Q4 2024 Flutter Entertainment plc Earnings Call
Peter Jackson: Good afternoon and welcome to Flutter's Q4 and fiscal year 2024 earnings call hosted by CEO Peter Jackson and CFO Rob Koldrick.
Good afternoon, and welcome to Flutters Q4, and fiscal year 'twenty 'twenty four earnings call hosted by CEO, Peter Jackson, and CFO, Rob Cole's Reich. Please note. This conference call is being recorded all lines have been placed on mute to prevent any background noise.
Operator: Please note this conference call is being recorded. All lines have been placed on mute to prevent any background noise.
Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during that time, simply press star followed by the number one on your telephone keypad. We kindly ask that you please limit your questions to two.
After the Speakers' remarks, there will be a question and answer session. If you'd like to ask a question during that time simply press star followed by the number one on your telephone keypad. We kindly ask that you. Please limit your questions did you I will now hand, you over to Paul Thames water director of Investor Relations to begin today's call.
Paul Tymms: I will now hand you over to Paul Tymms, Flutter Director of Investor Relations, to begin today's call. Hi, everyone, and welcome to Flutter's Q4 results call.
Hi, everyone and welcome to the Q4 results call with me today.
Paul Tymms: With me today are Flutter's CEO, Peter Jackson, and CFO, Rob Koldrake.
Speaker Change: CSI <unk> after the shortage hurting pizza will open with a summary of our operational progress.
Peter Jackson: After this short intro, Peter will open with a summary of our operational progress, and then Rob will run through the Q4 financials and our new guidance for 2025. We will then open the lines for Q&A.
And therefore, obviously the cable finances.
Speaker Change: Our guidance for 2005.
Speaker Change: We will then open the lines for Q&A.
Peter Jackson: Some of the information we are providing today, including our 2025 guidance, constitutes forward-looking statements that involve risk, uncertainties and other factors that could cause actual outcomes or results to differ materially from those indicated in the guidance. These factors are detailed in our earnings press release and our SEC guide. In addition, all forward-looking statements are based on current expectations, and we undertake no obligation to update any forward-looking statement except as required by law.
Speaker Change: The information we are providing.
Speaker Change: Our guidance constitutes forward looking statements.
Speaker Change: Risk.
Speaker Change: And other factors could cause actual results to differ materially.
Speaker Change: Okay.
Speaker Change: These factors are detailed in our earnings press release SEC filings.
Speaker Change: In addition, any forward looking statements based on current expectations.
Speaker Change: No obligation to update any forward looking statement, except as required by law.
Peter Jackson: Also in our remarks or responses to questions, we will discuss non-GAAP financial measures. Reconciliations are included in the results materials we have released today, available in the investors section of our website.
Speaker Change: Also in our remarks or responses to questions. We will discuss non-GAAP financial measures. Reconciliations are included in our results materials, we have released today.
Speaker Change: Well I'm sorry.
Speaker Change: Hey, guys.
Peter Jackson: Thank you, Paul. I'm delighted to provide an update on what has been a fantastic year for Flutter. Our strategic positioning provides a compelling investments opportunity. This includes access to significant growth markets and a scaled and diversified portfolio of local hero brands who win in their local markets through accessing our unique differentiator, the Flutter ADR. In 2024, we capitalised on these opportunities as we strengthened our leadership position in the US market, while globally, our local brands solidified their number one positions and took share in key markets, including the UK and Italy. We also grew into new markets, with the very successful Fangio launches in North Carolina and Vermont, along with the addition of MaxFab in our international business.
Speaker Change: Thank you Paul.
Speaker Change: The license will provide an update on what has been a fantastic yes.
Speaker Change: Yes.
Speaker Change: Strategic positioning provides a compelling investment opportunity.
Speaker Change: This included significant.
Speaker Change: Significant growth markets and our scale diversified pool.
Eric: Hey, Eric.
Eric: In our local markets Youre accessing a unique differentiator.
Eric: Yeah.
Eric: In 2020 people, we capitalize on these opportunities as we strengthened our leadership position in the U S market.
Globally, our local brands.
Eric: Number one positions in some.
Eric: Key markets, including the UK.
Eric: We also have a new mode.
Eric: With a very successful <unk> launch is in North Carolina.
Eric: Along with the addition of <unk> International business.
Peter Jackson: We've achieved this by leveraging the Flutter Edge to deliver the best product for players. Our pricing capabilities give our players access to the leading same-game parlay products across multiple geographies, driving both engagement and continued expansion of our market-leading structural gross revenue margin. Our iGaming product proposition is going from strength to strength with the creation of Flutter Studios, which we believe will better harness our games development capabilities, and which complements the addition of further K1 supplier content. Altogether this translates it into excellent financial performance with revenue growth of 19% and adjusted EBITDA $482 million or 26% higher in 2024.
Eric: We've achieved a lot.
Eric: There's not that much.
Eric: Alright.
Eric: Yes.
Eric: Our pricing capability.
Eric: Thanks, guys, leading safety and quality across multiple geographies driving both engagement and continued expansion of our market leading structural gross revenue bonds.
Eric: Our gaming product proposition.
Eric: This trend with the creation of <unk>.
Eric: Which we believe will better hardly saw gaming capabilities.
Eric: Complement inhibition.
Eric: Scott.
Eric: Altogether this translated into excellent financial performance with revenue growth at 19% and adjusted EBITDA $482 million or 26%.
Three people.
Peter Jackson: were leveraged now within our medium-term guidance range after declining by nearly a turn in 2024, we will truly see the benefits of being an AND business in 2025. Firstly, we expect Banjo's fantastic product pipeline will drive continued organic investment in player acquisitions to sustain our leadership position in the U.S. Secondly, in a newly formed international division, we expect to add the SNAE and NSX acquisitions in the first half, further enhancing the scale and diversification of the group in high-grade markets. And thirdly, we'll get the full year benefits of the share repurchase programme, with up to a billion dollars of repurchase expected across 2025.
Eric: With leverage now within our medium term guidance range after declining by nearly twice.
Eric: We haven't really seen the benefits to date.
Eric: The business in 2000 colleagues.
Eric: Firstly, we expect Angela adversity product pipeline will drive continued investment.
Eric: To sustain our leadership position in the U S.
Eric: Secondly, and a newly formed International Division, we expect.
Eric: And NSX acquisition in the first half further enhancing the scale and diversification of the group and high growth markets.
And thirdly, we will get the full year benefits of the share repurchase program with up to $1 billion.
Eric: Post 2025.
Peter Jackson: Turning now to our performance in Q4. In the US, we exited the year in a position of unparalleled strength, with a Sportsbook GGR market share of 43% and an iGaming GGR market share of 26%. This means we close the year as a clear number one online sportsbook operator in the US, a position we have consistently maintained. And we have now also overtaken other multi-brand competitors to become the number one iGaming operator. This market leadership position has been delivered and maintained through our later focus on product innovation, combined with a disciplined customer acquisition strategy. The strong performance in the quarter was somewhat masked by the well documented adverse sports results, as we saw some of the most customer friendly NFL results on record.
Eric: Turning now to our performance in Q4.
Eric: In the U S. We exited the year position of unparalleled strength with the sports book <unk> market share of 43%.
Amy GTI: Amy GTI, marking a 26%.
Eric: This means we closed the year.
Eric: Number one online sports book operators in the U S.
Eric: Physician, we have consistently maintained.
Eric: And we have now wholesale I would say other multi brand.
Eric: To become the number one Greg.
Eric: Great.
Eric: This market leadership position, that's been delivered maintain a laser focus on product innovation combined with a disciplined customer acquisition strategy.
Eric: The strong performance in the quarter.
Eric: By the well documented.
Eric: Yes at.
Eric: As we saw some of the ice customer friendly NFL results on record.
Peter Jackson: While these short-term results led to a change in outlook for 2024, the transitory nature of these impacts, which are part of operating a sports club, has no bearing on the long-term position of the business, as we have absolute confidence in our leading pricing and risk management capabilities, and in the structural growth and net revenue margin targets which we outlined at the investment summit. I've been really pleased with the strength and trajectory of the U.S. business. Existing player cohort growth remains encouraging and the opportunity to acquire new customers remains very compelling with payback periods of less than 18 months and well below our two-year threshold for investment.
Eric: While these short term results that's a change.
Eric: The transitory nature of these impacts which has cost of operating our schools.
Eric: There is no pending malone's have positioned the business as we have absolute confidence, leading pricing and risk management capabilities and in our structural gross and net revenue margin targets, which we outlined at the Investor day.
Eric: I've been really pleased with the strength and trajectory of the U S business.
Eric: Existing pattern kind of old Grace remains encouraging and the opportunity to acquire new customers remained very compelling with payback periods of less than 18 months and well below thresholds.
Eric: Thresholds for investments.
Peter Jackson: Our focus on product innovation helps to drive our structural gross revenue margin to 14.5% in the board. Parlay penetration continues to increase, with NFL up 500 basis points from a high base, as our market-leading same-game parlay products continue to resonate very well with our customers. Our product pipeline is stronger than ever, with a number of new support features launched in Q4, leveraging our market-leading pricing capabilities. These included increased betting markets across all major sports, a new live activity tracker for NFL, which has seen good early adoption rates, and greater ability for customers to tailor the general activity with more to come in June 2025.
Eric: I will focus on product innovation to drive our structural gross revenue margin since 2014 and 5% in the quarter.
Eric: <unk> penetration continues to increase with the NFL.
Eric: The basis points on the high base.
Eric: Our market leading same guys.
Eric: Continued to resonate very well with our customers.
Eric: Our product pipeline is stronger than ever.
Eric: With a number of news sports features launched in Q4, leveraging our market leading capabilities.
Eric: These included.
Eric: Respecting market Hustle major schools.
Eric: New loan activity tracker, NFL, which is seeing good adoption rates and greater vascepa customers tied to the general never see the northern half of June 2020 bonds.
Peter Jackson: We also continue to trial our revolutionary new Your Way product, with all states having access to this new, customisable way of betting NFR in a quarter, and we are now in the process of rolling out Your Way to NBA markets. Although it's really early stages, the engagement we've seen from customers has been very pleasing. and iGaming Product Innovations has also delivered us to our number one position. Launches included sports-themed games such as NBA Superslap, who we expect will help drive sportsbook costs down, and exclusive titles like Samurai 888 Kenshin. We know access to exclusive games appeals to our direct-to-iGaming customers in particular, as we laid out a design recommendation for you.
Eric: We also continue to trial a rapidly shrinking your way products with all states.
Eric: New customizable way.
Eric: Or is that.
The prices are quoting at your way NBA markets.
Eric: Well there is really no. These pages engaged when received from customers has been very pleasing.
Online gaming product innovation is also delivered us number one position.
Eric: Launches include you're still seeing games, such as NBA superstar and we expect will help drive cost out and exclusive titles by summer.
Eric: Hey, <unk>.
Eric: We know that's exclusive games it goes right alright, alright gaming customers.
As we laid out at our Investor day.
Peter Jackson: We improved our iGaming rewards proposition with the introduction of a new jackpot functionality on our daily prize mechanic, Fandral Reward Machine, as well as trialling our new Fandral Rewards Club loyalty program. Combined, these features help to deliver exceptionally strong outgrowth of 37%. Our fundamental drivers are taking good momentum into the new financial year. The NFL season ended with a great Super Bowl, and as we look into 2025, I feel very confident about FanDuel's prospect. From a regulatory perspective, the U.S. continues to be a dynamic market. For new stage opportunities, we continue the QuestionMap expansion for both Sportsbook and iGaming.
