Flutter (FLUT) Q4 2025 Earnings Call Transcript

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Date

Feb. 26, 2026 at 4:30 p.m. ET

Call participants

• Chief Executive Officer — Peter Jackson
• Chief Financial Officer — Rob Coldrake
• Operator

Takeaways

• Group revenue -- Increased 25% to $8.1 billion in the fourth quarter of fiscal 2025 (period ended Dec. 31, 2025), driven by broad-based segment growth.
• Adjusted EBITDA -- Rose 27% to $1.34 billion, reflecting operational leverage and acquisition integration.
• U.S. revenue -- Grew 33% to $3.2 billion, supported by FanDuel Sportsbook fourth-quarter revenue growth of 35%.
• U.S. adjusted EBITDA -- Increased 90% to $560 million, with management estimating a 70% share of market EBITDA.
• FanDuel Sportsbook margin -- Achieved a 19% NFL season margin, with persistently high fourth-quarter gross revenue margins.
• iGaming revenue -- Climbed 33%, with AMP (Average Monthly Players) up 18% and increased player frequency.
• U.S. market share -- Management acknowledged a loss of share in the fourth quarter, attributing it to higher churn and lower handle.
• FanDuel Predicts launch -- Entered 18 non-sportsbook states in the fourth quarter, with early customer volume aligning with internal expectations.
• Missouri launch -- Achieved customer penetration of 5% of state population within 30 days, described as one of the best state launches.
• Prediction markets investment -- 2026 guidance raised to the upper end of the $300 million range, citing opportunity for new customer acquisition.
• International revenue -- Grew 19%, with fourth-quarter adjusted EBITDA up 6%, supported by acquisitions in Brazil and Italy.
• Italian operations -- Regained online market leadership, with PokerStars revenue up 13% and new customer volumes more than doubling.
• Brazil customer acquisition -- Digital marketing drove a 51% increase since the start of the year.
• Cost savings -- On track for $300 million in cost savings by 2027 through transformation programs.
• Net income -- $10 million versus $156 million in the fourth quarter of the prior year, with the decline reflecting higher interest and increased tax expense.
• Earnings per share -- EPS and adjusted EPS declined by $0.50 and $1.20, respectively, year over year.
• Operating cash flow -- Decreased $224 million to $428 million, primarily due to higher expenses and a $128 million lower customer deposit level.
• Free cash flow -- Declined $335 million to $138 million, including M&A and increased CapEx driven by Italian concession payments and product investment.
• Share repurchases -- $245 million completed in the fourth quarter, total $1 billion for 2025; $250 million to be returned in the first half of 2026.
• Leverage ratio -- Ended year at 3.7x, with a medium-term target of 2.0x-2.5x.
• 2026 U.S. guidance -- Revenue $7.8 billion (+12% year over year); adjusted EBITDA $1.05 billion (+14%), including $70 million for new state investments.
• Alberta launch -- Planned for the second quarter of 2026, with incremental investment reflected in U.S. guidance.
• 2026 international guidance -- Revenue $10.6 billion (+13%); adjusted EBITDA $2.23 billion (+31%), including $70 million investment in Brazil.
• Unallocated corporate costs -- Projected at $310 million for 2026, up $30 million due to investment in technology talent and U.S. listing costs.
• India regulatory impact -- Complete cessation of real money gaming reflected in guidance; management describes response as swift and disciplined.
• U.K. tax impact -- Guidance incorporates higher U.K. gaming taxes, with ongoing mitigation plans.
• Upcoming sportsbook loyalty program -- Launch scheduled for the second quarter of 2026 to replicate the iGaming reward success in sports.
• Credit card deposits -- Company anticipates a de minimis impact from planned cessation of credit card deposits at end of March.

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Risks

• Net income fell to $10 million from $156 million, reflecting higher interest expenses and increased tax charges tied to U.S. profit growth.
• Free cash flow dropped by $335 million to $138 million, including the impact of M&A and increased investment in capital expenditure.
• Management directly linked fourth-quarter U.S. sportsbook market share loss to "higher churn within our customer base and a resultant loss of market share" due to ineffective generosity deployment and product investment phasing.
• U.K. regulatory environment will see increased gaming taxes in April; management expects resulting moderation in competitor strategy but notes mitigation assumptions are "reasonably conservative."

Summary

Flutter Entertainment (NYSE:FLUT) delivered 25% revenue growth and 27% adjusted EBITDA increase in the fourth quarter of fiscal 2025, supported by strong U.S. and international segment contributions. Guidance for 2026 projects double-digit growth in revenue and EBITDA in both key regions, with specific capital allocation toward state launches and emerging prediction markets. Capital returns remain a priority, as shown by the completion of $1 billion in share repurchases and the planned $250 million return in the first half of 2026. Adjusted EPS declined, and free cash flow was adversely affected by higher interest costs, tax charges, and increased capital expenditures. Investments in digital marketing, product loyalty, and new market entry underpin management's stated confidence in sequential improvements and future market share gains amid a shifting regulatory and consumer environment.

• Peter Jackson emphasized, "I have never had more conviction in our ability to capitalize on the long growth runway ahead," framing ongoing investment as fundamental to the group's strategic stance.
• Rob Coldrake stated, "We are making excellent progress on our strategic transformations and integrations," noting that M&A integration has been a key lever for cost savings and EBITDA expansion.
• Management claims FanDuel delivers an estimated 70% share of market EBITDA within the U.S. industry, underscoring its relative profitability leadership.
• Flutter Entertainment regained online market leadership in Italy in the fourth quarter, with integration and product rollout credited for this shift.
• The company confirmed that FanDuel Predicts delivered "no evidence of material cannibalization of our existing business" despite the push into prediction markets.
• Youth of the prediction markets space was highlighted, as Coldrake said, "our view remains that the shape of profit ramp for prediction markets should be similar to new sportsbook state launches."
• For U.K. iGaming, management described 30% of the market as "long tail with much inferior economics," positioning Flutter as better able to withstand tax changes due to operational scale.

