Flutter CFO: North Carolina “won” by continued investment

Paul Edgecliffe-Johnson, CFO of Flutter, remarked that the company “won” North Carolina – where FanDuel launched in Q1 – despite the admitted negative influence on costs.

Edgecliffe-Johnson made the comment during the earnings call for Flutter’s Q1 results, which were released today (14 May).

Revenue was up 16.4% year-on-year to $3.40bn (£2.70bn/€3.14bn) in Q1, although Flutter suffered a significant net loss of $375m. This loss was attributed to increased expenses and negative foreign currency translation. Flutter’s FanDuel brand performed particularly well in the first quarter of the year, reaching a record igaming gross gaming revenue (GGR) share of 27%.

The earnings call saw both Edgecliffe-Johnson and Peter Jackson, Flutter’s CEO, field questions regarding the cost of sales, which jumped 16.4% to $1.79bn. Edgecliffe-Johnson linked the increased cost to an investment in North Carolina, where FanDuel launched in March.

Nonetheless, he said the risen cost of sales was “in line with what we were expecting”.

“We’ve won the state, we’ve signed up one in 20 adults, but obviously it comes with a cost,” he noted. “Where there’s more business, that’s where you have the most promotional intensity.” Edgecliffe-Johnson added that promotional spend levels were in line with levels recorded in 2023.

FanDuel also launched in Vermont in January.

Listing “key milestone” for Flutter

Flutter’s US performance was a highlight during the call, with Jackson stating that FanDuel “is a clear number one in the market”.

Jackson noted that North Carolina had quickly become “one of our most successful state launches”. He attributed the success here, and in other newly-launched US states, to FanDuel’s established customer base.

“With each new state launch, we find that we become even better in defining our playbook for the market,” said Jackson. “The brand and the product are becoming better known to customers in states where we launch.”

In spite of the significant net loss, Jackson was generally upbeat about the quarter. He lauded the relocation of Flutter’s primary listing from London to the New York Stock Exchange, calling it a “key milestone” in the evolution of the business. Jackson also emphasised that the move would not substantially affect costs.

“There’s going to be no significant change from a cost perspective,” he stressed. “We’re going to have our board meetings there and we’re going to be spending more time there from this week… In practical terms its not going to change much from a cost perspective.”

FY outlook steady in face of faltering March sports results

Outside of the US, Jackson pointed to Sisal’s positive performance during the quarter, which saw its average monthly players (AMPs) grow 22.0% yearly in March. He noted that Sisal “continues engaging customers” and also highlighted growth in Georgia and Spain.

Looking to the remainder of the year, Jackson outlined a clear focus on market leadership for Flutter.

“From an igaming perspective, we’re always confident that 2024 is the year we are trying to take market leadership,” he explained. “It’s important to recognise that we got ahead by acquiring businesses in the casino space.”

Edgecliffe-Johnson said Flutter is maintaining its previous guidance for its FY24 outlook, in spite of disappointing sports results in the final weeks of March. This current guidance would see projected midpoints of $6.00bn in revenue for the US and $7.85bn outside the US.

“We’re very pleased with the market share across the US as a whole,” he affirmed. “We have held our guidance.”