Flutter's strategic betting on prediction markets amid mixed quarterly results

Flutter Entertainment reports a strong revenue increase of 25% in Q4, while balancing strategic investments in prediction markets and international expansion with mixed profitability and near-term ...

Flutter Entertainment reported fourth-quarter results that mixed robust top-line growth with softer profitability metrics. The company posted revenue of $4.74 billion for the quarter, an increase of roughly 25% year-on-year, while reported earnings per share came in at $1.74. According to MarketBeat, that EPS figure sat below some street estimates though other industry tallies recorded a modest upside to consensus after adjusting for non-recurring items. Sources indicate adjusted EBITDA expanded meaningfully, highlighting continued scale in the group’s operations.

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Flutter’s management framed the quarter as one of strong underlying momentum but with clear operational headwinds in the US. During the earnings call CEO Peter Jackson underlined growth in group revenue and adjusted EBITDA while acknowledging churn and market-share pressure in FanDuel following exceptionally high NFL gross margins late in the quarter, which the company said led to adverse recycling and mis-timed promotional generosity. According to the call transcript and post‑earnings commentary, FanDuel Predicts was launched in Q4 and has prompted the business to increase investment in prediction markets to accelerate customer acquisition and market-making outside regulated states. - Paragraph 2: [3], [4]

Management signalled a deliberate shift in spend to capture longer-term customer value from prediction markets, guiding prediction-markets investment toward the upper end of the previously communicated range and nearer to $300 million. The company characterised the commitment as strategic, intended to drive acquisition in non-regulated jurisdictions and to build scale in a nascent product category where early signals have been encouraging. Analysts on the call framed the move as part of a broader trade-off between near-term margins and market share capture. - Paragraph 3: [5], [3]

Profitability and cash-generation were mixed. Reported net income and free cash flow declined versus the prior year, weighed by higher interest, tax charges and increased M&A and capital expenditure. At the same time Flutter completed $1 billion of share buybacks in 2025 and announced plans to return roughly $250 million to shareholders in the first half of 2026, while targeting medium-term leverage of about 2.0–2.5x. Management also reaffirmed a cost‑savings programme aimed at delivering roughly $300 million of run‑rate savings by 2027 through platform migrations and efficiency initiatives. - Paragraph 4: [5], [2]

Geographic expansion and selective acquisitions continue to be a central plank of the group’s growth story. International revenue growth was strong in the quarter, supported by the integration of PokerStars in Italy and fresh investment in Brazil where customer acquisition has accelerated ahead of the 2026 FIFA World Cup. Industry reporting highlights double‑digit revenue increases across key markets and materially higher adjusted EBITDA in the US segment year‑on‑year. - Paragraph 5: [4], [6]

Market reaction was measured. Shares moved intraday following the results as analysts digested the mix of vigorous revenue trends, elevated investment plans and near‑term margin pressure. Broker notes this month have ranged from cautious to constructive, with multiple houses maintaining buy or hold assessments while several adjusting price targets to reflect both the longer‑term opportunity and the nearer‑term operational trade-offs. Institutional filings show a variety of portfolio adjustments by funds in recent quarters. - Paragraph 6: [5], [1]

Source: Noah Wire Services