Industry glossary

• AMP: Average Monthly Players—key metric in iGaming and sportsbook indicating unique active users per month.
• FanDuel Predicts: Flutter's proprietary prediction markets platform for U.S. states where regulated sports betting is unavailable.
• SGP: Same Game Parlay, a type of bet combining outcomes from the same sporting event into a single wager.
• Handle: The total amount of money wagered by users before payouts and winnings.

Full Conference Call Transcript

Peter Jackson: Thank you, Paul. I am pleased to share our strong fourth quarter results and reflect on our strategic progress in 2025. Flutter Entertainment plc is the world's leading online sports betting and iGaming company. With unique advantages delivered through the Flutter Edge and a proven track record of delivery, 2025 was another transformative year for the company, marked by our strategic execution, continued market leadership, and disciplined investment, delivering group revenue up 17% and adjusted EBITDA 21% higher. In the U.S., we maintained our clear leadership position in both online sports betting and iGaming. We also launched FanDuel Predicts in Q4 to capitalize on the emerging prediction markets opportunity.

In our international business, we strengthened our portfolio with strategic acquisitions in Brazil and Italy, extending our positions in high growth and exciting markets. We made significant progress on our transformation efficiency programs, and we are well on track to deliver the anticipated revenue growth and cost efficiencies. Our swift, disciplined responses to regulatory changes in India where sudden legislative change forced the cessation of real money gaming, and to higher U.K. gaming taxes underscored our scale benefits and business agility. We entered 2026 in a strong position, and I have never had more conviction in our ability to capitalize on the long growth runway ahead.

Turning to the fourth quarter, our Q4 group performance was strong, with revenue up 25% and adjusted EBITDA up 27%. In the U.S., revenue growth was 33% with adjusted EBITDA 90% higher, lapping the significantly unfavorable sports result in the prior year. We delivered another superb iGaming quarter. Revenue grew 33% driven by 18% AMP growth and an increase in player frequency, as our successful content strategy and reward scheme resonated well with our customers. FanDuel Sportsbook Q4 revenue growth was 35%. However, Q4 Sportsbook trends across the market diverged from expectations. High gross revenue margins were offset by moderating handle performance. As a business, we always consider net revenue as our core revenue KPI.

We therefore always consider revenue and handle trends together in conjunction with customer activity levels. This was particularly important this quarter as adverse recycling was a key driver of the lower handle growth, with persistently high gross revenue margins leading to lower levels of customer engagement. In addition, the second half of the NFL season saw less compelling content with fewer popular teams and favorite players making the playoffs this season, adversely impacting customer engagement.

These market trends were far more pronounced for FanDuel for two reasons. First, our significant structural revenue advantage resulted in a greater impact from adverse recycling as FanDuel recorded persistently high NFL gross revenue margins throughout November and December. Overall, we finished the NFL season one hundred and fifth ahead of our expected margin and 19%. Second, our standard generosity playbook proved less effective in Q4, as our investment phasing did not sufficiently align with the pattern of sports results during this period. As a result, we saw a higher churn within our customer base and a resultant loss of market share. We also do not believe prediction markets are having a meaningful impact on our business.

As you would expect, we have undertaken a comprehensive review and found no evidence of material cannibalization of our existing business. This finding is reinforced by our Missouri launch, where customer acquisition trends exceeded expectations, reaching 5% of the population within the first 30 days, making Missouri one of our best state launches to date. Moderated market handle trends continued into the start of 2026. We believe these trends reflect the halo impact of the factors evidenced in Q4 and we continue to monitor trends closely.

As set out in our shareholder letter, we have a clear U.S. strategy for 2026. Our market-leading, highly profitable U.S. position driven by product superiority enabled by our exceptional pricing capabilities combined with highly disciplined customer acquisition, has allowed FanDuel to deliver an estimated 70% share of market EBITDA. However, recent trends have led us to take additional actions to strengthen these capabilities to reinforce our leadership position. We will leverage our scale, proprietary technology, and data advantages to deliver experiences competitors cannot easily replicate, including more intuitive bet building, smarter personalization, and richer live engagement.

In addition, we are enhancing how customers feel recognized and rewarded, with more engaging reward experiences including the launch of a new loyalty program, extending a core part of our casino success into sport. I am confident that the ongoing improvements to our sportsbook product and generosity strategy will harness our scale and structural advantages, driving a sequential improvement in our performance throughout 2026 and deliver market share gains.

Let me now update you on prediction markets and how we are going after this opportunity. We believe that prediction markets will accelerate state regulation of online sports betting and iGaming. This, in our view, is the most valuable long-term opportunity in the U.S. In the meantime, the near to medium term growth potential on prediction markets for FanDuel is significant. There is new TAM to go after. Prediction markets will enable us to acquire new sports and entertainment-first customers into the FanDuel ecosystem ahead of potential regulation. We can deliver attractive returns by providing sports markets to the 40% of the U.S. population who cannot currently access online regulated sportsbooks.

