Quarterly miss prompts lower annual forecast
For the three months ended September, Flutter reported revenue of $3.87 billion, up 2% from a year earlier but below the $3.98 billion consensus estimate. Adjusted EBITDA dropped 25% to $360 million, compared with analysts' forecast of $417 million. The results missed consensus by 3% and 14%, respectively.
Jefferies said the international business accounted for most of the shortfall; US results were broadly consistent with expectations.
Unfavorable sports results and the closure of Flutter's Brazilian operation led the company to reduce the midpoint of its 2026 revenue forecast by 2% and its EBITDA forecast by 6%. It now projects annual revenue of $17.61 billion, up 7% from 2025, and EBITDA of $2.50 billion, a 12% decline. Those revised figures are 1% and 3% below consensus, respectively.
Jefferies points to valuation and regulatory developments
Flutter offered no guidance for 2027. Jefferies nevertheless sees potential upside, estimating that the company trades at an enterprise value of 8.5 times projected 2027 EBITDA. In the broker's view, that multiple gives insufficient credit to Flutter's market leadership and execution in the US.
The broker also identified possible benefits for regulated online sports betting from a prospective political shift in Texas and mounting legal challenges to prediction markets, including in Utah.
Utah has brought criminal charges against Kalshi and its co-founders, CEO Tarek Mansour and COO Luana Lopes Lara. They include 13 counts alleging violations of the state's gambling prohibition and another charge involving profits from illegal activity. The Associated Press reported that prediction-market litigation has reached roughly 20 states, while the Commodity Futures Trading Commission has sued at least 10 states to prevent state regulation.
US player growth accompanies investment spending
Flutter's US online sports betting business recorded 4% growth in third-quarter net gaming revenue. Betting handle increased 13%, and average monthly players rose 9%. The structural margin held at 12.9%, but promotions absorbed 6% of handle, compared with 5.4% a year earlier. In iGaming, a 24% increase in average monthly players supported net gaming revenue growth of 8%.
The company's earnings release reported US segment adjusted EBITDA of $3 million, down 94% year over year, following investment in its prediction-market offering and the Alberta launch. FanDuel entered Alberta in July 2026 and achieved a 23% share of gross gaming revenue during the quarter, a performance Flutter said surpassed its earlier Ontario launch.
FanDuel Predicts averaged 66,000 monthly players in the quarter. Volume reached $119 million, increasing 102% from the previous quarter. Flutter attributed October volume growth of 271% compared with July to its accelerated product roadmap.
For the full year, Flutter lowered its US revenue forecast by 1% to $7.34 billion and its EBITDA forecast by 6% to $715 million. Jefferies said the entire EBITDA reduction reflected a $45 million impact from unfavorable sports results. The broker calculates that the revised outlook implies fourth-quarter US net gaming revenue growth of 14%, with 55% EBITDA drop-through.
Brazil closure and UK taxes weigh on international operations
Revenue trends varied across Flutter's international markets. The UK and Ireland grew 4%, Southeast Asia rose 13%, and Central and Eastern Europe gained 10%. Australia and the Asia-Pacific region declined 4%. Brazil's revenue fell 31% amid regulatory changes and the operation's shutdown, while other international markets recorded a 48% decline.
Flutter ceased operating in Brazil on September 26, 2026, a day after a Provisional Measure was issued that provisionally banned sports betting and iGaming. The company recorded $873 million in non-cash impairment charges related to Brazil. Of that amount, $537 million was attributable to Flutter, reflecting its 56% ownership of Flutter Brazil. The charge contributed to a 46% widening of the group's third-quarter net loss to $1.148 billion.
Higher UK remote gaming duty was the primary driver of a 280-basis-point decline in the international adjusted EBITDA margin to 18.0%. The duty increased from 21% to 40%. In response to the tax rise, Flutter announced plans to eliminate up to 1,400 jobs across its UK and Ireland operations.
Flutter reduced its full-year international revenue forecast by 2% to $10.27 billion and its EBITDA forecast by 5% to $2.09 billion. The revision includes a $115 million impact from unfavorable sports results and a $20 million impact from the Brazil closure, partially offset by $20 million in cost mitigation.
Taylor pauses buybacks and sets savings plan
Dan Taylor, who became CEO in October 2026, has four stated priorities: strengthening Flutter's US leadership, pursuing the prediction-market opportunity, getting more value from the international portfolio and simplifying operations.
Under Taylor, Flutter has suspended its existing share repurchase program for the foreseeable future, prioritizing organic investment and debt reduction. Its leverage ratio reached 4.6 times at the end of the third quarter, compared with 3.7 times on December 31, 2025. The company retains a medium-term target range of 2.0 to 2.5 times. Taylor said he was confident Flutter could reduce leverage over the next 12 to 18 months.
Flutter also expects an additional $500 million in gross operating cost and capital expenditure savings by 2029. Its plan calls for using AI, eliminating organizational layers and duplicate work, and simplifying its technology infrastructure.