Eric: We increased our I gaming room proposition with introduction of new functionality.
Eric: Daily price mechanic Fine jewelry Award machine.
Eric: Well it is filing a new <unk> rewards loyalty program.
Eric: Combined these features helps to deliver exceptionally strong and correct.
Eric: 37%.
Eric: Our fundamental drivers taking good momentum into the new financial year.
Eric: Yes, NFL season, and if it was a great Super Bowl as we look into 2025 I feel very confident.
Speaker Change: Hi, Jos prospects.
Speaker Change: From a regulatory perspective.
Speaker Change: <unk> continues to create dynamic markets.
Speaker Change: Our new state opportunities, we continue to push <unk> expansion.
Speaker Change: Those books and gaming.
Peter Jackson: We also note the recent development of production markets and opportunities that may arise for us there. We are also monitoring proposals for state gaming tax increases within the regulated sports betting market. We are working closely with advisors and regulators alongside our peers to ensure the impact such changes can have on the regulated market are well understood. Irrespective of what means states may use to manage their budget deposits, as the largest operator in North America, we believe that we are in the best position within the sector to mitigate impacts should they arise. Outside of the US, we have a strong quarter, with revenue growth of 14%, where access to our front-edge capabilities is driving share gains across the portfolio.
Speaker Change: We also have noted the recent developments of collection markets and opportunities that may arise.
Speaker Change: We are also monitoring proposals the state gaming tax increases within the regulated sports betting market.
Speaker Change: We're working closely with advisors unregulated alongside.
Speaker Change: And show the impact of such changes can have on the regulated markets are well understood.
Speaker Change: Irrespective of what means states may use to manage that budget deficits as the largest operator in North America. We believe that we are in the best position within the sector to mitigate impacts should they arise.
Speaker Change: Outside of the US we had a strong quarter with revenue growth of 14%.
Speaker Change: First off the edge capabilities is driving share gains across the portfolio.
Peter Jackson: In UKI, we had another excellent year. We've now grown our market share by four percentage points over the last two years. Product delivery continues to be key to that success. In the quarter, Paddy Power's expanded Supercell products drove increased pilot penetration and in turn, structural gross revenue margin improvement. And engaging English Premier League has also driven high levels of player demand. Our iGaming proposition continues to improve with expansive free-to-play content, such as the Sky Vegas Guaranteed Prize Machine, and a broader range of Tier 1 gaming options. In Italy, T-SAL's poker players now have access to PokerStar's shared liquidity pool, quickly resulting in record prize pools and showing the direct benefits of access to the Flutter.
Speaker Change: <unk> had another excellent year with <unk> growing our market share by four percentage points lost Cvs.
Speaker Change: On the delivery continues to be key to that success.
Speaker Change: In the quarter <unk> has expanded its EBITDA drove increased product penetration and in terms of structural threats revenue margin improvements.
Speaker Change: And engaging English Premier League has also driven high levels of high demand.
Speaker Change: Gaming proposition continues to improve with expanded free to paid content such as the Sky Vegas, Kevin Keith Prize machine and a broader range of tier one gaming.
Speaker Change: And Anthony T cells.
Speaker Change: <unk> now have access to think Astellas share liquidity cool quickly, resulting in record client schools in China direct benefits.
So the top edge.
Peter Jackson: Detail's compelling omnichannel offering helped drive a 33% increase in Italian amps during Q4, with omnichannel players generating over one and a half times more online revenue compared to online-only players. Given its large omnichannel presence, we look forward to welcoming SNAI into the group in the second quarter. Positive momentum continues across our key consolidating investment markets, demonstrating the benefits of our diversified portfolio and our capacity to invest for long-term growth. This is demonstrated well in India, where we continue to invest due to the impact of tax changes introduced in October 2023, which temporarily impacted growth rates.
Speaker Change: Can you tell a compelling omnichannel offering helped drive a 33% increase and there's probably a J in Q4.
Speaker Change: The channel class.
Speaker Change: But one of the times more online revenue.
Speaker Change: Got it.
Speaker Change: Given this large omnichannel presence, we look forward to welcoming side.
Speaker Change: And so take rate in the second quarter.
Speaker Change: Positive momentum continues across our key consolidator in the best markets, demonstrating the benefits of our diversified portfolio.
Speaker Change: Lastly to invest alongside Gregg.
Speaker Change: This is demonstrated by in India, where we continued to invest in the impact of the tax changes introduced in October 2023, which temporarily impacts at great rates.
Peter Jackson: The underlying data can now be seen, with annual growth of 72% on a year-over-two-year basis. In Australia, player driven momentum in sports remains a positive tailwind against the known softer racing market, with underlying trends playing out in line with our expectations during the quarter.
Speaker Change: The underlying.
Speaker Change: Okay magazine and.
Speaker Change: 72% on a year to date.
Speaker Change: Basis.
Speaker Change: In Australia.
Speaker Change: <unk> thousand seven sports remains positive.
Speaker Change: Again.
After raising market with underlying trends playing out in line with our expectations during the quarter.
Peter Jackson: Finally, and in summary, we believe that the group is very well positioned for 2025 and also to deliver our 2027 goals that we set out as our investors. We have excellent momentum in our global businesses and we are delivering against our Playwell ambitions. Fanjul has made a strong start to the year and we expect to materially expand our fare base due to our market-leading product. The reorganisation of our ex-US businesses into our new international division will enhance our strategic focus on winning in our local markets. while our cost transformation programmes will ensure we maximise shareholder value.
Speaker Change: Finally in summary, we believe the group is very well positioned between 25 and almost.
Speaker Change: <unk> hundred seven goals that we set taxes on Investor day.
Speaker Change: We have excellent momentum in our global businesses are delivering against our ambitions.
Speaker Change: And Joe has made a strong selling season.
Speaker Change: And we expect to materially expand our Paradise.
Speaker Change: <unk> market leading products.
Speaker Change: The reorganization of our ex U S business days, and so our new International Division, but enhance our strategic focus on winning in our local markets, while our cost transformation programs to ensure we maximize shareholder value.
Rob Koldrick: I will now hand over to Rob to take you through the credentials and our guidelines. Thanks, Peter. And hello, everyone. It's great to be talking to you today about another strong quarter. The group delivered revenue and adjusted EBITDA growth, 14% and 4% respectively, despite the impact of the customer-friendly sports results in the US. The group generated net income of $156 million, which is after the combined non-cash expense of $346 million, the amortization of the acquired intangibles, and the fair value movement on the FOX options. Earnings per share increased by $5.59 to $0.45 in Q4, benefiting from the recognition of a tax credit on historic U.S.
Paul Thames: I will now hand over to Paul take you through the financials and guidance.
Paul Thames: Thanks, Peter and Hello, everyone.
Paul Thames: Great to be talking to you today about <unk>.
Paul Thames: Strong quarter group delivered revenue and adjusted EBITDA growth.
Paul Thames: 74% respectively.
Paul Thames: Right.
Paul Thames: Customer friendly sports results in the U S.
Paul Thames: The group generated net income of $156 million.
Paul Thames: Could you talk to the combined non cash expense of 346 million amortization of the acquired intangibles.
Paul Thames: Probably you based upon the Fox option.
Paul Thames: Earnings per share increased by $5 50, 945 in Q4 benefiting from the recognition of a tax credit on historic U S losses, and an impairment charge in the prior year comparative period.
Rob Koldrick: losses and an impairment charge in the prior year comparative period. Adjusted EPS, which now excludes certain value movements, primarily the impact of the revaluation of the FOX option, increased 67% due to the tax credit.
Paul Thames: Adjusted EPS, which now excludes some funny movements, primarily the impact of the revaluation of the Fox option increased 67% due to the tax credit.
Rob Koldrick: Turning now to the financial performance for each of the segments. In the US, revenues 14% higher with adjusted EBITDA of $163 million. This included continued strong iGaming growth of 43%, driven by the product improvements Peter outlined, driving excellent player growth and engagement during the course. Sportsbook revenue growth of 8% reflected the adverse impact of sports results, as well as a moderation in handle growth to 12%. As anticipated, the sequential handle trend was lower than Q2 and Q3 due to various factors, including the timing of state launches in the current and prior year, a greater number of NFL games in Q4 2023, and the continued migration of our customers to higher revenue margin products, which are typically also lower handle wages.
Paul Thames: So I think analysis financial performance for each of the segments.
Paul Thames: In the U S revenue was 14% higher with adjusted EBITDA of $163 million.
Paul Thames: This included continued strong gaming grew 43% driven by the product improvements pizza outlines driving excellent plant growth and engagement during the quarter.
Paul Thames: Sports book revenue growth of 8%, reflecting the adverse impact from sports results as well as a moderation and handle growth and 12%.
Paul Thames: As anticipated the sequential trends in Q2, and Q3 due to various factors, including and so having a stable choosing the current and prior year, a greater number of NFL games in Q4 of 2023, and the continued migration of our customers to higher margin products, which room are typically also.
Paul Thames: I will hand the wages.
Rob Koldrick: We estimate customer-friendly sports results cost approximately $550 million in revenue and $360 million in adjusted EBITDA in Q4. This is before factoring in one-off cost mitigations and any recycling benefits.
Paul Thames: We estimate customer friendly sports results cost approximately $550 million in revenue and $360 million and adjusted EBITDA in Q4.
Paul Thames: This is before factoring in walnut cost mitigation any resorts and benefits.
Rob Koldrick: I will summarise our estimate of the net impact on 2024 when I walk through our 2025 guidance. From a cost perspective, we continue to deliver excellent operating leverage, despite the impact of sports results on revenue, the incremental taxes year-over-year in Illinois, and the opportunity to continue to invest in customer acquisition. Outside of the US, revenue grew 14% while adjusted EBITDA increased 6%. UKI had an excellent quarter, with revenue growth of 20% driven by a strong performance in both sportsbook and iGaming, which were 31% up and 16% up respectively. Sportsbook revenue was aided by the positive year-over-year swing in sports results at 390 basis points, combined with a further 110 basis points expansion in our structural gross revenue margin as players engage with our expanded same-game parlay offering.
Paul Thames: I will summarize our estimate that the net impact on 2000 and people when I walk through our 2025 guidance.
Paul Thames: From a cost perspective, we continue to deliver excellent operating leverage despite the impact of sports results from revenue the incremental taxes year over year in Illinois, and the opportunity to continue to invest in customer acquisition.
Paul Thames: Outside of the U S revenue grew 14%, while adjusted EBITDA increased 6%.
Paul Thames: Okay.
Paul Thames: <unk> had an excellent quarter with revenue growth of 20% driven by strong performance by the sports book in gaming.
About 31% up and 16% respectively.
Paul Thames: Sports book revenues aided by the positive year over year swing in schools results of 390 basis points combined with a further 110 basis points expansion in our structural gross revenue margin as players engaged with our expanded guidance holiday offering.
Rob Koldrick: An international constant currency revenue growth of 23% was driven by a 22% increase from existing consolidated and first markets, a max that also contributed 8 percentage points to the year-over-year growth. DeSalle had an exceptional quarter in Italy, highlighted by online revenue growth of 41% as we took share in the market, and benefited from a favourable swing in sports results. India, Turkey, Georgia and Brazil all performed strongly in the quarter, demonstrating the benefits of our diversified portfolio. In Australia, revenue was 8% lower, reflecting softness in the racing market, although ant growth has been encouraging at 7%.