We are exceptionally well positioned to harness this opportunity and we launched our own offering, FanDuel Predicts, in Q4. Early signals have been encouraging, with most activity focused on sports and with average volume per in line with expectations. We are also actively pursuing options to leverage our world-class proprietary pricing capabilities for market making services, and we will share further details in due course. Rob will update on our prediction market financial guidance, but as outlined in our Q3s, we will invest meaningfully, with ambition to deliver a leading position in this space. The opportunity across prediction markets is certainly far bigger than any potential cannibalization of existing sports.

Moving on to our international business, international revenue grew 19% in Q4 and adjusted EBITDA increased 6%. We are making excellent progress on our strategic transformations and integrations, building a strong platform for future revenue growth and delivering cost savings. In UKI, the Sky Bet sportsbook migration delivered the expected cost savings and we are now accelerating customer-facing investment to restore momentum. In SEA, Flutter Entertainment plc regained the Italian online market leadership position in Q4, and the results of the PokerStars migration in Italy have been very encouraging, with revenue growth of 13% and new customer volumes more than doubling in Q4.

PokerStars migrations will continue at pace into 2026 following the successful precedent we have now created in Italy, driving further growth and delivering planned cost savings. The Snai business integration is progressing well. Customer acquisition initiatives, including CSAIL's retail sign-up model and restructured generosity to boost cross-selling reactivations, drove all-time record iGaming AMPs and ensured Snai finished the year revenue growth. The planned platform migration in Q2 will further accelerate this growth by providing SNAI access to a vastly expanded product suite, including CCIL's leading products such as MyConvo. In Brazil, improved casino digital marketing capabilities drove a surge in customer acquisition, up 51% since the start of the year.

We believe the Brazilian market presents a significant and compelling growth opportunity for Flutter Entertainment plc. The 2026 FIFA World Cup represents a unique moment in a soccer-obsessed market as to take market share. As a result, we expect to invest more, and while extending our investment timeline shifts the phasing of profitability, we have strong conviction that disciplined near-term investments will grow the larger, more profitable, and sustainable business over the long term. Looking ahead to 2026, I am confident in our strategic positioning. There are compelling plans in place to strengthen our leadership, unlock future value, and deliver sustainable growth. I will now hand you over to Rob to take you through the financials. Thanks, Peter.

Rob Coldrake: I am pleased to present another quarter of strong financial delivery. Group revenue increased by 25% and adjusted EBITDA grew 27%, driven by good year-on-year performance across both segments and the successful integration of our recent acquisitions. As Peter noted, we are making excellent progress on our strategic transformations and integrations, and we are firmly on track to achieve our targeted $300,000,000 cost savings by 2027. We are embedding rigorous cost discipline across the business, identifying new efficiencies, and optimizing opportunities to protect margins and fund strategic growth investments.

In the quarter, group net income was $10,000,000 compared to $156,000,000 in the prior year, as the strong adjusted EBITDA performance was offset by higher interest costs relating to the financing of our strategic M&A and increased tax expense reflecting the significant step up in U.S. profits. Profitability year over year, earnings per share and adjusted earnings per share declined by $0.50 and $1.20, respectively, reflecting these factors. The group's net cash provided by operating activities declined by $224,000,000 to $428,000,000, primarily reflecting the cash impact of these increased expenses and a $128,000,000 adverse impact from a lower level of customer deposits year over year.

Free cash flow declined by $335,000,000 to $138,000,000, including the impact of M&A and increased investment in capital expenditure. The higher CapEx was driven by the phasing of Italian concession payments and investment in future revenue-enhancing and cost-efficiency projects such as our PokerStars transformations. We completed $245,000,000 in share repurchases during Q4, bringing full year 2025 repurchases to $1,000,000,000 in line with our guidance. Our disciplined capital allocation policy provides flexibility to respond effectively to evolving market conditions and emerging opportunities. We remain committed to our long-term policy of returning capital to shareholders.

We now expect to commence returning $250,000,000 in H1 2026 and we will provide guidance on our future buyback cadence as the year progresses, preserving our flexibility to invest in the business and strengthen our balance sheet. We ended the year with a leverage ratio of 3.7x. Strong profit growth and cash generation will continue to drive leverage reduction throughout 2026, moving us towards our target ratio of 2.0x to 2.5x over the medium term.

Moving now to our outlook for 2026. In the U.S., we expect revenue of $7,800,000,000 and adjusted EBITDA of $1,050,000,000, translating to year-over-year growth of 12% and 14%, respectively. This includes new state investments of $70,000,000 in adjusted EBITDA as we expect to launch Alberta in Q2. The guidance also reflects current trading, where the impact on our customer base from the very high gross revenue margins achieved in the second half of Q4, alongside a less compelling end to the NFL season, has driven lower customer engagement levels into 2026. Outside of NFL, year-over-year trends improved in February.

Although we believe that these market trends are largely transitory, we have taken a measured view of how these trends will progress, including when market handle growth rates will recover from the Q4 recycling impact. We also expect a sequential improvement in FanDuel's relative performance to the market due to improvements to our sportsbook product, generosity strategy, and the launch of our new loyalty program during the year. We now expect that our prediction markets investment will be towards the upper end of the previously guided range, closer to $300,000,000 to reflect the significant opportunity we believe exists to drive customer acquisition.

While it is still very early days, our view remains that the shape of profit ramp for prediction markets should be similar to new sportsbook state launches.

In international, we expect revenue of $10,600,000,000 and adjusted EBITDA of $2,230,000,000, revenue at the midpoint representing year-over-year growth of 13% and 31%, respectively. We are really pleased with the underlying momentum in the first two months of the year, particularly in SEA, where we have extended our online market leadership in Italy. The guidance incorporates an investment in Brazil of approximately $70,000,000 to grow our market position, the previously guided impacts from the U.K. tax increases, and the Indian market switch-off. We expect our unallocated corporate costs to be $310,000,000, a $30,000,000 increase compared with the prior year.

