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    FLUT
    Earnings call· Jun 2026(Q2 FY26)

    Flutter Entertainment Q2 FY26 earnings call FLUT

    Aug 5, 2026 Source

    Executive summary

    Flutter Q2 FY26 — Strategic Investment in US Growth & Cost Transformation

    Flutter delivered Q2 results ahead of expectations, buoyed by strong international performance and FIFA World Cup engagement, despite U.S. revenue headwinds. The company announced a strategic shift to increased investment in the U.S. to drive customer acquisition and ARPU, alongside a new phase of cost transformation targeting $500M in savings by 2029, aiming for long-term shareholder value. CEO Peter Jackson announced his departure, with Dan to take over at the end of September.

    Highlights

    5

    • Q2 performance was ahead of expectations with group revenue growth of 3%.

    • Phase 1 cost transformation is delivering ahead of expectations, on track to exceed $300M in savings by 2027.

    • A new Phase 2 cost transformation program was initiated, targeting an additional $500M in gross savings by 2029.

    • Market making is expected to generate approximately $50M in revenue this year.

    • International revenue grew 10%, driven by strong performance in Italy and Turkey, with Italy iGaming revenues up 34%.

    Concerns

    5

    • U.S. revenue was 6% lower year-over-year, reflecting a 6 percentage point growth impact from customer-friendly sports results.

    • Adjusted EBITDA declined 45% due to U.S. sports results, U.K. gaming taxes, and planned investments.

    • Net loss for the quarter was $296M, primarily driven by reduced segment profitability and $95M in one-off historical tax costs.

    • Full-year group revenue guidance was reduced by $395M to $17.91B at the midpoint.

    • Full-year adjusted EBITDA guidance was reduced by $210M to $2.655B at the midpoint.

    Guidance & targets

    14
    CategoryTargetConfidence
    Full-year Group Revenue
    $17.91B
    high materiality
    High
    Full-year Adjusted EBITDA
    $2.655B
    high materiality
    High
    Full-year Capital Expenditure
    $815M
    medium materiality
    High
    Full-year Depreciation and Amortization
    $730M
    medium materiality
    High
    Full-year Group Transaction, Restructuring and Integration Costs
    $500M
    medium materiality
    High
    Phase 1 Cost Savings
    in excess of $300M
    medium materiality
    High
    UK Gaming Tax Mitigation Savings
    $200M
    medium materiality
    High
    Phase 2 Cost Savings
    additional $500M
    high materiality
    High
    Market Making Revenue
    approximately $50M
    medium materiality
    High
    US Operating Cost Savings
    $45M
    low materiality
    High
    Target Leverage Ratio
    2 to 2.5x
    high materiality
    Medium
    International Revenue Growth Algorithm
    5% to 10%
    medium materiality
    Medium
    US iGaming Growth
    high teens
    medium materiality
    High
    New US iGaming State Legalizations
    1 new state
    low materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    U.S.
    Revenue was lower year-over-year, reflecting a significant impact from customer-friendly sports results. Underlying sportsbook trends were in line with expectations, and iGaming growth is expected to be in the high teens for the year.
    Growth impact from customer-friendly sports results: 6 percentage points
    		—-6%——
    International
    Revenue grew, including the benefit of Snai and Betnacional acquisitions. AMP growth was impacted by the closure of the India business last year.
    		—10%——
    Italy
    Delivered exceptional levels of growth across both Sportsbook and iGaming, with revenue performance outpacing the market. This was despite a short-term impact from the SEU migration, which recovered strongly in June.
    iGaming revenues: up 34%
    		————
    UKI
    SkyBet customers are adapting well to the new user interface, driving sequential improvement in performance. Overall iGaming growth remains robust despite the increase in UKI iGaming tax.
    iGaming growth: 7%
    		————
    Brazil
    Organic revenue declined year-over-year, in line with the market, due to challenging market conditions driven by government social economic measures. The company continues to enhance its Sportsbook and iGaming offerings.
    		—declining——

    Operational metrics

    27
    Group Revenue Growth
    3%
    Q2 FY26

    Group-wide revenue growth, ahead of expectations.

    Adjusted EBITDA Decline
    45%
    Q2 FY26

    Decline primarily due to adverse U.S. sports results, U.K. gaming taxes, and planned investments in prediction markets and World Cup marketing.

    Net Loss
    $296Mvs net income of $37M in Q2 2025
    Q2 FY26

    Primarily driven by reduction in segment profitability and one-off historical tax costs.

    Historical Tax Costs
    $95M
    Q2 FY26

    One-off historical tax costs related to India and U.S. sales and use tax exposures.

    Other Income Expense Improvement
    $81M
    Q2 FY26

    Improvement in other income and expense, partially offsetting net loss.