Paul Thames: And international constant currency revenue growth, 23% was driven by 22% increase from existing consolidate in test markets.
Paul Thames: <unk> contributed eight percentage points to the year over year growth.
Paul Thames: <unk> had an exceptional quarter and estimate highlighted by online revenue growth of 41% as we took share in the market benefited from a favorable swings of sports results.
Paul Thames: India, Turkey, Georgia and Brazil.
Paul Thames: <unk> strongly in the quarter, demonstrating the benefits of our diversified portfolio.
In Australia revenue was 8% lower reflecting softness in the rising market, although I'm correct thats pretty encouraging at 7%.
Rob Koldrick: Cash flow growth in the quarter was underpinned by the growth in our business, with net cash from operating activity up 67% and free cash flow growth up 175%. Cash flow also benefited from the Comps versus Prior year, which included increased CapEx relating to the acquisition of our new US office in LA, and increased transaction costs associated with our US listing. Cash flow conversion over the year as a whole was excellent, with free cash flow of $941 million, a $0.6 billion increase year-over-year, despite the $428 billion headwind relating to assessment of derivatives in 2023 and 2024.
Paul Thames: Cash flow growth in the quarter was underpinned by the growth in our business with net cash from operating activity up 67% and free cash flow growth countries, 75%.
Paul Thames: Cash flow also benefited from the comps versus prior year, which included increased capex relating to the acquisition of our new U S office in Allied and increased transaction costs associated with our U S listing.
Paul Thames: Cash flow conversion over the year as a whole excellent with free cash flow of $941 million.
<unk> <unk> 6 billion increase year over year, despite the 420 <unk> headwind related to the settlement of derivatives in 2023.
Paul Thames: 24.
Rob Koldrick: The significant expansion in group-adjusted EBITDA of $482 million over the last year and FX movements drove a $635 million reduction in our net debt over the equivalent period to bring leverage within our medium-term target range at 2.2 times. This anticipated reduction unlocks the capacity to repurchase up to $1 billion in shares across 2025 in tandem with the acquisitions of SNAI and NSX, totalling approximately $2.7 billion.
The significant expansion in group adjusted EBITDA was $482 million last year.
Paul Thames: Next movements drove a $635 million reduction in our net debt at the equivalent periods.
Paul Thames: It brings referenced within our medium term target range at two six times.
Paul Thames: This anticipated production unlocks the capacity to repurchase up to $1 billion in shares across 25 in tandem with the acquisitions of <unk> and NSX, taking approximately $2 7 million Boes.
Rob Koldrick: Moving now to the 2025 guidance we have published today, which includes trading up to the end of February. In the US, we expect existing state revenue and adjusted EBITDA midpoints at $7.72 billion and $1.4 billion, respectively. This represents year-over-year growth of 33% and 176% and growth at the midpoints of our Investor Day commentary after adjusting for sports results in the 2024 phase. Normalising 2024 for sports results, US net revenue would have been around $6.3 billion and adjusted EBITDA approximately $800 million. This includes adjustments of one-off costs we called out as mitigation in Q4, as well as our estimate of the benefit of recycling in the course.
Paul Thames: Moving now from 2025 guidance, we had published to date, which includes trading up through the end of February.
Paul Thames: In the U S. We expect existing state revenue and adjusted EBITDA midpoint of $7 $72 billion $1 $4 billion respectively.
Paul Thames: This represents year over year growth, 33%, a 176% and growth at the mid points of our Investor day commentary.
Paul Thames: Adjusting for the sports results from the 2024 base.
Paul Thames: Normalizing 2024 sports results U S. Net revenue would have been around $6 $3 billion.
Paul Thames: This EBITDA approximately $800 million.
Paul Thames: This includes adjustments of one off costs, we called out was mitigated in Q4 as well as our estimate the benefit recycling in the quarter.
Rob Koldrick: 2025 has started really well. Underlying trends are in line with our expectations, with an acceleration in staking trends from Q4 levels as we lack a more life-for-life calendar period. Sports results for the year to date have been roughly neutral, with a great Super Bowl result offsetting adverse sports results in January.
Paul Thames: 2025, starting pretty well underlying trends are in line with our expectations with an acceleration spanking trends from Q4 levels as we lap the whole life.
Kevin Keith: Kevin the periods.
Kevin Keith: <unk> results for the year to date, it's been roughly neutral with a great Super Bowl So offsetting scopes results in January.
Rob Koldrick: I'll now take you through some comments I'm saving from the existing state guide. In the first half of 2025, it's worth remembering that the shape of 2024 was impacted by adverse sports results in Q1 and positive sports results in Q2, and therefore, phasing year-over-year will look different. We therefore expect revenue in Q1 to be roughly 24% or 25% of total revenue for the year and Q1 adjusted EBITDA to be around 20% of 2025 adjusted EBITDA. Around 60% of our US-adjusted EBITDA is expected to arise in the second half of 2025, with Q4 remaining our largest quarter of the year.
Kevin Keith: I'll now take you through some comments on phasing for the existing state guidance and the <unk>.
Kevin Keith: First half 2025, it's worth remembering that shaves at 2020 before was impacted by adverse sports results in Q1 positive sports results in Q2, and therefore phasing year over year difference.
Kevin Keith: We therefore expect revenue in Q1 to be roughly 24, 25% to total revenue for the year Q1, adjusted EBITDA to be around 20% by 2025 adjusted EBITDA.
Kevin Keith: Around 60% of our U S. Adjusted EBITDA is expected to arrive in second half 2025 from Q4 remaining our largest quarter of the year.
Rob Koldrick: New state and territory launches are expected to result in negative revenue of $40 million and an adjusted EBITDA cost of $90 million, reflective of a Q4 launch in Missouri and some pre-launch investment costs in Alberta ahead of an anticipated Q1 2026 launch.
Kevin Keith: These statements are three launches are expected to result in negative revenue 40 minutes.
Kevin Keith: Adjusted EBITDA loss of $19 million reflective of a key for a launch in Missouri prelaunch investment cost in Alberta.
Kevin Keith: Ahead of an anticipated Q1 2026 launch.
Rob Koldrick: Moving on to Group XUS guidance, we expect revenue and adjusted EBITDA midpoints of $8.25 billion and $1.85 billion, respectively, excluding M&A. On a nominal basis, this is in line with 2024, but equates to growth of 6% and 10% for revenue and adjusted EBITDA, respectively, after adjusting for foreign currency movements and the gross sports results benefit in 2024, and is in line with our expectations. Foreign currency exchange rates have moved against the dollar over the last few months to create a 3% year-over-year headwind at revenue and adjusted EBITDA of approximately $220 million to $50 million respectively.
Kevin Keith: Moving on to Syncrude ex U S guidance, we expect revenue and adjusted EBITDA midpoint of $8 <unk> 5 billion from $1 $85 billion, respectively. Excluding M&A.
Kevin Keith: Nominal basis. This is in line with 2024 equates to growth of 6% and 10% for revenue and adjusted EBITDA, respectively. After adjusting for foreign currency maintenance on the school's results benefit in 2024 and is in line with our expectations.
Kevin Keith: Foreign currency exchange rates have moved against the dollar like the last few months to create a 3% year over year headwind at revenue and adjusted EBITDA of approximately $220 billion 50 billion respectively.
Rob Koldrick: Scores we're facing should be broadly in line with 2024 after allowing for the Euros in Q2 and Q3, along with very favourable sports results in Q2. Revenue growth is reflective of continued momentum in international and an encouraging outlet in Australia. I've anticipated growth in UKI is moderating from the high levels reported during 2024 as we come against positive sports results, the European Soccer Championships in 2024, absorbing the impact of the government white paper finally being implemented and as we migrate Skybet onto our global platform. Overall ex-US guidance also reflects the initial benefits of our cost efficiency programme and we remain on track to deliver over $300 million in annualised cost savings by 2027.
Kevin Keith: <unk> financing should be brought in line with 2024 after allowing for the Euro in Q2 Q3, along with very favorable sports results in Q2.
Kevin Keith: Revenue growth is reflective of continued momentum international encouraging outlets in Australia.
Kevin Keith: As anticipated growth in UK, it's moderating from the high levels reported during 2020 full as we comp against posted spokes results European Soccer Championships in 2024.
Kevin Keith: Absorbing the impacts of the government white paper finally, being implemented and as we migrate Skype on spark global platform.
Kevin Keith: Overall ex U S guidance also reflects the initial benefits of our cost efficiency program.
Kevin Keith: <unk> on track to deliver the $300 million in annualized cost savings by 2027.
Rob Koldrick: 2025 is an important year for these programmes and we are very pleased with our progress to date. We expect to migrate Skydeck customers to a single UKI platform across the summer and complete the program by the end of the year. Dissolve players now have access to the Pokestars Poker Liquidity Pool, and we expect Italian players to be accessing a combined platform later this year.
Kevin Keith: 2025 is an important year for these programs and we are very pleased with our progress to date.
Kevin Keith: We expect to migrate sky that customers to a single platform across the summer and complete the program by the end of the year.
Kevin Keith: Our players now have access to the Pokerstars poker liquidity pool, we expect the timing plans to be accessing a combined platform later this year.
Rob Koldrick: From Q1 2025, we will combine UKI International and Australia into one new combined international segment. This means the Group Ex-US Adjusted E-Data Midpoint Guidance is split between $2.08 billion for the new international segment and $230 million of unallocated corporate overhead.
Kevin Keith: From Q1, 2025, we will combine <unk> International Australia into one combined international segment.
Kevin Keith: This means the group ex U S. Adjusted EBITDA midpoint guidance is split between 2.08 billion from <unk> International segment and $600 million unallocated corporate overhead.
Rob Koldrick: Finally, we have also guided on some additional income statement and cash flow items that you can find in today's release.
Kevin Keith: Finally, we have also guided on some additional income statement and cash flow items, you can find in today's release.
Operator: With that, Peter and I are happy to take your questions, and I'll hand you back to Regina to manage the call.
Kevin Keith: With that paints or am I happy to take your questions and I'll hand, you back to Rajiv to manage the code.
Operator: At this time, I'd like to remind everyone, in order to ask a question, press star, followed by the number one on your telephone keypad, and we kindly ask that you limit your questions to two.
Speaker Change: At this time I'd like to remind everyone in order to ask a question press star followed by the number one on your telephone keypad, Let me kindly ask that you limit your questions to queue. Our first question will come from the line of Ed Young with Morgan Stanley. Please go ahead.
Ed Young: Our first question will come from the line of Ed Young with Morgan Stanley. Please go ahead. Thank you. My first question is on U.S. guidance. You've given a lot of detail there, so thank you. I wonder if you could pick up on the 90 million of investment losses in new states.
Ed Young: Thank you my first questions on U S guidance, you can a lot detail. That's it. Thank you I wonder if you could pick up on the $90 million of investment losses. In these states can you just talk through the timing movement on Missouri, now, but if there are any other underlying changes.
Rob Koldrick: Can you just talk through the timing movement on Missouri and Alberta and if there are any other underlying changes within the guidance, perhaps more broadly, could you comment on the customer acquisition environment? And then the second question is on prediction markets. Peter, you mentioned it very briefly there. Just listening to your main peer describe there's more of an opportunity than anything else. Is that how you see it?