This reflects an increased 2025 base driven by investment in shared technology talent and costs associated with our U.S. listing, which will continue in 2026. To conclude and reiterate Peter's conviction, we are excited for the year ahead and look forward to another year of strong execution. With that, Peter and I are happy to take your questions. I will hand you back to Jaylen to manage the call.

Operator: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press 1 on your telephone keypad. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. To try to get to as many questions as possible, we do request that you try to limit yourself to one question and one follow-up. Your first question comes from the line of Jordan Bender of Citizens. Your line is open.

Jordan Bender: Hey, everyone. Good afternoon or good evening. Peter, I wanted to start with one of the quotes from the press release where it says, difficult to be definite as to when market growth rates over recover from the impact in 4Q recycling. I guess what I am trying to figure out here is could you do you think any of this was going on could be structural in nature? And do you ever see this type of phenomenon happen across any of your other sports markets globally? And I guess the second or the follow-up question to that is, your sportsbook mops were up 4% for the year.

This story around increasing penetration into existing states is something that you have spoken to in the past. So I am curious where you think you stand in terms of net new customers to support this environment where we are seeing handles as well? Thank you.

Peter Jackson: Thanks, Jordan. Let us start with your question around handle and how that compares with other markets that we operate in. I think it is worth acknowledging that the period of time we are talking about in the U.S. in Q4 is in the football season, and I have talked before about the very high levels of volatility that we see around football in the U.S. So I think when I think about other markets, the softer-driven markets we see in the U.K., or Italy, you know, racing in Australia, we would see less volatility and less sustained periods of very positive sports results.

Now I can remember this time last year when we were talking about the football season and people were concerned as to whether we could ever see positive sports results in football. Clearly, this season we have seen very strong results, and as I stated earlier, we have seen a margin of 19% across the full football season. When you compare that with last year and the very substantial step up in margins year over year, you would expect to see a commensurate drop in handle, right? It is the math in terms of how it works from the customer play.

So that phenomenon of recycling and the impact that margin has on growth of stakes is something that we have seen before. In terms of your second question around AMPs, look, I think the important thing is that our sports bar AMPs in our pre-2025 states were also growing in Q4. The combined sports and our gaming business saw mid-single-digit growth. So we are still seeing AMP growth in all the core cohorts.

Operator: Thank you. Again, in the interest of time, when asking your question, please ask your follow-up as well as your main question at the same time. Your next question comes from the line of Paul Ruddy of Davy. Your line is open.

Paul Ruddy: Just on it is a little bit of a follow-up to that, but on the structural hold piece, it looks exceptionally strong. Has there been any change of strategy around pursuing a more, say, hold-positive, handle-passive strategy in the way you have set yourselves up? And maybe if you could just give, if there is any quantification of what you think the actual amount of handle impact might have been year on year from that recycling impact?

Peter Jackson: Hi, Paul. I think one of the things I would state is when I think about the NFL season this year, when you look at the quality of the teams that got into the latter stages of the competition, there were a lot less of the key marquee players involved. That has a significant impact for us because of our dependence on the parlay market. I actually suspect that we saw lower levels of parlay penetration than we would otherwise have done if we had to match up like we had last year. There is nothing we have changed, we have not changed our vig or anything like that.

We simply saw a very considerable set of consecutively positive sports results. I think 10 out of 11 weeks we saw very favorable weeks of above average margin there, a number of weeks above 30%, which we think has a real impact on customer sentiment when you get to those levels. In terms of the black art of trying to work out if it were not for that, what would have happened to handle, it is very difficult. I think there is a lot of complexity. It is a complex relationship between those things, and of course, you have also got the overlay of what is going on from a generosity perspective as well.

I think it is hard for us to make a full assessment.

Operator: Your next question comes from the line of Barry Jonas of Truist Securities. Your line is open.

Barry Jonas: Can you maybe talk a little bit about the prediction product today and how you see that improving moving forward? And then maybe as a follow-up, curious to get your thoughts on the probability of more U.S. state tax increases here. Is there any scenario where you might exit OSB in any uneconomically viable state to focus more on federal? Thank you.

Peter Jackson: Barry, we are obviously pleased we have got our prediction market product from a sports perspective into those 18 states where we cannot currently offer our regulated OSB. Clearly, that is a lot of incremental opportunity for us to go after that we otherwise could not have had. We have good plans to improve the breadth and quality of the product we have over the course of this year.

There is obviously the World Cup coming up shortly, which is going to be a very important opportunity for us to showcase the quality of our soccer product both for the half of America who are in states where there is OSB, where we are very excited about that, but also into the half of America who will be reliant on our Predict product. Soccer is actually the fourth most popular sport for us by GGR.

I think we are excited about that, and we believe that we have a lot of expertise in that globally, of course, and can couple that together with the quality of the FanDuel brand and our experience in the Betfair exchange to really push hard. There are lots of other product enhancements we intend to make over the course of the year before we get to the start of the NFL.

Rob Coldrake: From a tax perspective, Barry, we are clearly at the outset of the year and moving into legislative season. As ever, there will be some noise and soundings about tax increases in certain states. On the positive front, actually, just before coming on this call, we have had positive news regarding getting a license in Arkansas, which is a positive move for us. Ultimately, if we do see any tax increase, there are not any that we see with degree of certainty at the moment. As a scale operator, we are very well placed to mitigate those, as we have proven in the past.

We have levers at our disposal and costs that we will use to mitigate that and work through it.

