Revenue at Paddy Power owner Flutter rose 22% year-on-year in the third quarter to £1.9bn after the betting group added close to 1.8m average monthly players in the previous 12 months, increasing its number of regular punters by 23%.
Revenue growth was powered by Flutter's US operations, which grew 82%, and the acquisition of Italian online gaming operator Sisal.
Flutter's US companies reported pro forma revenue growth of 11%, tied to customer growth of 11%, while outside the US revenues rose 6% and average monthly players increased 19%.
The group said strong growth in their "consolidate and invest" international markets partially offset reduced activity as a result of regulatory changes and post-Covid deflation in the UK, Ireland and Australia.
"Flutter delivered a strong Q3 performance with pro forma growth of 11% in both revenue and average monthly players. Our US division is now our largest and generated $700m in revenue, up 82%," said Peter Jackson, CEO of Flutter.
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"Good growth in our 'consolidate and invest' International markets and the acquisition of Sisal in August helped drive ex-US revenues.
"We are really pleased with our performance in our US division since the start of the NFL in September where we are now averaging over 1m players on a regular NFL Sunday. In addition, we are seeing an increase in customer retention rates as our parlay products continue to grow in popularity, boosted by the start of the NBA season.
"The ongoing momentum in our US division has led to an upgrade to our outlook for the year, underpinning our confidence that we will be profitable for 2023.
"Outside of the US, we welcomed Sisal, Italy's leading gaming operator, to our International division during the quarter and look forward to working with the team to grow the business in Italy and in other International markets."
For the full year, Flutter has upgraded revenue guidance for the US to £2.95-3.2bn, up from $2.85-3.1bn, but the group still expects an earnings loss of between $300m and $360m despite launching operations in Maryland.
Excluding the US, Flutter has forecast earnings of £1.29-1.39bn despite the effects of "weak" trading at its physical retail bookmakers in Ireland and UK fixture cancellations following the death of Queen Elizabeth.
In the UK and Ireland, Flutter recorded revenues of £509m (+4% year-on-year), with online revenues up 4% to £443m and retail revenues down 3% to £66m. Sports revenue in the two markets was down 11%, reflecting the impact of Euro 2020 last year.
Otherwise, the group reported no discernable slowdown this year to date. The expected weighted average cost of debt of 4.1% in Q4 is projected to increase to 5.6% in 2023 and would give rise to c. £280m in net cash interest cost in 2023.
US regulators this week ruled that the FOX Corporation would have to pay $4.1bn if it exercised its option to acquire an 18.6% in Flutter's FanDuel operation, valuing the fantasy sports company at $20bn.
"We were delighted with the successful outcome of our arbitration process with FOX regarding the price of their option to acquire 18.6% of FanDuel," Jackson said.
"This vindicates our position on the matter, with FanDuel valued at $20bn based on its fair market value at 3 December 2020 and provides important clarity on the significant cost required to buy into the number one US gaming business.
"As we look ahead our product and geographic diversification, as well as our recreational customer base, position us well for future growth."
(Pic: Artur Widak/NurPhoto via Getty Images)