And then the guide and perhaps more broadly could you comment on the customer acquisition environment.
Ed Young: And then the second question is on prediction markets Pizza you mentioned it very briefly there just sticking to your main peer described theres more of an opportunity than anything else is that how you see it.
Ed Young: Yeah.
Rob Koldrick: And shall I pick up on the first question, Ed, with regards to the new state? So, as mentioned, yeah, we're expecting to launch Missouri in Q4, you know, potentially around November, and we're expecting Alberta not to be until Q1 2026. As we said previously, 1% of the population we think roughly equates to around $35 million in contribution costs in terms of the state launch in the first six months. So that ends up being around $80 million for Missouri, as most of those investment costs are typically incurred up front, as we said before. And then in Alberta, we're expecting around $10 million for a kind of pre-live investment towards the end of this year.
Ed Young: Okay shall I pick up on the first question with regards to the <unk> segment.
Ed Young: And yet were expecting to launch in Missouri in Q4 centered around November and we're expecting our best not to be so.
Ed Young: Q1, 2026, as we've said previously 1% of the population, we think roughly equates to around $35 million and contribution costs.
Ed Young: With stable titles in the first six months.
Ed Young: Figure out $80 million.
Ed Young: Missouri is most of those investment costs, specifically in cost upfront as we said before.
Ed Young: And then in Alpha.
Ed Young: So we expect around $10 million.
Speaker Change: We're a pretty large investment, it's mostly under the CFO catching the $90 million.
Peter Jackson: So that gets you to the $90 million. I think, you know, you asked about customer acquisition more broadly, you know, we've been very pleased with the way in which we've been able to continue to lead into the market, you know, with the, I reckoned earlier, the extent to which we continue to see good opportunities to acquire customers, I think we actually did 24 with a bigger business than we anticipated. And I don't see any reason that we can't continue to push on and build as big a business as we can.
Speaker Change: I think yes.
Speaker Change: That customer acquisition more broadly we've been very pleased with a Y which they announced this to continue to lean into the market.
Speaker Change: I referenced earlier.
Speaker Change: Are you continuing to see good opportunities to sell.
Speaker Change: Clark has been that we exited at 20, but when you think of business of late.
Speaker Change: Dissipated.
Speaker Change: <unk>.
Speaker Change: And so to speak of business as we can.
Peter Jackson: With regards to your second question, Ed, we are monitoring the situation with these sports futures contracts closely. The regulation is very fluid. I think we understand that this CFTC is due to hold a roundtable on sports-related event contracts the next month or so, and we get especially a clarity thereafter. It could be an interesting opportunity, but I think it's worth recognising that the products themselves lack the richness of a true sports book offering. I think about the UWA products and the stuff we were doing around the Superbowl for that. It's a very compelling, very broad set of products, and we need to remember that the prediction products are very vanilla in comparison.
Speaker Change: With regards to your second question as well.
Speaker Change: We are monitoring the situation with EA sports FIFA franchise closely.
The license very flourish.
Speaker Change: We understand that they stay at TCT to hold around statements both selective and the contract for the next months lets say, we get especially pharmacy.
Speaker Change: Offset it could be an interesting opportunity, but I think it's worth recognizing that the cost themselves.
Speaker Change: Richness of the two sports book off right and you think about the <unk> products and then frankly, we're doing the Super Bowl stat.
Speaker Change: Yes, it's a very competitive probably towards <unk>, but we need to have it as a collection products.
Speaker Change: Got it.
Speaker Change: Pascal.
Operator: Thank you.
Speaker Change: Thank you.
Clark Lampen: Our next question comes from the line of Clark Lampen with BTIG. Please go ahead. Thanks very much. Good evening. Peter, I wanted to follow up on customer acquisition trends just very, very quickly. Did you see any major delta in acquisition trends between, say, iGaming First customers and Core Sportsbook? And as it relates to iGaming product and in sort of 25 and beyond, you talked about the launch of a rewards program and integration of new jackpot features into the product.
Speaker Change: Our next question comes from the line of Arc lamp with BPI. Please go ahead.
Speaker Change: Thanks, very much good evening, Peter I wanted to follow up on customer acquisition trends just very very quickly did you see any major delta in acquisition trends between say I gaming first customers on core sports book.
Speaker Change: And as it relates to I gaming product in sort of 25 and beyond you talked about.
Speaker Change: The launch of our rewards program and integration of New Jack Pocket, Alright, sorry jackpot features into the product I don't know if it's too early to comment, but I'm curious if you could give us on the product and rewards program, maybe a feel for what the expected benefits might be from those integrations over time.
Peter Jackson: I don't know if it's too early to comment, but I'm curious if you could give us on the product and rewards program, maybe a feel for what the expected benefits might be from those integrations over time. Well, it's afternoon, Clark. It certainly is afternoon where I am, but from a customer acquisition perspective, I made the point earlier about how pleased we are with the trends. We're seeing very strong growth in iGaming. You can see that in the AMP numbers, year over year, when you look at the fourth quarter, and that's what's behind the very strong revenue performance we saw in the quarter.
Speaker Change: Well this afternoon class certainly enough nowhere I am but yeah.
Speaker Change: From a customer acquisition perspective.
Speaker Change: We've made the point.
Speaker Change: Bob.
Speaker Change: <unk>.
Speaker Change: The trends, we're seeing very strong growth in high gaming you can see that in yen numbers next year.
Speaker Change: Year over year, when you report fourth quarter and year vessels behind the very strong revenue performance, we saw in the quarter.
Peter Jackson: It is a function of the fantastic things we're doing from a product perspective. The reward machine jackpots, which were live in October, I think have been very important. The Found Your Casino Rewards Club, which is a flagship loyalty program. We did a beta launch in December to a subset of our customers. There's a lot going on. There's a bunch of we've been doing over the course of this year, which I'm sure you've seen access. We're giving customers access to some exclusive content, which I know the team are very excited about as well. I'm delighted that we're doing both to drive the direct casino acquisition, but also to continue to support the cross-selling into the sports book as well.
Speaker Change: It is a function of the fantastic things, we're doing from a product perspective.
Speaker Change: The reward machine jackpots with liaison.
Speaker Change: Teva, yes.
Speaker Change: Yes, I think <unk> been very importance the tangible casino rewards club, which is a flagship locally program. We did a beta launch in December to a subset of our customers.
Speaker Change: Yes.
Speaker Change: Timing on a bunch of things that we've been doing over the course of this year, which I'm sure you've seen egg sets.
Speaker Change: What we're giving customers access as an exclusive content genetic team are very excited about as well.
Speaker Change: I'm delighted to.
Speaker Change: But it's to drive the direct casino.
Speaker Change: Acquisition, but also to continue to support the the cost seven instead of sports book as well.
Operator: Thank you.
Speaker Change: Thanks, Steve if I may I have a very brief follow up just on Italian lottery, Peter you've previously expressed some interest in bidding for a second moderate contract I'm curious if that's still an opportunity that's been focused or has that materialized, maybe the way that you might've expected.
Clark Lampen: If I may, I have a very brief follow-up just on Italian lottery. Peter, you've previously expressed some interest in bidding for a second lottery contract. I'm curious if that's still an opportunity that's in focus, or has that materialized maybe the way that you might have expected? I think you're referencing, I mean, in Italy, there is an opportunity to bid for the lotto contract. It's a very different type of product to the Super Enelotto that we already run in Italy. We've been very pleased by the way in which we've been able to, you know, run the Super Enelotto product.
Speaker Change: But I think you're referencing.
Speaker Change: Initially there is an opportunity to basically let's say contracts.
Speaker Change: A very different type of products today.
And alongside that we already run in Italy, we've been very pleased by the way in which we've been I would say Nick.
Speaker Change: The <unk> also put us I think she thought it then escalated chop incentives that activating net driving cross sell and set.
Peter Jackson: I think C-SAL has done a brilliant job in terms of activating that driving cost selling set, you know, the online channel and driving benefits from that. There is an opportunity to bid for the lotto. You know, we are, you know, putting our thoughts together on that. We've got a couple of weeks to decide what, you know, what we're going to do. But luckily, I think the extent to which we can make a good financial return on it, you'd expect us to lead into it. It is different to the sort of lottery products that we see in the US.
Speaker Change: Online channel.
Speaker Change: Driving benefits from that.
Speaker Change: There is opportunities to benefit alongside.
Speaker Change: Putting our thoughts together on that.
Speaker Change: For weeks to decide what we're going to do but looking at I think the extent to which they can make a good financial that has on Unix spices. Canadian It is difference as I said luxury products that we see in the U S to more.
Rob Koldrick: There are more opportunities to drive it. Rob, you've got a bit more experience. I don't know whether you want to just direct me to it. Yeah, same. I mean, the Super Enelotto product that we've got at the moment, Clark, has been, you know, performed fantastically well for the C-SAL business. You know, it's got a huge customer base. When you look at the lotto product, it's quite different to Super Enelotto. There's more of a regional bias to it. Super Enelotto tends to be a national game for us. You look at the lotto, there's 21 million Italian people playing it every week, which is 40% of the population.
Speaker Change: More opportunities so Jonathan when you put a bit more expenses that we deal with it.
Speaker Change: Yes.
Speaker Change: The same principle.
Speaker Change: So when you talk about swaps as it's been.
Speaker Change: Well, let's see south business, it's got a huge customer base when you look at.
Speaker Change: The multi products.
Speaker Change: It's quite different from Superenalotto and Thats more of a regional bias towards superenalotto tends to be a natural gas price that you look at the loss of that 21 million Italian playing every week, which is 40% of the population.
Rob Koldrick: You know, that's a lot. So we think that's a huge opportunity there. The numbers make sense. We're looking quite close now.
Speaker Change: So good luck.
Speaker Change: We think that's a huge opportunity there.
Speaker Change: The numbers makes sense, it's something we're looking quite close soon.
Brandt Montour: Thank you. Our next question comes from the line of Brandt Montour with Barclays. Please go ahead. Hello, everybody. Thanks for taking my question. So your way is rolled out to a big portion of the system. I know it's been a very light touch with what you've put out there so far versus what you know, you have aspirations to put out there eventually throughout through that product.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of branch Mine Tour with Barclays. Please go ahead.
Speaker Change: Hello, everybody and thanks for taking my question. So your way is rolled out to a big portion of the system I know, it's been a very light touch with what you've put out there so far versus what you had aspirations to put out there eventually throughout through that product.
Peter Jackson: What has the early learnings been with what you've put out? Give us an update on that product. I can talk a little bit about some of what we saw in the Super Bowl where the product was, you know, was available. We didn't, you know, particularly market this aggressively. We saw around, you know, one in 20 customers use the product of the Super Bowl. I think about 90% of the bets that people placed were bets that they couldn't have done without utilizing the customization that's available within the Your Way product. So, you know, we're seeing, and I think it's, I think around 25% of the customers have placed parlay bets with more than 10 legs.
Speaker Change: What how has the early learnings been with what you've put out.
Speaker Change: Give us an update on that project. Please.
Speaker Change: I can talk a little bit about some of what we saw.
Speaker Change: In the Super Bowl, whether products was available we didnt kick came off this aggressively.
Speaker Change: We saw our SD Wan and <unk> customers.
Speaker Change: Use the products of the Super Bowl I think.
