Global gaming and legal sports betting colossus Flutter has reported full-year 2022 revenue of $9.1 billion, a formidable 27% year-over-year increase from 2021.
Group-wide EBITDA also rose by an identical 27% YoY as the company posted FY earnings of $1.09 billion in 2022.
Flutter's American sports betting subsidiary posted even more impressive results, as FanDuel saw revenue soar by 67% to $3.2 billion, a figure that came in at the top end of previous November guidance.
Correspondingly, FanDuel's 2022 EBITDA loss fell by 6% to $313 million, a welcome result compared to expected losses of between $300 million and $360 million.
Favorable results at the beginning of this year also saw Flutter confirm that its U.S. sportsbook "remain(s) on track to be EBITDA positive for the full year 2023," read the full-year earnings report.
"Flutter delivered a strong performance in 2022, continuing to execute on the strategic priorities we outlined," said Flutter CEO Peter Jackson on Thursday's investors call. "Growth in our recreational customer base delivered 2022 revenue growth of 27% and we ended the year with a record 12.1 million average monthly players in Q4."
Top of the mountain
FanDuel continued to consolidate its stranglehold on competition between U.S. online sports betting sites by growing its share of GGR from 42% at the end of Q3 to above 50% in Q4 in states where it is live.
The operator maintained its leadership position in 15 of 18 sports betting markets, a remarkable result given the intense competition for customers among the leading U.S. sportsbooks.
Flutter, the owner of iconic UK betting brands Betfair, PokerStars, and Paddy Power, also reported that FanDuel had enjoyed highly successful launches in Maryland and Ohio and is continuing to deliver solid growth across the U.S. in the early part of 2023.
"Leveraging our number one FanDuel brand we had a record Super Bowl and have acquired over 1.2m customers in 2023 so far," said Jackson.
He further declared that FanDuel now holds the "unparalleled number one position" in the U.S. online sports betting market while registering over three million new active monthly players during the fourth quarter of 2022.
Profitability inflection point
One of the key takeaways from the earnings call was the confirmation that FanDuel has reached the vaunted earnings inflection point and is now on track to achieve full-year profitability in 2023.
Flutter also pointed out during the earnings call that FanDuel was EBITDA positive in both Q2 and Q4, if one excludes the marketing costs related to launching in Maryland and Ohio.
“2023 is off to a pleasing start driven by positive momentum from the end of last year," said Jackson. "With our combined US business on track to deliver a positive EBITDA for the full year 2023 for the first time, the group is currently at an earnings' transformation point and we look forward to delivering future growth."
This is yet another indication of the maturation of the U.S. online sports betting market which will see all three of the top four operators — FanDuel, BetMGM, and Caesars — all achieve profitability in 2023.
The notable exception is DraftKings, which is on target to turn earnings positive in 2024 and has downplayed the significance of the milestone.
Core profit numbers
On the disappointing side, the Dublin-based Flutter reported that its yearly core profit (excluding its U.S. operation) grew by only 4% to $1.55 billion in 2022.
Adjusted overall group EBITDA rose to $1.26 billion, another poor result as compared to the average earnings estimate of $1.28 that industry analysts had expected. The earnings miss was largely due to what Flutter CEO Jackson described as "customer-friendly results" in the English Premier League and the FIFA World Cup that saw the company post wagering losses of $48 million in December.
"Whilst the World Cup final was a real spectacle to watch, and very entertaining, I was watching it through my fingers, because it was a very expensive event for us, with goal scoring and Argentina winning," said Jackson. "It was compounded when the Premier League came back and we saw a flurry of the favorites winning, so that cost us a lot of money at the back end of last year."
Shares of Flutter Entertainment Plc fell by 5.6% on Thursday, closing at 12,730.05 GBX. Nevertheless, Flutter is still trading 11.2% higher since the beginning of 2023.
