Flutter Entertainment Reports Q2 2026 Results: Full Earnings Call Transcript

Flutter Entertainment (NYSE: FLUT ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Flutter Entertainment reported a Q2 revenue growth of 3%, driven by M&A benefits and World Cup engagement, but faced a 45% decline in adjusted EBITDA due to increased UK gaming taxes and investments. The company is investing heavily in US sports betting and iGaming, with plans to enhance its value proposition and customer engagement, despite a short-term impact on profitability. Flutter's international operations saw positive growth, with revenue up 10% in Italy and improved performance in the UK&I and Turkey, despite challenges in Brazil.

A new leadership structure has been implemented in the US, aiming to bolster the company's competitive position and market share, with a focus on a customer-first strategy. The next phase of Flutter's cost transformation is expected to deliver $500 million in savings by 2029, leveraging global scale and technology efficiencies to fund growth initiatives. Full Transcript Greg, Operator Thank you for standing by. My name is Greg and I will be your conference operator today.

At this time, I would like to welcome everyone to today's Flutter Entertainment Q2 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you. I would now like to turn the call over to Paul Timms, Group Director of Investor Relations.

Paul Timms, Group Director of Investor Relations Hi everyone and welcome to Flutter's Q2 update call. With me today are Flutter's CEO Peter Jackson and CFO Rob Coldrake. After this short intro, Peter will open with a summary of our operational progress and then Rob will go through our Q2 financials and our updated guidance for 2026. We will then open the lines for Q&A.

Some of the information we are providing today, including our 2026 guidance, constitutes forward-looking statements that involve risks, uncertainties and other factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors are detailed in our earnings press release and our SEC filing. In addition, all forward-looking statements are based on current expectations and we undertake no obligation to update any forward-looking statement except as required by law. Also, in our remarks or responses to questions, we will discuss non-GAAP financial measures.

Reconciliations are included in the results materials we have released today available in the Investors section of our website. I will now hand you over to Peter. Peter Jackson, Group CEO Thank you, Paul. Good morning everyone and thank you for joining us.

Before we get into the results, I wanted to say a few words about the announcement we made this morning. After nearly nine years as CEO, this is the right time to hand over to Dan and I'll be stepping down at the end of September. It's been an enormous privilege to lead this business and I do so with tremendous confidence in Flutter's future, in the team we've built and in Dan's leadership. One thing I've always tried to do throughout my time as CEO is to take a long-term view of how we create value for shareholders.

That has sometimes meant making decisions that weren't universally welcomed in the moment because we believe they would strengthen the business over the long term. In 2019 and 2020, for example, we continued to invest heavily in FanDuel at a time when many questioned those decisions because of the impact on near-term earnings. Looking back, those investments proved to be the right thing to do. They strengthened our competitive position and laid the foundations for the business we have today, and we're making the same type of decision again today.

We see a significant opportunity to invest behind our leadership in US sports betting and iGaming, strengthening our proposition and positioning the business for future growth. We recognise that this weighs on near-term earnings, but we're convinced it's the right thing to do to maximise long-term shareholder value. With that, let me turn to our results. We've delivered an encouraging quarter relative to our expectations and I'm pleased with the progress we're making across the business.

In the US we've implemented our new leadership structure, made good progress on our sportsbook improvement plan and further expanded our prediction market offering and capabilities. For H2 we'll be delivering an improved value proposition for our customers, a move we believe is critical to strengthening our number one position in the highly competitive US market, aligns with our new customer-first strategy and better positions the business for market share gains in 2027 and beyond.

During Q2, US revenue was 6% lower year over year, reflecting a 6 percentage point growth impact from customer-friendly sports results as the next legendary win in June put some cash back in our customers' wallets in time for the World Cup. Customer engagement was excellent throughout the NBA Finals and the FIFA World Cup and even when you adjust for these marquee events underlying sportsbook trends were in line with our expectations.