Operator: Your next question comes from the line of Jeff Stantial of Stifel. Your line is open.

Jeff Stantial: Hey, good afternoon, Peter and Rob. Thanks for taking our questions. Maybe starting off on the handle trends in Q4 and year to date, Peter, you talked to some market share loss, which is expected to moderate as the year goes on. But if you look at performance in the Missouri launch, there really does not seem to be much dilution to share at all. So maybe could you just help us reconcile those two data points? And then for my follow-up, Rob, it looks like unallocated corporate is pacing well above the 2027 targets that you introduced a few years back. Can you just frame for us what has changed, if anything, and where do you go from here?

Thanks.

Peter Jackson: Jeff, you are right. We have been very pleased with the launch in Missouri, and as I stated earlier, it is one of our most successful state launches to date in terms of population penetration. We are very pleased with that, and it is down to our excellent new state playbook. The point I would make around some of the handle trends that we saw in Q4 last year really ties back to some of the stuff I was talking about in terms of the very strong and sustained periods of very high margins, coupled with the fact that we saw less popular teams getting into the playoffs for football.

I suspect that there were some of our customers who, to use another sporting analogy, put their cues back in the rack and stopped betting. We will have to reactivate those customers. We are excited about the product changes that we will be delivering over the course of this year. I mentioned the loyalty program, the changes to generosity, the World Cup coming up. There are a lot of great opportunities, March Madness first, to push hard and get these customers back in our platform.

Rob Coldrake: From a corporate cost perspective, Jeff, there are a couple of points to make. We are slightly above our original guide. There are a couple of contextual points to this. The first is we obviously resegmented the business at the start of 2025 and we saw some additional cost moving to corporate as a result of that resegmentation. The second point with regards to 2025 is we actually had some reduced revenue-driven cost allocations as part of the year-end closeout, which is just kind of left pocket, right pocket.

We have been investing in cost in the center overall with the Flutter Edge, and we are seeing excellent payback in terms of the transformation, strategic transformation work that is going on across the group. Lastly, we have just kicked off a comprehensive cost optimization program across the group, and we are looking to optimize further efficiencies as we go through 2026.

Operator: Your next question comes from the line of Brandt Montour of Barclays. Your line is open.

Brandt Montour: Hi, everybody. Thanks for taking my question. So digging into U.S. revenue guidance for 2026, low teens growth expectations, I think we kind of got a sense now for some conservatism around handle. Have you guys changed your philosophy around how you guide for outcomes or for structural hold with NetGuide?

Rob Coldrake: I will pick this up, Brandt. We have not changed our philosophy. What I would say in summary for 2026 is we have taken a sensible, measured approach to our guidance. The guidance includes 12% revenue growth for 2026 and 14% EBITDA growth in the U.S. We are not including any revenue from prediction markets in that as we want to trade through the period initially before we take a view on that. As Peter mentioned, it is quite a complex relationship between handle and gross revenue margin, and that is why we look at revenue as our core KPI and we guide to revenue only.

Also, we have not talked about iGaming yet, but we are assuming that the iGaming growth continues in the high teens, and we will have double-digit sportsbook growth on revenue. Overall, as I said, it is a sensible, measured approach that we feel comfortable with. We should also see some sequential improvement through the year as we land some of the products and generosity initiatives that we talked to in the shareholder letter.

Operator: Your next question comes from the line of Ed Young of Morgan Stanley. Your line is open.

Ed Young: Thank you. My question is around the less effective generosity playbook. You mentioned phasing, improved investor offerings, and elevated generosity in the market. So my question is, how should we square your commentary around your new generosity strategy? You said you want to be sort of disciplined but also competitive. Is that you saying effectively that you need to make your scale count by keeping your generosity at higher levels? And then my follow-up is the commentary is also that the improved competitor offerings versus competition, and what sort of additional investment are you making or do you think you need to make to make that right?

Peter Jackson: Hi, Ed. Thank you for the question. On generosity, it is a very important topic for us. I have talked about some of these heightened levels of margin that we saw. It is fair to say that we did not execute our generosity strategy as well as we should have done. We pushed hard in the beginning of Q4, and when you look at what the pattern of gross win margins were throughout the back end of Q4, we just saw this very sustained period, including a number of weeks of, as I said earlier, above 30%. We should have pushed harder on generosity at those points, and we did not.

That is something that we will address and make sure that we incorporate into our playbook for the future. This is not about putting more money on the table. This is about using what we have in a smarter way. Tying to that point about being smarter with it, when I look at what we do with our casino business, we get a lot more credit for the generosity we give our customers there as a result of the loyalty program that we have. The rewards program has been a really important driver of the success of casino.

I know we must be one of the few consumer businesses in the state that does not have a loyalty program, full stop, for sports. It has been very successful for us in casino, and as I said, we will bring that experience into our sportsbook, which I think will be very important. That is something that we will do in Q2 this year. We are going to remain disciplined. We saw a very unusual situation after the last couple of years where we have seen low margins in football, then very high and very sustained periods of margin, and we did not have the right playbook or tools really to be able to deal with it.

Rob Coldrake: Picking up on the second part of your question, Ed, around products. I do not necessarily think this is something that has not worked for us per se, but more a bit of a narrowing of the gap in terms of the product advantage that we have typically held over the last few years. As we think about this, we are looking to double down on the product advances that we have had previously. We are working on a number of things in the U.S. and in our international business. As we outlined in the release, there are a few specific areas.

