Flutter Entertainment (NYSE:FLUT) reported second-quarter revenue growth of 3% as strong customer engagement around the FIFA World Cup and acquisitions helped offset customer-friendly U.S. sports results and higher taxes in the United Kingdom.
The company also announced that Chief Executive Officer Peter Jackson will step down at the end of September after nearly nine years in the role. Jackson said Dan, whom he identified only by first name during the call, will take over as CEO on Oct. 1. Jackson said the incoming leader has been closely involved in the company’s strategy and execution.
Profitability Declines Amid Investment and Tax Costs
Chief Financial Officer Rob Coldrake said adjusted EBITDA declined 45% during the quarter, reflecting the U.K. gaming-tax increase as well as planned investment in prediction markets and World Cup marketing. Flutter posted a net loss of $296 million, compared with net income of $37 million in the second quarter of 2025.
Coldrake said the loss was driven mainly by lower segment profitability and $95 million of one-off historical tax costs. Loss per share was $1.57, while adjusted loss per share was $0.49.
Free cash flow, including financing capital expenditures and excluding player funds, fell 56% year over year. Flutter ended the quarter with a leverage ratio of 4.3 times. The company expects second-half cash generation to reduce leverage by year-end and reiterated its goal of returning to a 2-times-to-2.5-times target range in the medium term.
Flutter updated its full-year outlook, lowering midpoint revenue guidance by $395 million to $17.91 billion and adjusted EBITDA guidance by $210 million to $2.655 billion. The outlook incorporates favorable second-quarter trading, an expected $50 million contribution from market making, $45 million of U.S. operating-cost savings, foreign-exchange effects, additional customer investment and the impact of a one-week delay to the 2026-27 NFL season start.
The NFL scheduling shift, which was not included in prior guidance, represents a $75 million revenue impact and a $50 million adjusted EBITDA impact, Coldrake said. Flutter reduced capital expenditure guidance to $815 million and depreciation and amortization guidance to $730 million.
U.S. Strategy Shifts Toward Customer Investment
U.S. revenue declined 6% year over year in the second quarter. Jackson attributed six percentage points of the decline to customer-friendly sports results, including the New York Knicks’ June win, while saying customer engagement during the NBA Finals and FIFA World Cup was strong.
Flutter said it is moving from a focus on margin growth toward growing average monthly players and average revenue per user. The company plans to increase customer generosity and improve its value proposition during the second half, even though those actions will reduce near-term profitability.
Jackson said FanDuel’s sportsbook improvement plan was producing encouraging results. He cited approximately 40% year-over-year handle growth per NBA Finals game, a 25% increase in active customers during those games, and 2.3 million customers engaging with the World Cup. About one-third of those World Cup participants were reactivated customers, he said.
The company expanded its FanDuel Rewards Club to 70% of customers during the quarter and expects it to reach all customers by the start of the NFL season. Jackson said 82% of surveyed customers reported that the program improved their experience, while more than half said it increased their betting activity.
FanDuel also introduced Bet Protect+, an injury-protection feature, and expanded its soccer offering with features including Super Sub. Coldrake said the company expects U.S. third-quarter adjusted EBITDA to be roughly break-even, followed by about $500 million in the fourth quarter, down from approximately $700 million in prior fourth-quarter guidance.
Management said U.S. online sports-betting market growth was about 5% in the first half and remains subdued following what it described as disappointing NFL content and performance in late 2025. Flutter’s second-half forecast assumes market growth remains broadly consistent with the first half, though executives said compelling sporting content could support stronger engagement.
Prediction Markets and Market-Making Expansion
Flutter continues to view prediction markets as an incremental opportunity alongside regulated sports betting and iGaming. The company said it has observed only low-single-digit cannibalization of its existing sportsbook customer base in regulated states.
Its FanDuel Predicts product is intended to acquire customers in states where sports betting has not yet been legalized while generating economics in the interim. Flutter said it is transferring sports and novelty contracts to Crypto.com while retaining access to CME financial markets. The company expects the change to expand product availability ahead of the NFL season.
The company also plans to launch a One App experience that will allow customers to access FanDuel Predicts more seamlessly nationwide. Jackson said customers opening a contract in one state will be able to close it when traveling to another state, though the wallets will remain separate.
Flutter expects to generate about $50 million in market-making revenue this year. Coldrake said the company believes its sportsbook pricing, risk-management and trading capabilities provide an advantage in complex and correlated markets, including combination markets.
International Growth Led by Italy and Acquisitions
International revenue increased 10%, including contributions from the SNAI and Betnacional acquisitions. Flutter said Italy continued to outpace the market across sportsbook and iGaming, despite a temporary share loss following the SNAI migration completed in April.
After the migration, SNAI performance recovered in June, when average monthly players rose 30%, according to Jackson. Southern Europe and Africa iGaming revenue climbed 34%, supported by exclusive content in Italy and an expanded Turkish product offering.
In the U.K. and Ireland, Flutter said Sky Bet customers were adapting to a new user interface, contributing to sequential improvement. Overall U.K. and Ireland iGaming growth remained 7%. The U.K. gaming-tax increase took effect in April, and management said Flutter is pursuing cost reductions while expecting some competitors to pull back spending.
Brazil’s organic revenue declined year over year in line with the market, which Flutter said was affected by government socioeconomic measures and regulatory uncertainty. The company said it remains focused on long-term expansion there, with product and pricing capabilities, including Bet Builder, now integrated into its local platform.
Cost Program Targets Additional Savings
Flutter said the first phase of its cost-transformation program is ahead of schedule and remains on track to deliver more than $300 million in savings by 2027. The company also expects $200 million of cost savings related to mitigating U.K. gaming taxes by that year.
The newly launched second phase is expected to generate an additional $500 million of gross savings by 2029 through reduced duplication, technology efficiencies and greater use of artificial intelligence. Coldrake said the program is intended to absorb inflation and tax headwinds while preserving capacity for growth investments.
Flutter expects approximately $500 million of transaction, restructuring and integration costs for 2026, including about $200 million more than prior expectations. The increase includes initial implementation costs for the efficiency program and the $95 million tax provisions tied to historical India and U.S. sales-and-use-tax exposures.
About Flutter Entertainment (NYSE:FLUT)
Flutter Entertainment plc is a global sports betting and gaming company that operates a portfolio of consumer-facing brands and digital platforms. The company’s primary activities include online sports betting, casino gaming, poker, and daily fantasy sports, delivered through web and mobile applications as well as retail betting locations in select markets. Flutter focuses on product development, customer acquisition and engagement, and compliance with local gambling regulations across the jurisdictions where it operates.
Flutter’s brand portfolio includes well-known names in different regional markets, such as FanDuel in the United States, PokerStars, Betfair, Paddy Power and Sky Betting & Gaming in Europe and elsewhere.
