Flutter bets on FanDuel promotions to drive U.S. growth as margins come under pressure

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Flutter uses FanDuel promos for U.S. growth

Highlights

Flutter's Q3 U.S. average monthly players increased 12% and revenue rose 2% to $3.87 billion, both missing analyst expectations as promotional costs pressured margins.
FanDuel Predicts trading volume surged 271% since July, adding 140,000 customers in October, but Flutter forecasts cost of sales at 58% of revenue through 2026–2027 and maintains high media spending.
Flutter reported a net loss of $1.15 billion due to an $873 million Brazil impairment, cut its 2023 revenue midpoint by $300 million to $17.61 billion, and paused buybacks to prioritize debt reduction.

FanDuel customer strategy and quarterly performance

As reported by CNBC, Chief Executive Dan Taylor says Flutter is focusing on better products and more generous customer rewards to turn stronger engagement at FanDuel into improved profitability. Taylor, who has led the company for five weeks, says winning in the sector depends on delivering the customer experience users want and matching that with the right overall proposition.

FanDuel launched a nationwide rewards program in September, which Taylor says is resonating strongly with users. Average monthly players on FanDuel's U.S. sportsbook rise 9% in the third quarter, while bet counts increase 15%. Across Flutter's U.S. business, average monthly players grow 12%, including 24% growth in iGaming.

Sportsbook handle rises 13%, but sportsbook revenue increases only 4% as promotional spending climbs. For the third quarter, Flutter reports an adjusted loss of 18 cents per share, compared with analysts' expectations for a loss of 28 cents, according to LSEG. Revenue rises 2% to $3.87 billion, below the roughly $4 billion LSEG consensus, while adjusted EBITDA falls about 25% year over year to $360 million, also missing expectations.

Outlook shaped by competition, Brazil charges and debt goals

Taylor says Flutter plans to keep investing in customer experience and sees scope to improve structural margins over time by changing the mix of products customers use. The company has also increased media spending to build FanDuel Predicts, its predictions platform competing with Kalshi and Polymarket, while cost of sales as a share of revenue is forecast at 58% for full-year 2026 and into 2027.

Taylor says competition for customers remains intense, but FanDuel Predicts trading volume has surged 271% since July and the app adds 140,000 new customers in October. He also argues the long-term U.S. opportunity remains large because about half the country still lacks access to regulated sports betting and 90% does not have regulated online gaming.

Flutter posts a net loss of $1.15 billion, including an $873 million non-cash impairment tied mainly to Brazil after the country bans sports betting and online gaming in September. The issues in Brazil, together with unfavorable sports results in the U.S. and internationally, lead Flutter to cut its full-year revenue midpoint by $300 million to $17.61 billion and reduce its 2026 adjusted EBITDA outlook by $160 million to nearly $2.5 billion.

Capital returns remain paused as Flutter works to bring leverage back to its target range of 2 to 2.5 times over about the next 24 months. Taylor says the near-term priority is organic growth and debt reduction before the company considers buybacks again.

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