As our sportsbook improvement plan continues to deliver, we continue to see a limited cannibalisation impact from prediction markets on our existing customer base in regulated sportsbook states, and we believe FanDuel's operational execution and outperformance both in recent state launches and during key marquee events confirms the strong demand for traditional sports betting products when sports content is compelling. We expanded our loyalty program to 70% of customers this quarter which has helped with engagement metrics, with 82% of customers surveyed saying the rewards club improves their experience and more than half saying it lifts their betting activity.

We also introduced Bet Protect Plus, our best-in-market injury protection feature, and enhanced our soccer offering for the World Cup, leveraging the Flutter Edge to offer unique features such as Super Sub. And while FanDuel trends have been encouraging, the market continues to be subdued and we estimate that the market grew by around 5% in H1. Although we continue to closely monitor the implications of the growth in prediction markets on the broader online sports betting market, we believe the market is yet to rebound from the disappointing NFL performance experienced in Q4 2025.

We firmly believe market growth will ultimately return to higher levels with more compelling content driving stronger customer engagement. Therefore our forecasts prudently assume market growth rates in H2 will be broadly consistent with those seen in the first half. The US leadership changes we recently implemented are working and we are well positioned to deliver improved performance through a more competitive, customer-led proposition. In fact, the encouraging underlying signs we're seeing give us the confidence to increase generosity to customers and improve our value proposition.

While this proactive action will result in a reduction in near-term profitability, investing behind customer momentum is an approach that has consistently served us well. This momentum and the current market dynamics mean now is the right time to move from a focus on margin growth to prioritizing AMPs and growing ARPU. This will position us well to extend our leadership in the US market and capture further share in 2027.

Turning now to prediction markets, we view prediction markets as an attractive opportunity and while we are closely monitoring their impact on the broader online sports betting market, we continue to see prediction markets as incremental to sports betting and iGaming, growing the overall market by capturing new demand. Our own prediction market offering, FanDuel Predicts, allows us to acquire customers ahead of sports betting regulation in new states while delivering incremental economics. In the meantime, and while operational progress in H1 was slower than planned, we are gaining traction and have a clear roadmap for improvement.

com while continuing to provide our customers access to CME's extensive financial markets. This new exchange arrangement will ensure we can deliver new products at pace ahead of the NFL season start. Our one app offering is also enabling us to leverage FanDuel's nationwide brand equity, driving both accelerated penetration and marketing efficiencies. We believe we are also uniquely positioned to provide liquidity for combination markets across different prediction market platforms with a market-making offering that can scale rapidly and at low incremental investment.

It is very early days, but we already expect to generate approximately $50 million of revenue from market making this year, demonstrating both the good progress made so far and the potential opportunity. Turning now to International, we've made good progress in the quarter. We strengthened our market-leading position in Italy and leveraged the power of the Flutter Edge to drive record engagement during the World Cup. As a result, revenue grew 10% including the benefit of our SNAI and Betnacional acquisitions.

AMP growth in the quarter was impacted by the closure of our India business last year. Italy continues to deliver exceptional levels of growth across both sportsbook and iGaming and our revenue performance continues to outpace the market as we extend our market leadership. This was despite the short-term impact from the SNY migration which we successfully completed back in April. As expected, the migration resulted in a brief period of share loss, but performance recovered strongly in June as customers embraced a significantly expanded product offering with AMPs increasing 30% in June and strong parlay penetration during the World Cup.

SNAI gaming revenues were up 34% driven by new and exclusive content in Italy and an expanded product offer in Turkey. The post-migration recovery in SNAI and the strength of our first half performance in both Italy and Turkey give us confidence in sustaining this strong growth in the second half. In the UK&I, Sky Bet customers are adapting well to the new highly rated user interface, driving a sequential improvement in Sky Bet performance while overall iGaming growth in the UK&I remains robust at 7%. The increase in UK iGaming tax became effective in April.

As a leading operator in the market, we are confident in the delivery of our first-order cost savings and in our ability to gain share as other operators begin to react to this increase. In Brazil, good operational progress including the integration of Flutter's product and pricing capabilities into our local platform was offset by more challenging market conditions driven by government socioeconomic measures. This resulted in Flutter Brazil organic revenue declining year over year in line with the market.