    Taxation Improvement
    $171M
    Q2 FY26

    Improvement in taxation, partially offsetting net loss.

    Loss Per Share
    $1.57
    Q2 FY26

    Reflecting profitability factors and noncontrolling interest benefit.

    Adjusted Loss Per Share
    $0.49
    Q2 FY26

    Reflecting profitability factors and noncontrolling interest benefit.

    Net Cash Provided by Operating Activities Increase
    $4M
    Q2 FY26

    Offsetting increased net loss by benefit of increased other current liabilities, including UK gaming tax increase, historical tax cost provisions, and positive swing in player deposit liabilities.

    Leverage Ratio
    4.3x
    end Q2 FY26

    Expected to reduce by end of 2026, with a medium-term target of 2 to 2.5x.

    US EBITDA
    roughly breakeven
    Q3 FY26

    Expected for Q3, reflecting generosity phasing, NFL schedule effects, and state launch costs.

    US EBITDA
    $500Mdown from $700M previous guidance
    Q4 FY26

    Expected for Q4, reflecting generosity phasing, NFL schedule effects, and state launch costs.

    NBA Finals Handle Growth
    40%YoY per game
    Q2 FY26

    Strong growth in handle during the NBA finals.

    NBA Finals Actives Growth
    25%YoY
    Q2 FY26

    Strong growth in active customers during the NBA finals.

    US Market Growth
    around 5%
    H1 FY26

    Estimated market growth, which continues to be subdued.

    US Market Growth Forecast
    broadly consistent with H1
    H2 FY26

    Prudent forecast for market growth in the second half.

    July Handle Growth
    31%
    July FY26

    Handle growth in July, which was better than June performance.

    World Cup Engaged Customers
    2.3M
    Q2 FY26

    Customers engaged with FanDuel throughout the FIFA World Cup, including reactivated customers.

    Loyalty Program Coverage
    70%
    Q2 FY26

    Expanded coverage of the loyalty program to customers this quarter, with 82% surveyed saying it improved their experience.

    Loyalty Program Coverage Target
    100%
    by NFL season start

    Expected coverage for all customers by the start of the NFL season.

    Prediction Market Cannibalization Impact
    low single-digit
    Q2 FY26

    Limited cannibalization impact from prediction markets on existing customer base in regulated sports book states.

    UK iGaming Tax Effective Date
    April
    FY26

    The increase in UKI iGaming tax became effective in April.

    North Carolina OSB Tax Rate
    22%
    recent

    North Carolina recently passed a tax increase for online sports betting.

    North Carolina Prediction Market Tax Rate
    6%
    recent

    North Carolina effectively added a tax for prediction markets.

    US Promo Spend as % of Handle (H2 last year)
    5.6%
    H2 FY25

    Promo spend as a proportion of handle in the second half of last year.

    US Promo Spend as % of Handle (H2 current year)
    closer to 6%
    H2 FY26

    Expected promo spend as a proportion of handle in the second half, an increase from last year.

    Incremental Promo Spend (H2)
    1.4%
    H2 FY26

    Additional investment in generosity for the second half, relative to last year's handle.

    Industry KPIs

    1
    MetricValueDetails
    Comparable sales comps-6%%

    Product announcements

    4
    ProductTypeDetails
    FanDuel Predicts One Applaunch
    BetProtectlaunch
    SuperSublaunch
    iGaming Content (Love Island, Automatix, Monopoly Live)launch

    Deals & partnerships

    2
    Crypto.comIntegration to expand sports offering for FanDuel Predicts

    All FanDuel Predicts sports and loyalty contracts will now be moved to Crypto.com, significantly enhancing the product proposition and enabling new products at pace ahead of the NFL season.

    CMEContinued access to financial markets for FanDuel Predicts

    FanDuel Predicts will continue to provide customers access to CME's extensive financial markets, while sports contracts move to Crypto.com.

    Risks & headwinds

    7
    Customer-friendly sports resultsQ2 FY26

    6 percentage point growth impact on U.S. revenue in Q2

    Subdued U.S. market growthH1 and H2 FY26

    around 5% in H1, expected to be consistent in H2

    Mitigation: Proactive investment in customer generosity and value proposition to drive AMPs and ARPU; enhanced product offerings and marketing campaigns.

    U.K. iGaming tax increaseQ2 FY26 onwards

    Effective in April

    Mitigation: First order cost savings; adapting approach to focus on headcount savings over marketing; anticipating competitors pulling back.

    Challenging market conditions in BrazilQ2 FY26

    Organic revenue declined year-over-year, in line with the market

    Mitigation: Continued enhancement of Sportsbook product offering with further rollouts and improved iGaming generosity mechanics in H2.

