DAVY VIEW

Flutter Entertainment has released an update highlighting that very adverse sports results in November and December impacted revenue by $390m and aEBITDA by $260m. Post mitigation, US aEBITDA is estimated to be $205m lower than its previous guidance (from $710m to $505m). The 2024/2025 NFL season to date has been the most customer friendly since the launch of online sports betting with the highest rate of favourites winning in nearly 20 years. Flutter also flagged that group ex-US revenue and aEBITDA will be +1% and +2% higher respectively than prior guidance mid-points; this infers a c.6-7% downgrade to full year group aEBITDA. Swings in sporting results are a fact of life in the gambling sector and results will revert to the norm. Despite incurring exceptionally negative sporting results in Q424, at a group level Flutter's FY24 aEBITDA is only c.3% below the initial guidance issued in March 2024. This highlights the benefits of global diversification and good underlying momentum across the group during the year. The statement clearly notes that the transitory nature of these results has no impact on the underlying assumptions and guidance communicated at the Investor Day. Furthermore, it remains confident in its growth drivers and long-term growth trajectory. Investors should therefore quickly look through the short-term sports results headwind. We will not make any changes to our FY25-FY27 forecasts on the back of this update.