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On November 9, 2023, Flutter Entertainment (OTC: PDYPY) released its third-quarter trading update, showcasing the strength of its FanDuel unit. The company also revealed its plan to proceed with a U.S. share listing in the first quarter of 2024.
Flutter anticipates that its U.S. operations will generate 2023 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $180 million on revenue of $4.7 billion, following the model set by rival DraftKings last week, Flutter raised their 2023 guidance. This is a considerable increase from its previous forecast of 2023 EBITDA of $110.4 million to $233.2 million, based on current exchange rates, with sales of $4.4 billion to $4.7 billion.
In evaluating the third quarter performance of FanDuel, Flutter noted “Q3 sports gross revenue share of 40% (47% share of net revenue); clear number 1 position driven by leading product,” and an “Excellent start to NFL season with record number of new players acquired during season launch (+37%).”
The prospect of FanDuel being profitable on an annual basis this year cements the company’s significance in the U.S. online sportsbook market. Earlier this year, Flutter announced its plan to list its shares in New York, with shareholders’ approval. However, this has been postponed to the first quarter of 2024. Flutter has disclosed its intention to list its shares on the New York Stock Exchange (NYSE), while also maintaining a listing on the London Stock Exchange.
With plans to gain access to capital and a broader investor base, Flutter’s New York listing could also affect shareholder demands for the spin-off of FanDuel. The company noted that such a transaction would take a backseat to the US listing.
Despite the optimistic outlook for FanDuel, Flutter’s over-the-counter U.S.-listed stock experienced a 12.39% decline on Thursday, with a sharp revenue decline in Australia being a contributing factor.
At the end of the third quarter, FanDuel had a 40% share of the U.S. online sports wagering market, down from 42% a year earlier, although its iGaming share increased to 23% from 19%. This indicates that even as Flutter’s FanDuel unit thrives, there are still challenges to be navigated in various markets.