We will continue to enhance our sportsbook product offering with further product rollouts enabled by the integration of and improved iGaming generosity mechanics in the second half of the year. Brazil remains an attractive long-term opportunity and we are focused on building a market-leading platform that scales our customer base and delivers strong returns. Our performance in APAC was broadly in line with expectations with positive performance in key sports offsetting continued softness in racing, and while excellent execution in CEE saw us gain market share in all of our main markets.

And finally, we've also announced today that we've initiated the next phase of Flutter's cost transformation, reshaping our cost base to fund our next stage of growth. Rob will cover this in more detail shortly. To close, I'm encouraged by the progress we've made in Q2. In the US we're delivering continued sequential improvement in key sportsbook metrics alongside sustained iGaming growth.

The new US leadership team is driving a renewed customer-first approach and our proactive investment will help place us in the best possible position for growth in 2027. Within International we are executing at pace and Flutter Edge-enabled product improvements are driving our momentum in the second half. I'm confident that the choices we're making today, from investing in the US to expanding our TAM with FanDuel Predicts and market making, strengthening our international businesses and advancing the next phase of cost transformation, will deliver sustainable long-term value for our shareholders. And with that I'll hand over to Rob.

Rob Coldrake, Group Chief Financial Officer Thanks, Peter, and good morning, everyone. S. and International. S.

sports results year over year. The increase in UK gaming taxes, planned investments in both prediction markets and World Cup marketing resulted in adjusted EBITDA declining 45%. A net loss of $296 million for the quarter versus a net income of $37 million in Q2 2025 was primarily driven by the reduction in segment profitability and one-off historical tax costs of $95 million. These were partially offset by an improvement of $81 million and $171 million in other income/expense and taxation, respectively.

49, respectively. Reflecting these profitability factors and a non-controlling interest benefit, net cash provided by operating activities increased by $4 million, with the increased net loss in the quarter offset by the benefit of an increase in other current liabilities including the impact of the UK gaming tax increase, historical tax cost provisions, and a positive swing in player deposit liabilities. As a result, free cash flow, including financing capex and excluding player funds, reduced by 56% year over year. 3x.

We expect our second half cash generation will drive a reduction in leverage by the end of 2026. We continue to prioritize organic investment in our core business and strategic initiatives, including emerging opportunities such as prediction markets, while also maintaining a clear focus on deleveraging the balance sheet. 5x in the medium term, consistent with our stated policy, with exact timing dependent on the cadence of our strategic investments. Moving now to our Group-Wide Cost Transformation Program, Phase one of our program is delivering ahead of expectations.

We are on track to deliver in excess of the previously guided $300 million of savings by 2027 and $200 million of additional cost savings that were announced as part of our UK gaming tax mitigation plans, also expected to be delivered in 2027. Building on this significant progress, we have initiated the next phase of Flutter's cost transformation. Phase two reflects a broader program to reshape our cost base, build a more efficient, resilient cost structure for the long term, and protect profitability through removing duplication, delivering technology efficiencies, and leveraging AI.

This cost action will reflect an evolution in how Flutter operates, leveraging our global scale while still maintaining a fundamental local focus on the customer. S. We believe that this will ensure the business is well positioned for its next stage of growth. In International, we expect that the benefits will underpin our 5% to 10% revenue growth algorithm by both protecting adjusted EBITDA margins in more mature markets and enabling investment in growth areas.

These actions are also expected to drive a meaningful improvement in cash generation. Our plans are progressing well, and we will be in a position to share more details at our Q3 results in November. Moving now to our 2026 outlook, early Q3 trading was ahead of expectations, reflecting good engagement in the knockout stages of the FIFA World Cup and slightly favorable sports results. S.

; the impact of confirmed one-week delay to the 2026—2027 NFL season start not previously captured in guidance of $75 million revenue and $50 million adjusted EBITDA; investment to strengthen our proposition and accelerate FanDuel Sports momentum as Peter outlined earlier; and forward FX rates in International. 655 billion at the midpoint.