About 90% of the fact that people placed we're back so they can sit down with that equalizing.
Speaker Change: The capitalization that's available within DIY products.
Speaker Change: We're saying that.
Speaker Change: And I think it I think around 25% of the customers that placed.
Speaker Change: That's more than 10.
Peter Jackson: So, you know, we're seeing really strong engagement with it. People are really enjoying the extent to which they can customize and find bets that, you know, they couldn't have done otherwise. You know, we're excited to see what we can do with this product as we continue to evolve it. You need to remember, you know, we're solving two very complex things with Your Way. One is just an enormous expansion of markets that become available for customers and finding ways of merchandising and simplifying that back to customers so we can give them what they want to bet on quickly, and it's actually managing all the risk associated with that.
Speaker Change: Seeing really strong engagement that people are really enjoying the extent to which they can customize and fine.
Speaker Change: Find bets that they couldn't have done otherwise we're excited to see what we can do this product as we continue to evolve it each of them.
Speaker Change: Solving to very complex stainless grades that you wanted to just an enormous expansion of.
Speaker Change: Market from available.
Speaker Change: Finding ways in merchandising and simplifying that perhaps the customer so we can get them.
Speaker Change: That's one quickly and then secondly, managing all the risks associated with that.
Peter Jackson: And I think, you know, the team has done a great job in crafting that, but, you know, we've just been very thoughtful and careful in terms of how we roll this out to the customers.
Speaker Change: And I think he and the team have done a great job in cracking naphtha.
Speaker Change: A very fulsome Katharine says if highway accidents less with us.
Operator: Thanks for that, Peter. And just to follow up on HOLD, you gave structural HOLD calculation for the fourth quarter, 14.5%. Maybe you could talk about how you're thinking about HOLD for 25, given that fourth quarter number that you hit. It isn't far away from the 15% that you guys had sort of put out as a target for 27, recognizing there's some seasonality to it. Okay, great, thanks everyone.
Speaker Change: Thanks for that Peter and just a follow up on hold.
Speaker Change: Gave structural hole calculation for the fourth quarter of 14, 5%.
Speaker Change: Maybe you could talk about how youre thinking about hold 425, given that fourth quarter.
Speaker Change: Number that you had it isn't far away from the 15% that you got.
Speaker Change: <unk> had sort of put out a target for 'twenty seven recognizing there is some seasonality to it.
Brian: Yes, Thanks, Brian listen, we're not guiding specific claim on hold.
Brian: 2025, but what I would say as we laid out some targets structurally in the capital markets day back in September.
Brian: We're making pretty good progress towards that you can see that in the published data in 2024.
Brian: Feel like we've got a very good start in Q1 this year and we're very much tracking.
Brian: Those longer term targets that we set out so we're feeling quite sanguine about where the margins are.
Brian: Okay, great. Thanks, everyone.
Bernie Mcternan: Our next question comes from the line of Bernie McTernan with Needham. Please go ahead. Great. Thanks for taking the question. I wanted to ask on tax rates, you know, just dealing with Illinois in the second half of 24. What did you actually see on a gross impact and net impact?
Brian: Our next question comes from the line of Bernie Mcternan with Needham. Please go ahead.
Bernie Mcternan: Great. Thanks for taking the question wanted to ask on tax rates.
Brian: Dealing with Illinois in the second half of 'twenty.
Brian: 24, what did you actually see on a gross impact of net impact and was there any change in the competitive environment in the state because of the higher tax rates.
Rob Koldrick: And was there any change in the competitive environment in the state because of the higher Yeah, so let me pick that one up, Barni. So, you know, as we previously mentioned, within another week, we said there was going to be circa $50 million impact in 2024. And that would be 40 after mitigation. You know, it's broadly, you know, ended up resulting in a result for us that's in line with that. We previously said for 2025, we're expecting to be able to mitigate circa 50% gross impact. Yeah, that's still where we're thinking. So, you know, broadly, it's played out as we expected.
Brian: Yes, let me pick that one up.
Brian: As we've previously mentioned we've got underway, we set those can abate circa 50 million impact in 2024.
Brian: That would be 40 after mitigation.
Brian: It's broadly.
Brian: Ended up resulting in a set of results.
Brian: Thats in line with that.
Brian: We've previously set for 2025.
Brian: We're expecting to be able to mitigate.
Brian: 3% very soon but.
Brian: That's still where we're thinking.
Brian: So in a broad it's played out as we expected.
Rob Koldrick: understood then maybe just on the other side of regulation thinking about you know potential iGaming legalization would just love you know any updated thoughts here in terms of potential momentum The beginning of the year is always the time when we get a better read of what's going to happen over the course of the year. We don't want to dream something at this stage, but we're excited that we'll be launching in Missouri in the fourth quarter. You remember at the investor day, we talked about the fact that we anticipate getting a couple of percentage points of sports betting in each of the three years and one new iGaming state.
Brian: Understood and then maybe just on the other side of regulation thinking about potential gaming legalization would just love any updated thoughts here in terms of potential momentum in states.
Brian: The beginning of the year is always the time, when we get a better read on what's going to happen over the course of the year.
Brian: We don't want to.
James: James anything at this stage.
Brian: We're excited that we'll be launching in.
Brian: Missouri and the fourth quarter, if you remember at the Investor Day, we spoke to that department is that again, a couple of percentage points of sports betting in each of the.
Brian: Three years, and one new gaming States I think we remain.
Operator: I think we remain confident in that. Great, thank you both.
Brian: Okay.
Brian: Great. Thank you both.
Jordan Bender: Our next question comes from the line of Jordan Bender with Citizens. Please go ahead. Good afternoon, everyone. We're getting questions around handle growth slowing in the U.S. and then continuing into January. I believe Parlay handle growth comps are incredibly tough in the 4Q and the start of the year.
Speaker Change: Our next question comes from the line of Jordan Bender with citizens. Please go ahead.
Speaker Change: Good afternoon, everyone. We're getting questions Youre always handle growth slowing in the U S. And then continuing into January I believe poorly handled growth comps are incredibly tough into <unk> and to start the year anything else you could point us to to help US bridge from what we're kind of seeing today to your implied handle growth for that.
Rob Koldrick: Anything else you could point us to to help us bridge from what we're kind of seeing today to your implied handle growth for the full year?
Speaker Change: Full year and then the second question unrelated I have seen if you can expand on the broader strategy across South and Latin America. The region is pretty untapped by any flutter brand. So is the strategy there to kind of.
Peter Jackson: And then the second question, unrelated, I'm seeing if you can expand on the broader strategy across South and Latin America. The region's pretty untapped by any Flutter brand. So is the strategy there to kind of build your presence and brand in Brazil before potentially laying the groundwork to kind of further expand throughout the region?
Speaker Change: Build your presence and brand in Brazil, before potentially laying the groundwork to kind of further expand throughout the region. Thank you.
Peter Jackson: Thank you. Hi Jordan, why don't I just quickly deal with that Latin American question, you know, we're excited to be, you know, working with NSX, and we hope to get the deal closed next quarter. We've got a terrific team, and the opportunity to be able to bring the Flutter Edge to bear there with our products, expertise, technology, and other scale benefits, I think will be very exciting. As and when we find other opportunities, you know, across Latin America, we'll take them. You need to remember we're an Amazon business, so we're investing very heavily in organic customer acquisition, rate paybacks, you know, so 18 months, whether that's in iGaming or sports, you know, here in the US and other markets around the world, India, etc.
Speaker Change: Andrew why don't I, just quickly deal with that Latin American question.
Speaker Change: We're excited to be.
Speaker Change: Working with NSX from our heads together deal close next quarter.
Speaker Change: We've got a terrific team and the opportunities you've got to bring the susser etch to add that with that.
Speaker Change: Net product expertise technology.
Speaker Change: Other scale benefits I think will be very exciting.
Speaker Change: As and when we find other opportunities across Latin America will take each of them going out of the business that we're investing very heavily in organic customer acquisition and brand paybacks.
Speaker Change: Months.
Speaker Change: <unk> gaming all sports.
Speaker Change: In the U S and other markets around the World, India et cetera. We are also going to continue to do M&A.
Peter Jackson: We're also going to continue to do M&A, and we've got this billion dollars of share repurchase this year, so you know, M&A will continue to be an important part of our strategy, but you know, we have to make sure that it's the right opportunities for us in terms of delivering the right financial returns, and being able to bring the benefits from the Flutter Edge.
Speaker Change: We got this billion dollars of share repurchases.
Speaker Change: M&A will continue to be an important.
Speaker Change: Part of our strategy, but we have to make sure that that might.
Speaker Change: <unk> opportunities for us in terms of delivering the right financial returns.
Speaker Change: And our stance has been that benefits from the site selection.
Rob Koldrick: Yeah, picking up on your handle question, John, so, you know, Q4 handle trends were broadly, as we'd anticipated, so, 12% up in Q4. We're expecting Q4 to be lower than the previous quarters, partly due to the impact of state launches and some phasing around NFL games, but you look at Q4 specifically, it had one less NFL round, and it also lapped Kentucky, which moderated kind of the sequential growth. As I mentioned in my remarks, we also talked about some recycling benefits, but that's not enough to kind of offset the above. 2025 started really well, as we stated, and Q1 to improve year-on-year, as we lapped this kind of like-for-like calendar period.
Speaker Change: Yes, thanks for picking up on your hand, no question John.
Speaker Change: Q4 had them trends with broadly.
Speaker Change: We had anticipated.
Speaker Change: 12% up from Q4, we're expecting Q4 to be lower than the previous quarters, partly due to the impact of state launches.
Speaker Change: Anything around <unk>.
Speaker Change: <unk> specifically.
Speaker Change: One less NFL rounds.
Speaker Change: Lapsed, Kentucky, which moderates as kind of the sequential growth.
Speaker Change: As I mentioned in my remarks, we talked about.
Speaker Change: Restructuring benefits, but not enough to kind of offset.
Speaker Change: And 2025 started very well.
Speaker Change: State.
Speaker Change: Q1 has improved year on year as we lap this come in like for like calendar period. So yes, we're quite pleased I think the last part last matches, we don't really kind of obsessed about.
Rob Koldrick: So, yeah, we're quite pleased. I think the last point worth mentioning is we don't really kind of obsess about handle, can be inflated by promotions and parlay penetration, which we're obviously keen to keep moving the dial on, tends to be a bit of a headwind to handle at times as well, but we're pleased with where it's trending.
Speaker Change: That can be affected by promotions.
Speaker Change: Yeah, Paul Hey, penetration, which were obviously significant making that tends to be the headwinds the ambulance volumes as well, but we're pleased with where shrinking.
Operator: I appreciate the commentary. Thank you.
Speaker Change: I appreciate the commentary thank you.
Paul Ruddy: Our next question comes from the line of Paul Ruddy with Davey. Please go ahead. Hi, good evening guys.
Speaker Change: Our next question comes from the line of Paul ready with David. Please go ahead.
Paul: Hi, good evening guys.
Paul Ruddy: Just two questions for me, just firstly on the Italy acquisition in tonight, just could you give any a little bit more detail maybe on the timing of that coming in and just the second part of it looks like that business may have lost some share in the second half of 2024, you know just how quickly do you think when you when you absorb that business you can kind of start to turn that around and get growth back and then as just as a quick follow on from that just if you can give any broad guidance on the expected contribution from the two acquisitions in 2025 and a half year basis.
