Flutter Entertainment (NYSE:FLUT) was drifting higher on Wednesday after the sports betting and iGaming company released strong Q4 earnings, a robust outlook, and launched a share repurchase plan.
Flutter, which owns FanDuel, generated $3.79 billion in revenue in the quarter, a 14% year over year jump. This came in slightly below estimates of $3.82 billion.
But earnings crushed estimates, as Flutter reported $152 million in net income, up from a $902 million net loss in the same quarter a year ago. Earnings were 45 cents per share, up 109% from a loss in Q4 a year ago. On an adjusted basis, earnings were $2.94 per share, up 67% year-over-year and better than estimates of $1.74 per share.
Flutter stock rose about 1% on the day to roughly $268 per share. It is up 3.5% year-to-date and 25% over the past 12 months.
Players gonna play
Flutter had 14.6 million average monthly players (AMP) in Q4, a 7% jump over the fourth quarter of 2023. For the full year, AMPs rose 13% to 13.9 million.
Its FanDuel property boasted a 43% market share in the U.S. in the quarter, while its iGaming business had a 26% market share. In both cases, they lead their respective markets.
Overall, revenue in the U.S. climbed 14% to $1.6 billion. The sportsbook revenue growth was 8% in the U.S., with a 12% increase in handle, or amount wagered. The revenue growth was hampered by adverse sports results, particularly in the NFL.
Growth was even stronger outside the U.S. In the UK and Ireland, revenue rose 17% to $963 million, while it surged 23% in international markets to $872 million. That more than offset an 8% decline in Australia to $346 million.
“FanDuel remains America’s number one sportsbook with its leading product maintaining a clear structural revenue margin advantage over competitors,” Flutter CEO Peter Jackson said. “At the same time, excellent execution secured a new number one spot for FanDuel Casino in iGaming.”
Robust outlook and buyback
Flutter improved its free cash flow by 175% in the quarter to $473 million, reflecting a significant expansion in its player base. That improved cash flow and strengthened balance sheet will help enable Flutter to buy back $1 billion in shares in 2025.
Flutter repurchased $121 million in shares in Q4 and expects to buy back $5 billion in shares over the next few years. Share repurchases often boost the share price, as they reduce the number of outstanding shares, thus driving up the existing share value.
For 2025, Flutter is guiding for 13% revenue growth and 34% adjusted EBITDA growth at the midpoints. Existing state revenue and adjusted EBITDA are anticipated to climb 33% and 176%, respectively, at the midpoints. However, new state and territory launches are projected to result in negative revenue of $40 million and an adjusted EBITDA cost of $90 million.
“We have had a great start to 2025, including record levels of customer engagement for the Super Bowl where FanDuel had 3 million active customers placing 17.7 million bets with $470 million wagered on the day,” Jackson said.
Flutter received a handful of price target upgrades, led by Oppenheimer, which bumped it up by $25 per share, and Wells Fargo, which raised its target by $15.
Overall it has a median price target of $319 per share, which represents a 19% increase over the stock price. With a reasonable valuation, Flutter stock is poised for growth in 2025 and is a stock to watch.
