Flutter Entertainment has today reported full-year core profit at the lower end of its forecast range, sending shares in the world's largest online betting company lower, even as its fast-growing US Fanduel unit outperformed expectations.
The Paddy Power, Betfair and PokerStars owner said annual core profit excluding the US grew 4% to £1.295 billion compared to the forecast range of £1.29 billion to £1.39 billion.
Customer-friendly sports results, including Argentina's win and the starring roles of Kylian Mbappe and Lionel Messi at the soccer World Cup, cost nearly £40m in December.
Meanwhile revenue at its Australia Sportsbet business was 6% lower as punters gambled less once Covid-19 lockdowns were over.
But momentum continued to grow at FanDuel, with Flutter's US revenue up 67% to $3.2 billion and at the top end of its outlook range that it upgraded in November.
The US operation made a core loss of $313m, compared with expected losses of $300-$360m and Flutter reiterated it remains firmly on track to be profitable in the US for the first time this year.
FanDuel grew its leading share of the US sports betting market to 50% from 42% at the end of September and slice of the iGaming market to 21% from 19%.
It also had a record Super Bowl and has acquired over 1.2 million customers so far this year.
FanDuel is now the number one operator in 15 of the 18 US states where sports betting is live following the lifting of a nationwide ban in 2018.
Flutter said in November it sees Fanduel's revenue jumping to around $15 billion over the long term, with the overall value of the sports betting and online gaming market to rise to $40 billion by 2030 from $9 billion currently.
Overall, Flutter Entertainment reported a 27% increase in group revenue to £7.693 billion with much of the increase driven by acquisitions.
Flutter said its adjusted earnings were up 4% to £1.045 billion, while it reported adjusted profit before tax of £518m, down 17% from the £620m reported in 2021.
The world's largest online betting company said its average monthly players rose by 26%, on the back of its rapid US expansion, along with the benefits of the Italy's Sisal and tombola acquisitions during the year.
Flutter said it saw strong recreational customer growth in its Irish and UK operations as it also benefitted from the reopening of its bookies shops after Covid restrictions and the acquisition of tombola.
It said its US division delivered an "exceptional performance" in 2022, with revenue at the upper end and an EBITDA loss at the lower end of its guidance ranges.
Revenue grew 67% to £2.6 billion with average monthly players exceeding 3 million for the first time in the fourth quarter of the year, while its EBITDA loss reduced by 6% to £250m.
In Australia, its Sportsbet business delivered a "solid" performance with average monthly players up 8% to 1.1 million.
Revenue was 6% lower, reflecting a Covid tailwind in the first half of the year, which was offset by increased competition in the second half of 2022 and the impact of event cancellations due to adverse weather conditions.
Peter Jackson, Flutter's chief executive, said the company delivered a strong performance in 2022.
"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 the fourth quarter," Peter Jackson said.
"We have an unparalleled number one position in the US where we continue to go from strength to strength. The combined power of the "FanDuel Advantage" and the 'Flutter Edge' delivered our most successful launches to date in Maryland and Ohio," the CEO said.
He said that outside of the US, the company has been pleased with the performance of the business as it faced into regulatory changes and challenging comparatives.
"We are well placed to build on gold medal positions in our mature markets while we are delivering very strong growth in a range of attractive high growth markets. We have been really excited to add Sisal, the number one operator in the Italian market, to our brand portfolio, and we are making good progress with our integration strategy," he added.
Looking ahead, Flutter Entertainment said that trading in the first eight weeks of the year has been in line with expectations.
It said its US division has been delivering continued strong growth across existing states, as well as through the very successful launches in Maryland and Ohio.
"We remain on track to be EBITDA positive for the full year 2023," it stated.
"Group ex-US revenues have benefitted from continued strong momentum in UK and Ireland and International from Q4 2022, which has offset the impact of a more challenging environment and tough comparatives in Australia," it added.
Shares in the company were lower in Dublin trade today.
Additional reporting by Glenda Sheridan