Paul: Two questions from me, just firstly, obviously acquisition and so just could.
Paul: Could you give any little bit more detail, maybe on the timing of that coming in and just the second part of it looks like that business may have lost some share in the second half of 2024.
Paul: Just how quickly do you think when you absorb that business you can kind of start to turn that around.
Paul: Okay grows back and then just as a quick follow on from that just if you can give any broad guidance on expected.
Paul: <unk> from the two acquisitions in 2020 saw even a half year basis.
Paul: Okay.
Peter Jackson: Yeah, thanks, Paul. So, I can pick up on that. So, we're still on track for Q2, I hope, with the SNAI completion. You know, as you've noted in the Italian market share data, you know, with our C-Cell brand, we've been doing very well. So, we've been taking the share. So, you know, we're keen to get the SNAI deal completed and give them access to our products, capabilities, and the Flutter Edge, and also get on with delivering some of these synergies, which we're confident we'll be able to start realizing those quickly. With regards to the numbers around the acquisitions, you know, as previously stated, in Brazil, we think that NSX, you know, there'll be up to $100 million of EBITDA losses this year.
Speaker Change: Yes, Thanks <unk>.
Speaker Change: Pick up on that so we're still on track for Q2.
Speaker Change: This noise completion.
Speaker Change: The notes at an Italian market share that you've seen it.
Speaker Change: With our <unk> brand, we've been doing very well so we've been taking share.
Speaker Change: We're keen to get the snow ideal completed and give them access to our products, but I'd say some of the flux rich sake element of delivering some of these synergies, which will quite confident we'll be able to start realizing those quickly.
Speaker Change: With regards to the numbers around acquisitions and as previously stated in Brazil, We think the NSX.
Speaker Change: $100 million of EBITDA losses, this year, let's say, hoping to completion of NSX at some point in Q2 and yet neither as previously guided as well.
Peter Jackson: Also, hoping for completion of NSX at some point in Q2. And, you know, SNAI has previously died as well. But, you know, feeling very good about both acquisitions and, you know, keen to get into the building and both and start making a difference.
Speaker Change: Feeling very good about acquisitions.
Key to get into the building and start making a difference.
Paul Ruddy: Okay, great.
Speaker Change: Okay, great and if I could just ask a second one just to pick a date.
Paul Ruddy: And if I could just ask, just to unpick the handle growth question for the US a little bit more, is it right to think about a kind of a lower handle growth environment now as we go through 2025 as people, you know, as you look to more of those recreational high margin products that are maybe lower bed size and higher margin, you know, maybe up some upsides on hold percentages and lower handle growth, or how should we think that through? Is there kind of any broad guardrails you think about to handle growth? I think, you know, I've come back to the point I just mentioned, Paul, which is we don't obsess about Handle.
Speaker Change: I'll handle that question for the U S.
Speaker Change: A little bit more is is it right to think of it as kind of a lower hanging a growth environment.
Speaker Change: Through 2020, followed Stifel.
Speaker Change: As you look to more of those recreational high margin product.
Speaker Change: So there maybe lower best sites and higher margin.
Speaker Change: Maybe you have some sites.
Speaker Change: Thanks, Chad sudden say lower how does the growth or how should we think that through.
Speaker Change: <unk> I'm, sorry trials do you think.
Speaker Change: <unk> growth.
Speaker Change: Yeah.
Speaker Change: I think to come back to the points I, just mentioned, which is we don't obsess about Pandora.
Rob Koldrick: We're quite happy with where Handle's trending. But, you know, you can artificially inflate that with promotions and other things. And actually, if you look at the, you know, underlying momentum we've got within the business in revenue, which is, you know, the key KPI that we look at, it's very strong. We're very pleased with it. So, as I said, you know, in Q4, there was a reason for sequentially why the trend was slightly lower, but because we were happy with where the business is trending. That's great, thanks guys.
Speaker Change: We're happy with where it was trending.
Speaker Change: But you can artificially inflate that with promotions and other things and actually if you look at that.
Underlying momentum within the business.
Speaker Change: <unk>, which is the key kpis, we look at it is very strong and we're very pleased with that.
Speaker Change: In Q4 of those reasons that sequentially, while the trend was slightly lower but because we've kicked off this year, but really happy with where the business is trending.
Speaker Change: Okay. That's great. Thanks, guys.
Speaker Change: Thanks, Paul.
Dan Politzer: Our next question will come from the line of Dan Politzer with Wells Fargo. Please go ahead. Hi, Peter and Rob. Thanks for taking my questions. First, I know you guys gave a lot of great detail on the U.S. If I look at your kind of normalized revenue EBITDA for 2024 and 2025, it looks like flow-through is in the low 40s. Is there any way to kind of give us a little bit additional color, whether it relates to gross margins and being able to get some additional upside there relative prior year or even leveraging kind of some of the fixed OPEX buckets?
Speaker Change: Our next question will come from the line of Dan Pulitzer with Wells Fargo. Please go ahead.
Dan Pulitzer: Hi, Peter and Rob Thanks for taking my questions.
Speaker Change: Firstly I know you guys gave a lot of great detail on the U S.
Speaker Change: If I look at your kind of normalized revenue EBITDA for 'twenty, three and for 'twenty, sorry for $24 25, it looks like flow through is in the.
Speaker Change: The low Forty's is there any way to kind of give us a little bit additional color, whether it relates to gross margins and being able to get some some additional upside there relative to the prior year or even leveraging kind of some of the fixed opex buckets.
Rob Koldrick: Any additional detail would be helpful. Thanks.
Speaker Change: Any additional detail would be helpful. Thanks.
Paul Ruddy: Dan, is that the only question you had, or, um... Uh, no, my follow-up is just another one on the Italian lottery. Um, any puts and takes as you think about that concession, whether joining the, you know, existing concessionaire versus maybe competing against that incumbent in the bidding process, just how you're kind of thinking about that high level would be great.
Does that any question you had.
Speaker Change: No Mike My follow up is just another one on the Italian lottery.
Speaker Change: He puts and takes as you think about that concession whether joining the existing concessionaire versus may be competing against that incumbent in the bidding process, just how youre kind of thinking about that high level would be great.
Speaker Change: Okay.
Peter Jackson: We're not going to talk about our bidding strategies, they're commercially sensitive. We will be very, the rest of the show will be very disciplined, and we'll, you know, the extent that we go ahead, we will, you know, put on as good a show as we can. Yeah, so it sounds like you dropped through, question, I mean, there's a number of dynamics playing into this as Weatcroft's sort of stuff, but, you know, you've got the existing states which are maturing, and with the maturity of those states, you might see some lower handle, but you're going to see higher net revenue as the pilot penetration increases.
Speaker Change: We're not going to talk about that.
Speaker Change: <unk> strategy is that commercially sensitive.
Speaker Change: I think we will be very.
Speaker Change: Rest assured it will be very disciplined and we will.
Speaker Change: Extended we got ahead, we will put on that.
Speaker Change: It's going to show as we can.
Speaker Change: Yes. So in terms of your drug for your question I mean, there's a number of dynamics playing this business. We purchased in total stock picking a couple of existing states, which are maturing and with the maturity of those states you might see some lower handle that you're going to see higher net revenues partly penetration increases.
Rob Koldrick: Yeah, one thing that's important to say is actually we are delivering operating leverage across all lines, and you can see that in P&L and Q4, and we expect that trend to continue into 2025. So, you know, we're clearly making progress on cost of sales and marketing towards those targets that we set out in 2027. I think the last point is, you know, I said we don't obsess about handle, we don't obsess about drop through, even sometimes it isn't the best metric to look at. You know, we prefer to focus on revenue and EBITDA on those targets that we laid out at the capital markets.
Speaker Change: One thing that's important to say is actually we are delivering operating leverage across the line as you can see that.
Speaker Change: Now in Q4, we expect that trend to continue into 2025, we clearly making progress on our cost of sales.
Speaker Change: Marketing towards those targets that we set out in 2027 I think the last point is.
Speaker Change: I said, we don't obsess about handling we don't obsess about drop through even sometimes isn't the best metric to look at.
Speaker Change: We prefer to focus on revenue and EBITDA on those targets that we laid out at the capital markets day.
Operator: Got it. Thank you so much.
Speaker Change: Got it thank you so much.
Operator: Thanks, Ben.
Speaker Change: Thanks Pat.
Jed Kelly: Our next question comes from the line of Jed Kelly with Oppenheimer. Please go ahead. Hey, great. Thanks for taking my question. Just circling back on Handle because we've been getting a lot of questions on it. You know, just when we look at it, where your iGaming growth is really strong, we are seeing some Handle deceleration. So is that some of your better, higher value players choosing to play iGaming over sports betting? Is there anything else out there?
Speaker Change: Our next question comes from the line of Jed Kelly with Oppenheimer. Please go ahead.
Jed Kelly: Hey, great. Thanks, Thanks for taking my question just circling back on handle the beginning a lot of questions on it.
Jed Kelly: Just where where we when we look at it where you're I gaming growth is really strong we are seeing some handled acceleration. So is that some of your your better higher value players choosing to play our.
Jed Kelly: Gaming over.
Jed Kelly: Over sports betting or is there anything else.
Peter Jackson: And just on the your way parlay, just to roll that broader, just to get a broader rollout, are you more concentrating more on the merchandising? Or is it more still on the risk management? Thank you.
Jed Kelly: Out there and then just on the your way par life just to roll that broader just to get a broader rollout.
Jed Kelly: Are you more concentrating more on the merchandising or is it more still on the risk management.
Jed Kelly: Yeah.
Peter Jackson: Hi Jed, I think I can talk a little bit about the Your Way products. I think I can make a comment on iGaming and I'm sure Rob will have some follow-up there, but yeah, on the Your Way products, we've got to get the merchandising right from a customer perspective. So the user experience of having a vastly increased array of products can become overwhelming and we have to make sure it isn't. So I think the team are doing a really nice job on some of the user experience that we've made available. It's worth remembering that I remember being in Australia when we launched the multi-revolution that it was in 2016 and here we are nine years later still iterating and developing the product.
Jed Kelly: Yes, I think the.
Jed Kelly: I can talk a little bit about the <unk> products.
Jed Kelly: I think.
Jed Kelly: Make a comments online gaming and.
Jed Kelly: Sure.
Jed Kelly: <unk>.
Jed Kelly: Follow up David.
Jed Kelly: On the on the <unk> products.
Jed Kelly: We are putting it in the merchandising drive for the customer.
Jed Kelly: The user experience.
Jed Kelly: A fast increase that rate of products have become overwhelming and we have to make sure. It happens.
I think the team is doing a really nice job on the user experience that we have made available but as <unk> noted taking batstone right new products. If you actually haven't thought about twice Haemus management rights at the same time I'd say equally so all of these problems simultaneously, it's very complex.
Jed Kelly: The team is doing a brilliant job and we're really excited to see where we can take this product.
Jed Kelly: It's worth remembering that I remember being in Australia, where we launched a.
Jed Kelly: Multi resolution that it was that in 2016 in Hayward.
Jed Kelly: The other thing the products.
Rob Koldrick: I'm sure Your Way is something which will be similar.
Speaker Change: Im sure Youre aware of something which is going to.
Jed Kelly: It will be similar.