When I look at differentiation and innovation and really enhancing our SGP offering, outside of the U.S., in Italy, our MyCombo product is working extremely well for us, and that has allowed us to take the leadership position back in Italy; the rewards piece that Peter talked about; and also just elevating the core journeys and the personalization and experience of being on the FanDuel site, which we have got a team working on. The other piece which we obviously talked about a lot previously is our outcome-based pricing and how this really provides the structure and the foundations behind our product innovation and improvements moving forward. We still remain incredibly excited about this.

It is taking a little while to work through, but fundamentally we expect this to be a significant product advantage for us when we fully land and roll out that capability.

Operator: Your next question comes from the line of Shaun Kelley of Bank of America. Your line is open.

Shaun Kelley: Hi, good afternoon, everybody. Thanks for taking my question. I want to follow up on Rob's comment about the double-digit growth you are seeing in sportsbook, or you are expecting, embedded in the guidance. Just, Rob, can you help us compare that to the run rates you are seeing in the business right now? I know current quarter is a little harder to comment on, but the market has been so dynamic it has been a little hard to track. While we can see handle numbers, it is harder to get that full NGR picture. So any color you can give us there to kind of square what you are seeing in the business with that outlook would be helpful.

Then also, if you could just comment maybe high level on what you are seeing share-wise for the NBA, because it feels like we have seen that as a product that Flutter Entertainment plc has historically done extremely well in, but we have seen the competition ramp up there. Thanks.

Rob Coldrake: Thanks, Shaun. In terms of current trading, we started off the year with a continuation of the trends that we observed late Q4. The closing stages of the NFL season, as Peter alluded to, including the playoffs and the Super Bowl, saw some slightly less compelling player narratives and that drove continued lower levels of customer engagement into the start of the year. Outside of the NFL, we start to see trends improving month on month into February, which is encouraging. I think some of the customer fatigue from the positive sports results persisted into January as well.

As Peter said, we had 10 out of 11 positive weeks and ended up the NFL season with a 19.3% margin on NFL, which is incredibly strong for a season overall. In terms of February data, based on the small sample that we have, the week-to-week volume trends are definitely improving, suggesting that part of this was potentially an NFL season-specific dynamic. At this stage, it is still quite early, and we remain slightly limited on whether the current market dynamics will be short lived or what we will see over the next quarter or few months. We are quite confident about our Q1 guide and will continue to monitor trends very closely.

We are confident that we have the right plans in place to continue improving our U.S. performance over the course of the year, and we have definitely seen a sequential improvement even over the last few weeks.

Peter Jackson: On the question around, at a high level, NBA, this has always been an area that is important to us. Again, it is down to things like the quality of the players that we have engaged in the games and the strength of our parlay offering. There is inevitably a bit of a bleed across between customers who are betting on both football and NBA that, if they have seen those very high margins on football, negatively will have some impact on their ability to stake on NBA.

Operator: Thank you. Again, due to time constraints and a large volume of questions, we ask that you now restrain yourself and please ask one question. Your next question comes from the line of Jed Kelly of Oppenheimer. Your line is open.

Jed Kelly: Hey, great. Thanks for taking my question. Just going back to your prediction markets, do you feel like you potentially would want to acquire your own DCM license just to control your own destiny? Or can you just talk about how your JV with the CME is progressing? Thanks.

Peter Jackson: We spend a lot of time working how we wanted to tackle prediction markets. We have got our product into the market. We are into those 18 states that we cannot offer our regulated sports betting product in. We are going to make a series of product changes over the course of this year. We are very happy with the CME with a strong pipeline of product improvements coming through. I also referenced some of the stuff we are looking at around market making as well. There is a lot going on in this space. We are planning to invest a lot of money in that.

I hope we are sat here in a year's time when we have been able to invest very successfully and acquire a lot of customers onto our platform.

Operator: Your next question comes from the line of Daniel Politzer of JPMorgan. Your line is open.

Daniel Politzer: Hey, good afternoon, everyone. Thanks for the question. I want to go back on prediction markets unsurprisingly, I guess. What have you seen that justifies the incremental spend there? Because it sounded like things were so far tracking in line with your expectation, and along those lines, how do you think about the competitive landscape evolving if and when we do get a greater degree of regulatory clarity here?

Peter Jackson: Dan, we have got experience of investing organically in our business. I think about what we are doing in Brazil at the moment. I think about all the courses we had post-PASPA being repealed. We have always taken a very disciplined approach when opportunities arise, and we will make sure that we acquire as much business as we can. Clearly, the phasing of our marketing will align with our product roadmap and scale over the course of this year. This quarter is more about test and learn to understand how we optimize our spend and drive conversion. We expect to invest heavily in the second half of the year.

Given the opportunity we see, we expect to be towards the top end of the figures. I reserve the right to spend more if we find bigger opportunities.

Operator: Your next question comes from the line of Bernie McTernan of Needham and Company. Your line is open.

Stefanos Crist: Hi, this is Stefanos Crist calling in for Bernie. Just wanted to follow up on Arkansas. We understand there is a 51% revenue share. Just wanted to ask why launch now and maybe why not do Predict instead of the traditional sportsbook? Thank you.

Peter Jackson: I am happy to pay that, and I think what we have seen in Missouri with our new state playbook is a really good example of when you have given customers or consumers the choice, the breadth of offering that you have in a traditional OSB, together with the generosity playbook you can provide, means it is a much more compelling offering. We are super excited. That is what our true north is for us in the business. We would like to see more states passing regulation for OSB and indeed iGaming. For those, we would love to see more states pass. There are only two national players in the state.

We are excited to get our playbook going and see what we can do in the state.

Operator: Your next question comes from the line of Ben Shelley of UBS. Your line is open.