    NFL season start delayFY26

    $75M revenue and $50M adjusted EBITDA impact

    Mitigation: Updated full-year guidance to reflect the impact; no change in investment posture, leaning into college football and NFL season start.

    Historical tax costsQ2 FY26

    $95M one-off

    Regulatory complexities for prediction marketsongoing

    North Carolina passed 6% tax for prediction markets

    Mitigation: Monitoring implications, focusing on new state openings for sports betting and iGaming.

    What to watch in Q3 FY26

    5

    US Sportsbook Momentum & Investment ROI

    next quarter and into 2027
    CurrentStrong momentum, NBA handle up 40% YoY, actives up 25% YoY, World Cup engaged 2.3M customers
    TargetContinued strong customer engagement, ARPU growth, and market share gains in 2027

    Why it matters

    The company is making a proactive investment in the U.S. to accelerate FanDuel's Sportsbook momentum, and verifying the ROI of this investment is crucial for future growth and profitability.

    This momentum and the current market dynamics mean now is the right time to move from a focus on margin growth to prioritizing AMPs and growing ARPU. This will position us well to extend our leadership in the U.S. market and capture further share in 2027.

    Q&A highlights

    8

    Can you detail the components of the $270M EBITDA investment in the U.S., particularly promo spend and marketing ROI? Also, why prioritize U.S. investment over potentially more deserving international markets?

    The investment is deliberate generosity, driven by strong momentum in FanDuel's Sportsbook improvement plan and excellent marketing returns. It's a proactive decision to lean into the U.S. opportunity for long-term growth. Investment is also made in international markets like Italy, Turkey, and CEE, where good returns are seen.

    “This is a proactive decision that we're making around the longer-term U.S. opportunity. We're really seeing an opportunity to lean in at the moment, and it's working well. We intend to continue that in H2 and exit 2026 with the strongest business possible.”

    asked by Edward Young · answered by Rob Coldrake

    2 min read6 chapters

    Detailed Narrative

    01

    CEO Transition and Long-Term Strategic Vision

    Peter Jackson announced his departure as CEO at the end of September after nearly nine years, expressing confidence in Flutter's future and his successor, Dan. He emphasized a long-term view of value creation, citing past investments in FanDuel that strengthened competitive position. The company continues this approach by investing behind U.S. sports betting and iGaming leadership, acknowledging potential near-term earnings impact for maximized long-term shareholder value.

    02

    U.S. Strategic Investment and Market Dynamics

    Flutter is making a proactive investment in the U.S. to strengthen its value proposition and accelerate FanDuel's Sportsbook momentum. This shift prioritizes AMPs and ARPU growth over immediate margin expansion, aiming to extend leadership and capture market share in 2027. Despite a subdued U.S. market growth of around 5% in H1, underlying sportsbook trends are encouraging, with strong engagement during marquee events like the NBA Finals and FIFA World Cup.

    03

    Prediction Markets Expansion and Innovation

    Flutter views prediction markets as an attractive, incremental opportunity to grow the overall market and acquire customers ahead of sports betting regulation. The company is gaining traction with FanDuel Predicts, expecting to generate approximately $50M in revenue from market making this year. Integration with Crypto.com exchange and the upcoming 'One App' offering are set to significantly enhance the product catalog and leverage FanDuel's brand equity for accelerated penetration and marketing efficiencies.

    04

    International Performance and Regional Insights

    International revenue grew 10% in Q2, benefiting from M&A and strong World Cup engagement. Italy delivered exceptional growth in both Sportsbook and iGaming, with iGaming revenues up 34%, outpacing the market. The UKI saw sequential improvement in SkyBet performance and robust 7% iGaming growth despite new taxes. Brazil faced challenging market conditions, leading to organic revenue decline, but remains a long-term opportunity. APAC and CEE performed broadly in line with expectations, with CEE gaining market share.

    05

    Cost Transformation and Efficiency Programs

    Phase 1 of Flutter's cost transformation program is ahead of expectations, on track to deliver over $300M in savings by 2027, plus $200M from UK gaming tax mitigation. Building on this, Phase 2 was announced, targeting an additional $500M in gross savings by 2029. This program aims to reshape the cost base, remove duplication, leverage technology and AI, and protect profitability while funding revenue-generating initiatives, driving meaningful improvement in cash generation.

    06

    Q2 Financials and Outlook Adjustments

    Q2 performance was ahead of expectations, but adjusted EBITDA declined 45% due to adverse U.S. sports results, UK gaming taxes, and investments. The company reported a net loss of $296M. Full-year guidance was updated, reducing group revenue to $17.91B and adjusted EBITDA to $2.655B at the midpoint, reflecting the NFL season delay impact and increased U.S. investment. Capital expenditure guidance was improved to $815M, and restructuring costs increased to $500M.

    AI-generated summary of the company’s earnings call. Not investment advice.