Rob Koldrick: I know you want to talk about the iGaming. Yeah, I mean in terms of your first question, Jed, we're not seeing that at all in terms of trends we're going to take away from sports, but I think as Peter outlined earlier, you know, we've had some fantastic, you know, product developments in iGaming which are really kind of driving the performance of iGaming forwards. We're really pleased with that. We're also continuing to see, you know, excellent paybacks in both Sportsbook and iGaming, you know, arguably even better in iGaming. You know, the question for us is how much we keep, you know, really kind of investing behind that.
Jed Kelly: But anyway, even without the online gaming, yes, I mean, it sounds expense questions. Yet we're not seeing that so in terms of trend Barton from sports, but I think as Peter outlined earlier.
Jed Kelly: Fantastic product developments in our gaming, which are really kind of driving the performance of our gaming forwards.
Jed Kelly: Pleased with that.
Jed Kelly: We're also continuing to see excellent paybacks and buy sports per catalog games occupy even back through gaming, yes. The question for US is how much we keep.
Jed Kelly: Really kind of investing behind that.
Rob Koldrick: We've, you know, we've got Asaf, who's our Casino Director and Fanjoys, he's constantly asking me to invest more, so it's a good challenge to have, but, you know, we're really pleased with the performance of both, so there's definitely not a drag on Sportsbook from iGaming. Thank you.
Jed Kelly: Go ask that too so.
Jed Kelly: Casino direct through fine jewelry, skus comfortably offsetting made sense to invest most of that's a good challenge to have forget we're really pleased with the performance of FX, but that's definitely not on track.
Jed Kelly: More spectrum.
Jed Kelly: Thank you.
Barry Jonas: Our next question will come from the line of Barry Jonas with Truist Securities. Please go ahead. Hey guys, thanks for taking my questions. Given the Illinois mitigation efforts you've seen to date and you expect this year, can you kind of offer any general guidelines around the mitigation targets we could see as more states talk about increases? Is 50% sort of a good baseline target? Should it come to that? Thanks.
Speaker Change: Our next question will come from the line of Barry Jonas with true with Securities. Please go ahead.
Speaker Change: Hey, guys. Thanks for taking my questions given the Illinois mitigation efforts you've seen today that you expect this year can you kind of offer any general guidelines around the mitigation targets, we could see as more states talk about increases is 50% sort of a good baseline target should it come to that.
Speaker Change: Thanks.
Rob Koldrick: I think it's a good starting point. We need to remember that as the largest operator in the market by a long way, I think we're in the best place to mitigate this, but I think as a rule of thumb, it's all about starting points. Great, that's really helpful.
Speaker Change: I think it's a good.
Speaker Change: It's a good starting point.
Speaker Change: We need to remember that has the largest operator in the market by.
Speaker Change: By the way I think we're the best spaces as Michigan.
Speaker Change: I think as I said, we would've thought about something.
Speaker Change: Great. That's really helpful. And then just a general follow up do you think there was anything structurally different about the NFL. This past year that led to abnormal holds and I guess did you learn anything from the season that you could take with you in the future. Thanks.
Rob Koldrick: Then just a general follow-up. Do you think there was anything structurally different about the NFL this past year that led to abnormal holds? And I guess, did you learn anything from the season that you could take with you in the future? Thanks. More favourites won than would normally have happened, so I think that's a simple answer. All right. Thanks so much, guys. Appreciate it.
Speaker Change: More favorite slot and then number normally it happens.
Speaker Change: Assistance.
Speaker Change: Alright, thanks, so much guys I appreciate it.
Operator: In the interest of time, we ask that callers limit themselves to one question.
Speaker Change: In the interest of time, we ask that callers limit themselves to one question. Our next question will come from the line of Jeff Stein, Joe with Stifel. Please go ahead.
Jeff Stanchel: Our next question will come from the line of Jeff Stanchel with Staple. Please go ahead. Hey, great. Good afternoon, everyone. Thanks for taking our question.
Jeff Stein: Hey, great. Good afternoon, everyone. Thanks for taking our question.
Peter Jackson: Peter, can you just talk a bit on the trajectory of promotional reinvestment in the U.S. heading into 2025? Do you expect reinvestment as a percentage of handle to drift higher as you allocate or share back a portion of your structural hold rate expansion back with players? And if that is the case, can you just add some color on how you think about derivative market share impact as your reinvestment strategy starts to bifurcate from peers who do be managing promos either flat or lower in 2025? Thanks.
Jeff Stein: Peter can you just talk a bit on the trajectory of promotional and reinvestment in the U S. Heading into 2025 do you expect reimbursement as a percentage of Handel.
Jeff Stein: Drift higher as you allocate our share back a portion of your structural hold rate expansion back with with players and if that is the case.
Jeff Stein: Can you just add some color on how you think about derivative market share impact as your reinvestment strategy starts to bifurcate from peers, who do seem to be managing promos, either flat or lower in 2025.
Peter Jackson: The thing that we do, which is true for acquisition as well as deployment of generosity, is we look through a very, you know, we're very disciplined in terms of how we allocate it and spend it. So, you know, we want to see a good return. We talk about the two-year payback from a marketing acquisition perspective, and here we're 18 months. It is true for deployment of generosity as well. Making sure it gets to the right customer and drives the right outcome is how we're really focused in the business. And that's what, that's how the team is set up to think about deployment.
Jeff Stein: The thing that we do which is true for acquisition as well as deployment of general space. We look Trifari network, we're very disciplined in sense of how we allocate and spend it. So yes, we want to see a good return.
Jeff Stein: You talk about the two year paybacks.
Jeff Stein: Paybacks morphine acquisition perspective.
Jeff Stein: Yeah. It has changed first deployments of generosity as well, making sure it gets to the right customer drives the right outcome is that we are really focused in the business.
Jeff Stein: That's how the team is set up we think about deployment of that very big.
Operator: It's our very big finance team.
Jeff Stein: Pilots in place.
Joseph Stauff: Our next question comes from the line of Joseph Stauff with Susquehanna.
Speaker Change: Great. Thank you. Our next question comes from the line of Joseph Stauff with Susquehanna. Please go ahead.
Peter Jackson: Please go ahead. Hi. Thanks, Peter, Rob. Just wondering how you think about the impact of your way, both on structural hold in the U.S. as well as, you know, your ability to kind of accelerate, say, handle growth. Just curious about, you know, do you see that as more accretive to your structural hold or what? I think that the types of benefits we'll drive from UWA are likely to be, as you say, like higher hold, I think we should get better engagement, increase customer frequency, I mean we might get all of them, we're excited to see what happens.
Speaker Change: Hi, Thanks, Peter Rob.
Speaker Change: Just wondering how you think about the impact of your way both on structural hold in the U S as well as you know.
Speaker Change: Your ability to kind of accelerate say handle growth.
Speaker Change: Just curious about.
Speaker Change: Do you see that is more accretive to your structural hold or what.
Speaker Change: I think the types of benefits will drive some.
Speaker Change: All likely to be as you say a lot higher holds yes, I think we should get better engagement increased customer frequency.
Speaker Change: All of them.
Speaker Change: We're excited to see what happens with it.
Speaker Change: Yeah.
Speaker Change: Okay.
Robert Fishman: Our next question comes from the line of Robert Fishman with Moffitt Nathanson. Please go ahead. Thank you. Good afternoon.
Speaker Change: Our next question comes from the line of Robert Fishman with Moffett Nathanson. Please go ahead.
Robert Fishman: Thank you hi, good afternoon.
Peter Jackson: I'm curious if you guys are seeing any signs of consumer weakness in your older vintage U.S. states for either sports betting or iGaming and then any lessons that you can take from the international markets that you can apply to FanTool if in fact we do see any sort of macro U.S. headwinds in the coming quarters. Thanks. Robert, in terms of macro impact, traditionally our experience is that the business is actually very defensive. So when we think about the impact of the financial crisis or other macro impacts, the business has actually been very defensive in the face of those.
Robert Fishman: Curious if you guys are seeing any signs of consumer weakness in your older Vintage U S States I'm, sorry, either sports betting or I gaming and then any lessons that you can take from the international markets that you can apply to fan dwell. If in fact, we do see any sort of macro U S headwinds in a couple of quarters. Thanks.
Robert Fishman: Yes.
Robert Fishman: Tens of Metro impact traditionally.
Robert Fishman: Clearances that that business is actually very defensive.
Robert Fishman: When we think about the path.
So by that I am not sure impacts the business. It has actually been very defensive interface device and say, but we're not seeing any any any bearing on our historical tablets in.
Peter Jackson: We're not seeing any bearing on our historical cohorts here in the US, but I wouldn't expect to. The same applies for international. So from my experience in international, businesses tend to be very resilient in times of economic downturn. So we're not seeing any signals at all at the moment, despite the various volatilities in the US economy.
Robert Fishman: In the U S, but she's Pepsi.
Robert Fishman: The same applies for international to say that my experience.
Robert Fishman: Spirit's International business it tends to be very resilient in times of economic downturns.
Robert Fishman: We're not seeing any signals of total demand despite.
Robert Fishman: Got the various volatilities in the U S and continental.
Robert Fishman: Okay.
Chad Bayman: Our next question comes from the line of Chad Bayman with Macquarie. Please go ahead. Hi, good afternoon. Thanks for taking my question. I wanted to ask one on the U.S. business. I know there's some broadcast partnership deals that could be coming to an end, and these are always fluid. And, you know, particularly on American football, you guys have participated when it made sense.
Speaker Change: Our next question comes from the line of Chad Beynon with Macquarie. Please go ahead hi, good.
Speaker Change: Afternoon, Thanks for taking my question.
Speaker Change: Wanted to ask one on the U S business I know, there's some broadcast partnership deals that could be coming to an end in and these are always fluid and.
Speaker Change: Particularly on an American football you guys have participated when it when it made sense. So I'm wondering if you could elaborate a little bit in terms of.
Peter Jackson: So I'm wondering if you could elaborate a little bit in terms of how you view media rights, partnerships, if anything has really changed as the economics of these contracts is pretty dynamic. Thanks. I think the team have done a brilliant job over the years of negotiating good contracts. I think we have always been very disciplined in how we tackle these, and we've been able to use our global experience to help us identify which ones are going to be most attractive. I think the There is a lot of change happening at the moment. You know, we're all aware of the fragmentation of rights and the increase in streaming.
Speaker Change: How you view media rights partnerships, if anything has really changed as.
Speaker Change: The economics of these contracts.
Speaker Change: Pretty dynamic thanks.
Speaker Change: I think the team has done a brilliant job over the years.
Speaker Change: That negotiating good contracts I mean, I think we.
Speaker Change: <unk> always been very disciplined in half.
Speaker Change: We believe that we've been able to use our global experience to help us identify and which ones are going to be most attractive.
Speaker Change: I think the there.
Speaker Change: There is a lot of change happening at the moment.
Speaker Change: The way I would the fragmentation right suddenly increase in streaming segment, we're thoughtful about how we continue to ensure that all customers can access the sports that one so what to watch for.
Peter Jackson: So, you know, we're thoughtful about how we continue to ensure that our customers can access the sports they want to watch. But, you know, I'm pleased with the portfolio we have. Our scale helps us in terms of investing to acquire the right types of rights. And we've got a bigger customer base.
Speaker Change: I would say, yes, and pace of the portfolio we have.
Speaker Change: At our scale helps us in terms of investing to acquire the right types of it right. So we've got a bigger customer base, we can start with <unk>.