Ben Shelley: Hi, thanks for taking my question. Do you expect U.S. online sports betting market share to stabilize in 2026? And more broadly, what is giving you confidence in sequential improvement in your competitive position through the year? Thank you.

Peter Jackson: Ben, yes, we are confident in the quality of the products that we have in the market. We are excited about the introduction of our loyalty program. There is more work we are doing around generosity. As Rob mentioned on the question earlier, there are enhancements that we are making to our products as well. I am very confident in our ability to execute. We have consistently done that. I think that we will be able to hold our market share and, look, I would like us to take more market share to the extent that we can get good returns on it, and we will spend that money.

Operator: Your next question comes from the line of Clark Lampen of BTIG. Your line is open.

Clark Lampen: My questions are related to the sportsbook loyalty program. I think, Peter, number one, just for clarification, I think you said that was going to roll out in Q2. I wanted to make sure I had that correct. And then second, I wanted to see if you could give us a little bit of color around when you introduced this same offering for your iGaming business, what the immediate impact was. Is it the revenue driver? Did it help you with promo? There have clearly been a bunch of questions on the call thus far around the direction of promo. So maybe with that as a reference point, was it helpful to promo?

Was that a source of leverage, I guess, for iGaming when you introduced that? Any color that you could provide or reference points would be helpful. Thank you.

Peter Jackson: Clark, from our casino business, our rewards program has been a really important part of the success of that business. We got to a record market share in Q4 with 28%. We are still building our loyalty, the rewards program. There are still changes we are making. We are still integrating more of the generosity into the program. We have been at it a long time in the casino business, and there is still a way to go. It is a little bit like our parlay product. We are never done. There are always improvements and changes we can make. We will launch the loyalty program for our sportsbook.

One of the immediate benefits that we have seen in casino is that you get much better saliency from your customers around the rewards that you are giving them, and I expect to see that happen in our sportsbook. We sometimes describe it as a link and labeling. That is the immediate step change we would expect to see, and I hope it will help drive increases in wallet share.

Operator: Your next question comes from the line of Ian Moore of Bernstein. Your line is open.

Ian Moore: One on capital allocation. How would you rank the different inputs you are weighing in deciding at what point you become more active on share repurchases through the year? Any update you are willing to give on progress toward resolution of the Fox option? Thank you.

Rob Coldrake: Maybe I will start with the capital allocation question, Ian. As I mentioned in my prepared comments, our capital allocation framework remains consistent with what we outlined at our Investor Day in 2024, and we remain committed to the long-term policy of returning capital to our shareholders. As we often say, we are an “and” company, so we will ensure our allocation decisions are balanced by the opportunities to invest for growth but also to optimize for leverage over time. Our current approach really provides us with the flexibility to respond effectively to evolving market conditions and emerging opportunities.

In 2026, we will prioritize significant capital deployment across both the organic investment in our core business, which has historically yielded the highest returns, by the way, and strategic investment in the newly emerging prediction market opportunity. There is a lot to go after. We continue to generate a lot of cash in this business, and we can and will delever quickly, but there are lots of interesting and exciting allocation opportunities ahead of us through 2026 which we want to get behind.

Peter Jackson: There is nothing to say on the Fox option at this stage.

Operator: Thank you. Your next question comes from the line of Robert Fishman of MoffettNathanson. Your line is open.

Robert Fishman: Hi, good afternoon. Any more color you can provide? I think you said high-teens growth that you are expecting for the U.S. iGaming in 2026. Just how sustainable do you think that is as we think about the years ahead? Thank you.

Rob Coldrake: If you think about, Robert, the iGaming market in 2025, it grew around 26% and our revenue growth was 33%. As the states mature, we would expect some moderation of that growth, but we feel confident it is going to continue to be mid-to-high teens. Therefore, we do expect continued strong growth. We are excited about the product roadmap that we have got in iGaming. There is definitely still a long way to go on the penetration rates in iGaming. If you look at what we set out, I think it is 9.5% at the Investor Day; we were about 6.5% as we stand today.

So there is lots to still go after there, and we are incredibly pleased with our iGaming performance.

Operator: Your next question comes from the line of Joe Stauff of Susquehanna. Your line is open.

Joe Stauff: Thank you. Hello, Peter, Rob. Just sorry about it, but I wanted to ask a little bit more just on generosity investments and those returns for FanDuel. It certainly makes sense in iCasino you get a higher return. You get more betting events. That makes sense. But do you get a return? That seems to me to be a unique customer, meaning that customer does not necessarily cross-promote into OSB. So your generosity investments in OSB, at least for that, does cross promote. Is that maybe part of what we are trying to figure out and what happened essentially in the third and fourth quarter with respect to your approach?

Because, obviously, you are gunning on iCasino, and it has worked. I was just wondering if that is part, if that is a realistic understanding of how you are allocating that capital and why the returns are lower?

Peter Jackson: I think there are two things going on, and let me just make sure I understand your question. Effectively, we did not deploy our generosity efficiently in Q4. Particularly when you think about the very long sequence of very high margins, particularly during those real peak weeks, we were not efficient and effective. We should have been deploying more generosity at those points. Separately, we have had lots of success with deploying our loyalty or rewards program into casino. In all of our businesses, we deploy a lot of generosity to customers, and one of the advantages of bundling up that generosity within a loyalty program is consumers understand better what has been going on.

I actually think one of the issues for us in Q4 was there was a bit of a whipsaw: generosity was on, it was off; it is on, it is off. Particularly at a time when margins were running very hot, I think we were probably causing a bit of confusion amongst our customers and we were just not deploying it effectively. That is what we are going to address: get to a more efficient and effective distribution of generosity. That is very important.

