geographies, providing many benefits through diversification. However, it's important to note that increased regulation in many of Flutter's markets is a potential issue. Betting companies are often targeted by governments aiming to raise additional income through taxes.
In the second quarter, FanDuel, a brand owned by Flutter, saw its core profit jump 54% to $400 million. Shares in Flutter were down 4% to 22,000p in early trading, but have added around 50% over the last 12 months, showing no signs of slowing after the move to the US.
In summary, the profit upgrade was underpinned by expansion and leadership in the US market, contributions from recent acquisitions (Snai and NSX), increased player engagement and activity, significant growth in sportsbook revenue and handle, and operational efficiency reflected in improved EBITDA margin. Flutter continues to navigate the complex landscape of the gambling industry with strategic acquisitions and a focus on operational efficiency.
- Flutter, in the midst of its rapid global expansion, is not immune to the financial implications of government regulations, as betting companies often face increased taxes due to their targeting by governments seeking additional revenue.
- To bolster its investments and finance future growth, Flutter has diversified its business portfolio through strategic acquisitions such as Snai and NSX, venturing into the technology sector to expand its presence in markets like Italy and Brazil.
- As Flutter delves deeper into the US market and continues its casino-and-gambling ventures, especially with the acquisition of FanDuel, it faces high risk, with shares in this sector generally placing at the higher end of the risk spectrum.