Peter Jackson: We can spermatize those things across.
Speaker Change: Possibly capable.
John Decree: Our next question comes from a line of John DeCree with CBRE. Please go ahead. Hi, thank you. One question on Brazil.
Speaker Change: Our next question comes from the line of John Decree with CBRE. Please go ahead.
John Decree: Hi, Thank you.
Speaker Change: One question on Brazil.
Peter Jackson: I'm not sure if I missed it earlier, but I know it's only been a couple of months since the regulated market launch, but you know, curious if you could walk us through kind of your investment strategy, kind of in a in a launch, and is that happening already? Or would we expect, you know, more investment when the NSX acquisition closes later this year? Thank you.
Speaker Change: I'm not sure if I missed it earlier, but I know, it's only been a couple of months since the regulated market launch, but curious if you could walk us through kind of your investment strategy.
Speaker Change: Kind of in a in a launch and is that happening already or would we expect more investment when yes NSX acquisition closes later this year. Thank you.
Peter Jackson: John, it's worth remembering that Brazil is not like the launch of a U.S. state. There was a very extensive market in operation before regulation arrived. There was a lot of advertising, principles of payment opportunities. It was a very functioning market.
Speaker Change: John It's worth remembering that Brazil is not like the launch of our U S States.
Speaker Change: Those are very expensive.
Speaker Change: Market in operation.
Speaker Change: For regulation of online, there's a lot of advertising.
Speaker Change: Yes principal payment opportunities David It was a it was a nice step.
Speaker Change: Functioning market.
Rob Koldrick: And so it's not going to be like the launch of Missouri will be in Q4, where there'll be a big push from an acquisition perspective. Well, you may comment on that, you've got experience of Brazil from the international. Yeah, we've got lots of experience of Brazil from both sides. But the headline is we're still working to the $100 million in terms of EBITDA losses for this year. And we might see some slight phases and differences on that depending on when the deal will complete.
Speaker Change: And so I'm not going to be in line at the door.
Speaker Change: In Missouri will be in Q4, whether.
Speaker Change: They push from asset acquisition with dispatch it well.
Speaker Change: Well, if you make Toyota but experience.
Speaker Change: Familiar international Yes, we've got lots of experience.
Speaker Change: That's fair.
Speaker Change: But the headline is we're still working to the $100 billion in terms of EBITDA losses for this year and we might see some slight phasing differences on that depending on Wednesday.
Speaker Change: We will complete.
Rob Koldrick: And the Brazilian football season doesn't actually start until the end of this month. So we need to see what happens then.
Speaker Change: The Brazilian football season doesn't actually start until the end of this month's waiting to say what will happen but.
Peter Jackson: There is going to be in this first 12 to 18 months intense competition for media assets. There were up to 200 different companies that applied for a license. We think the market will start to shake out quite quickly. But I think given our track record, given our capabilities, given our products, we're very confident of our ability to succeed in the Brazilian market.
Speaker Change: Yes, there is guidance debate and discuss.
Speaker Change: 12 to 18 months of intense competition from either a sense yet that we're up to 200.
Speaker Change: Companies that applied for a license we think the market will start to shake out quite quickly.
Speaker Change: Given given our track record given our capabilities given given all the products.
We are very confident of our ability to succeed in the Brazilian market. We're very excited to get started with the kind of thing.
Peter Jackson: And we're very excited to get started with an investment.
Ben Shelley: Our next question comes from the line of Ben Shelley with UBS. Please go ahead. Hiya, if we take your normalised revenues in EBITDA for the US in 2024, they were meaningfully in excess of your original guidance in March last year. Can you just talk us through what you're forecasting underappreciated last year? And to that effect, where do you see potential upsides to guidance in the US in 2025?
Speaker Change: Our next question comes from the line of Ben Shelly with UBS. Please go ahead.
Hi.
Speaker Change: If we take your normalized revenues and EBITDA off the U S. In 2024, they were meaningfully in excess of your original guidance in March last year can you just talk us through what Youre forecasting underappreciated last year and so that's a fact why do you see potential upside to guidance in the U S. In 2025.
Peter Jackson: I'm happy to give you a bit of a flavour, Ben and Ian, Rob, all definitely want to follow up. We ended the year with a much bigger business than we anticipated in terms of the number of customers we had on the platform, but particularly the progress we made in iGaming and those things really helped support the numbers that you referenced. I think it's also fair to say that we made considerable progress on the Parlay perspective, which helped support the structural whole. All the things that we talked about actually, but the investors, David and Rob, I don't know if they need more to explain.
Speaker Change: I'm happy to give you a bit of a flavor ban.
Speaker Change: <unk>, let's just follow up.
Speaker Change: We knew we ended the year with a much bigger business than anticipated.
Speaker Change: In terms of the number of customers, we had on the platform, but particularly the private estimated gaming and those things really house.
Speaker Change: Yes.
Speaker Change: That's the number that you referenced I think it's also fair to say.
Speaker Change: We made.
Paul: Considerable progress unless it Paul.
Speaker Change: Despite some of it's simple.
Speaker Change: Simple as that structural how all the things that we spoke to your balance sheet.
Speaker Change: At the Investor day about why that was done that you can put it.
Speaker Change: I think thats the key piece of it ultimately we're very pleased with the progress that we're making towards those long term targets. We've got off to a good start I think.
Rob Koldrick: I think that's a key point, Peter. I mean, ultimately, we're very pleased with the progress that we're making towards those long-term targets. We've got off to a good start. I think there will be different phases within this that, as and when we see opportunities to continue investing and continue growing the business, the kind of paybacks that we're experiencing, we'll continue to do so. But it's a good start and we're on track to get towards what we outlined for 2027 at the Investor Bank.
Speaker Change: There will be different phases within list.
Speaker Change: When we see opportunities to continue investing and continue growing the business at the kind of paybacks that we're experiencing will continue to do so.
Speaker Change: It's a good start and we're on track.
Speaker Change: Get towards what we outlined for 2027 Investor day.
Operator: Thank you, team.
Speaker Change: Thank you Thomas.
Adrien de Saint Hilaire: Our next question comes from the line of Adrien De Saint Hilaire with Bank of America. Please go ahead. Yes, hi, good evening. Compose a bit for us, the growth, the 22.5% U.S. growth on the line. I give me an online sports bet.
Speaker Change: Our.
Speaker Change: Next question comes from the line of Adrienne to Saint Hilaire with Bank of America. Please go ahead.
Speaker Change: Yes, hi, good evening I'm, just curious if you could decompose a bit for us the gross the 22, 5% U S growth on the line you expect between them between all gaming and online sports betting.
Rob Koldrick: We're not going to provide that to our trade agencies, it's the aggregate for the US business to not break any damage in sports and games. Okay, cool. Thank you.
Speaker Change: We're not against that provides.
Speaker Change: Hi, Joe.
Speaker Change: Inaccurate.
Speaker Change: Sinopec Cape averaging Sportsnet.
Speaker Change: Okay cool thank you.
Ryan Sigdahl: Our final question will come from the line of Ryan Sigdahl with the Craig Hallam Capital Group.
Speaker Change: Our final question will come from the line of Brian <unk> with Craig Hallum Capital Group. Please go ahead.
Peter Jackson: Please go ahead. Hey, thanks for sticking me in guys. Just a bigger picture question to end.
Speaker Change: Hey, Thanks for taking me in guys just a bigger picture question to and looking at sports betting. The last couple of years have really been focused on parlays enhancing the offerings there.
Peter Jackson: Looking at sports betting, the last couple years have really been focused on parlays, enhancing the offerings there, which has been talked a lot about, but curious what the focus on the sports betting product roadmap would be for 2025. And even if you want to go beyond that. Thanks. You might think we've only been talking about parlays in 2024, but as I said earlier, the revolution really started in 2016. The Italian team are very excited about the introduction of the parlay product to that market. It's been difficult to deliver from a regulatory perspective, but we're making progress.
Speaker Change: It's been talked a lot of bulk, but curious what the focus on the sports betting product roadmap would be for 2025, and even if you want to go beyond that thanks.
Speaker Change: You might think we've been talking about I apologize.
Speaker Change: And as I said earlier that.
Speaker Change: The resolution really started it in 2016.
Speaker Change: Italian team very excited about the introduction of the spotlight products without long historically, it's been difficult to deliver from a regulatory perspective, but we're making progress.
Peter Jackson: There's some great things that the UK team are doing, and of course, we've got the URWAY stuff in the US. There's a lot of products coming to bear for customers. I think the team do a brilliant job in terms of keeping our customers engaged and excited. This is true for what we do in our gaming as well. You have to remember, customers are really interested and engaged in what's happening from a player perspective. What we can do with all the new markets and things from a parlay perspective is exciting. Of course, there's a whole heap of things around generosity, which we're evolving as well.
Speaker Change: Right things that the UK team are doing and of course, we bought <unk> stock.
Speaker Change: And in the U S a.
Speaker Change: All of those.
Speaker Change: There's a lot of products coming.
Speaker Change: Yeah.
Speaker Change: Net to <unk> customers I think the team.
Speaker Change: Related Joe insensitive.
Speaker Change: Keeping our customers engaged and excited and.
Speaker Change: And this is true for what we do in our gaming as well.
Speaker Change: We have one customer.
Speaker Change: Customers are really interested and engaged.
Speaker Change: My perspective on what we can do with all the new markets, partly because thats the business. So I think both as a whole piece of things around generosity.
Speaker Change: And as well.
Peter Jackson: I referenced some of the things we're doing from an iGaming perspective earlier. There's a lot of exciting things to come.
Speaker Change: I referenced some of the things we think from a gaming perspective.
Speaker Change: There's a lot of exciting things yeah, I think maybe a couple of other things to add.
Peter Jackson: I think maybe a couple of things to add. We're really excited about the live products. There's been a bunch of stuff this year in terms of NFL in-house game trackers, post-product improvements. People are really following the player narrative as well. We've developed player experiences where people can go and look at the last five game stats of the players. There's some really interesting stuff that the US team are doing, which is really the sports book forward. They're quite excited about what's to come in 2025.
Speaker Change: We're really excited about the development and life products.
Speaker Change: Yes, it's been a bunch of stuff this year incentive NFL inhouse getting truck is post products improvements that people are really following the plan our sip as well.
Speaker Change: We used about CNS player experiences, where I think we can go out and look at the last five games.
Speaker Change: <unk> had some really interesting stuff.
Speaker Change: The U S team are doing which is really driving the sports book forward.
Speaker Change: So I'm sure that what's to come in 2025.
Peter Jackson: Okay, well look, I think we've come to the end of the questions. Thank you very much, everyone, and I'm sorry we had to rush through the last half dozen or so of you, you didn't get a chance to ask the second question. Myself and our team are around to help you, but thank you all for your time, we very much appreciate it. That will conclude today's call. We thank you all for joining. You may now disconnect.
Speaker Change: Okay.
Speaker Change: I think we've covered today.
Speaker Change: At the end of the questions. Thank you very much <unk> summary.
Speaker Change: So we were asked to Russia.
Speaker Change: The loss in half does most savvy anything get chunks off of that question.
Speaker Change: Hey, what's up.
Speaker Change: Theme around to help you, but thank you will feel.
Speaker Change: I'm.
Speaker Change: Very much appreciate it.
Speaker Change: That will conclude today's call. We thank you all for joining you may now disconnect.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Okay.
Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [noise].