Operator: Next question comes from the line of Chad Beynon of Macquarie Group. Your line is open.

Chad Beynon: Afternoon. Thanks for taking my question. With respect to the upcoming U.K. iGaming impact, has anything changed in the current landscape in terms of how your competitors are maybe running their business—promos, marketing, etc.? Could this potentially adjust how you are thinking about mitigation? Thank you.

Rob Coldrake: Hi, Chad. We obviously laid out our top-level plans for mitigation when the changes were introduced in Q4 last year. To this point, we are not seeing anything different to what we had anticipated in terms of activity, but it is actually early days because the tax changes do not hit until April. What we expect will happen is that people will start to moderate behavior from that point onwards. If you think about the market share of iGaming in the U.K., there is a very long tail. About 30% of the market share is in the long tail with much inferior economics to us given our scale.

We fully anticipate that there will be some changes in marketing and generosity and return-to-player dynamics as we move through the year. We were reasonably conservative in terms of our view of what we recapture versus the tax increase, and we still remain confident in that.

Operator: Your next question comes from the line of John DeCree of CBRE. Your line is open.

John DeCree: I wanted to circle back to a comment you made in the prepared remarks—your sentiment that we share as well—and that is prediction markets should accelerate OSB and iGaming regulation in the states. So curious if you could share any more color on that view and your perspective. You probably have as good of a view or better than anyone. What kind of inputs help you feel confident that might come to fruition?

Peter Jackson: John, I think we are singing to the choir if you are in agreement with me. We believe that the noise around prediction markets is an opportunity for us to acquire customers in advance of the states regulating, but we do think it will help hasten the regulation of iGaming and online sports betting. We have got an extensive team who are focused on this, and we are having some very fruitful conversations at the moment. We have just had some good news in Arkansas. Who knows where else the next shoe to drop will be. I am excited to see some of the gaming space coming on at some point soon.

Operator: Your next question comes from the line of Monique Pollard of Citi. Your line is open.

Monique Pollard: Hi. Hello, everyone. Afternoon and evening. Thanks for taking my question. Apologies if I missed it, but I could not see anywhere if you could help clarify how much you spent on FanDuel Predict in the fourth quarter—just conscious that you did not have, you know, it was only a handful of states during Q4 before the wider launch in January.

Basically, the follow-up question to that is me just trying to understand how much of the guidance change in the financial predict for 2026 to the upper end is just a timing shift versus how much is it that you have seen something in the Predict customers you have acquired so far that makes you think it is worth pushing more aggressively on that opportunity in 2026? Thank you.

Rob Coldrake: Hi, Monique. We did not actually confirm a number in the release, so you did not miss anything. It is actually lower than the $45,000,000 that we guided at Q3, so we ended up spending slightly less than that in the quarter. I think Peter outlined earlier on very well what our intentions are for 2026. We have now said that we are going to be towards the top end of the range. What I would say is that within that we retain our right to have flexibility on that spend. It is a very fast-moving category, and our investment will ultimately be driven by the types of returns that we see.

Ultimately, both of us would be delighted to be sitting here at the end of the year saying that we have actually invested at the top end or beyond that envelope because that will mean that we are really achieving traction in the prediction market space.

Operator: Next question comes from the line of Ryan Sigdahl of Craig-Hallum. Your line is open.

Ryan Sigdahl: Hey. Good day, Peter. I hear you on the NFL playoffs. I know we were all sad the Vikings did not make it. Question is, given the more pronounced moderation in customer activity and the unfavorable recycling in the U.S., relative to your peers, how does the company plan to maintain your structurally higher hold while also retaining share of players' wallets?

Peter Jackson: Hi, Ryan. I think we discussed some of these factors already. The key issue that we saw in Q4 was not that we had, over the course of this football season, the 19% margin. That was great. If you look at where the gross margin was for Q4, we are in line with what we anticipated doing for 2027. The issue really was how we deployed our generosity, and that is something that we are addressing. We have got to make sure that our generosity strategy reflects what we are seeing in the market. Those 10 out of 11 weeks with very high and sustained margins, and then a number of weeks at 30%, really impacted our business.

The relationship around what we are doing with generosity with where margins are, there is a hangover impact that you get for a couple of weeks after those very high margins. It is something we will make sure that we address. Personalized generosity is the way to deal with that because, of course, even when we are talking about very high margins, there are still averages and there are customers who have done well and customers who have done badly within that. What the team have a lot of experience of doing in Australia, we are learning from that and deploying it into the U.S. business. This is not so much a matter of the issue of the margins.

It is more how we make sure that we spend generosity effectively. Customers understand what is happening, and we do not have the situation where we are being inconsistent, and that is not helpful for customers, particularly for these consecutive high margins.

Operator: And your last question comes from the line of Richard Stuber of Deutsche Bank. Your line is open.

Richard Stuber: Hi there. Good evening. Just from me, a question on the credit cards. I did read somewhere that you have now stopped taking credit card deposits. I was wondering, have these credit card deposits been largely offset by the same customers using alternative payment methods? Or have those credit card customers bought and left? Is that a similar thing which your competitors are doing in terms of credit cards? Thank you.

Rob Coldrake: Hi, Richard. This is something that we knew about, have been anticipating, and also something that we have navigated in a number of our markets around the world. We are anticipating a de minimis impact from this. It comes in at the end of March. It is within our plans, and we are not expecting it to have a material impact.

Peter Jackson: Okay. I think we are done with the questions. Thank you very much, everybody, for dialing in. Much appreciated.

Operator: This concludes today’s conference call. You may now disconnect.

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