Flutter Entertainment plc

Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the Flutter Entertainment first quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star one again. Thank you. And I would now like to turn the conference over to Paul Timms, Group Director of Investor Relations. Paul, you may begin.

Hi, everyone, and welcome to Flutter's Q1 Results Call. With me today are Flutter CEO Peter Jackson and CFO Rob Koldrake. After this short intro, Peter will open with a brief summary of our operational progress. and then Rob will run through the Q1 financials and our updated guidance for 2025. We will then open the lines for Q&A. Some of the information we are providing today, including our 2025 guidance, constitutes forward-looking statements that involves risks, uncertainties and other factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors are detailed in our earnings press release and our SEC filings. In addition, all forward-looking statements are based on current expectations and we undertake no obligation to update any forward-looking statements except as required by law. 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. And I will now hand you over to Peter. Thank you, Paul.

I continue to be really pleased with how the scaling of our US business is driving a step change in the earnings profile of the group. Our international business is also demonstrating the benefits of scale and diversification with particularly strong performances in SEA and India. These factors combine to drive year over year net income and adjusted EBITDA growth of 289% and 20% respectively in Q1. Before I turn to the quarter's performance in more detail, I want to touch on some of the themes that have been at the forefront of discussions during the quarter. Firstly, the potential impact of any change to the broader economic outlook on our sector, in the US in particular. Our business is resilient. During previous periods of consumer pressure in our international markets, we saw no discernible impact on our businesses, and we have conviction that online sports betting and iGaming have strong defensive characteristics over the long term. Secondly, sports results. The nature of sports results will influence our quarterly results, as we have seen in NFL in Q4 and March Madness in Q1. But over time, these variations are transient and do not compromise our compelling growth model, a long-term value creation opportunity. In fact, if these ups and downs in sports results that makes sports so exciting and drives engagement. Thirdly, we're really excited about our revolutionary outcome-based pricing technology that will allow us to price and offer an almost infinite number of outcomes across the most relevant and immersive betting markets. YourWay is the first surfacing of this pricing capability to customers, and the results to date have been encouraging. The opportunities that this unlocks are unique and we believe create an amazing platform for long-term innovation for both our US and international markets. Fourthly, we're also closely monitoring the developments around futures markets and the potential direct and indirect opportunities for FanDuel to explore. We already operate the world's largest sports betting exchange, the Betfair Exchange, and we have vast experience in this space. And finally, our position as an AND business is clear to see as we completed another major milestone in the expansion of our portfolio in Italy with the acquisition of SNAI and the continuation of our buyback program. With strong organic performance and multiple levers to drive value creation, we remain incredibly confident in our long-term outlook. And turning to performance in the quarter, we're continuing to win in the US, powered by a world-class customer proposition with amps growing to more than 4.3 million in the quarter. From a sports book perspective, handle growth was in line with expectations and reflected the continued shift to higher revenue margin, the lower handle parlay and same game parlay products. Basketball handle growth was lower than anticipated, offset by growth in other sports. And we believe this handle softness is specific to the basketball market. And we have a number of commercial and product initiatives that will specifically enhance basketball engagement next season. As we move into the summer season, handle trends remain in line with expectations, with encouraging MLB trends. It's worth remembering that handle growth is just one driver of our long-term revenue growth. Alongside product-driven structural growth revenue margin expansion, new customer acquisition, higher retention, gaming cross-sell, wallet share gains, and promotional spend efficiencies, which all work to drive the most important output, our net revenue growth, and all before the benefit of any new state launches. Our proprietary pricing capability continues to drive our market-leading sportsbook product and drive our expected structural gross revenue margin progression, reaching 14.1% in the quarter. We had a great Super Bowl But overall, US sports results were nevertheless customer-friendly in the first quarter, driven primarily by an unprecedented number of winning favorites during March Madness. In iGaming, we go from strength to strength, with highlights including site-wide jackpots and even more exclusive content. We hit a million amps for the first time, demonstrating the strength of the Fangio iGaming proposition. This performance underpinned our clear leadership position, with sports betting and iGaming gross gaming revenue market shares of 43% and 27% respectively, and a 48% net gaming revenue sportsbook share. Performance across our international division continues to be positive, with year-over-year revenue growth of 3% constant currency. We are benefiting from our scale and geographic and product diversification, with good growth in our SEA region in particular. We were delighted to welcome SNAI into the group just last week, significantly adding to our scale in Italy, and we expect to rapidly realize both the operational and financial benefits of the combination. We recently submitted a tender for the Italian Lotto with majority position in a consortium with Scientific Games. We believe the merits of this deal are compelling in a market where we've demonstrated our extensive lottery experience due to the success of our Super Ener Lotto proposition. Performance within SEA has been very impressive, driven by CESA, which achieved record high Italian quarterly market share, 15.4%. And we're also seeing very strong growth in Turkey. In the UK, iSportsbook growth moderated from previous quarters, in part due to the very operator-friendly results in 2024, while iGaming growth remains strong. The migration of our Skybet customers to our in-house platform is progressing well. with over 25% of customers already migrated, an expected completion this quarter. The strength of our Romney business in India is once again visible now that a tax change in Q4 2023 has been lapped, delivering strong year-over-year revenue growth of 45% through continued disciplined customer and product investment. Within Australia, we continue to face into the rating industry structural challenges, We've been able to partly offset our adverse racing handle trends by expanding our sports structural gross win margin through ongoing product-led improvements. And we've received regulatory clearance and expect to complete the acquisition of NSX imminently, forming a new Flutter Brazil business and putting us in an enhanced competitive position in a fast-growing, newly regulated market. Combining a strong local management team, localized proprietary technology, and a local hero brand in BetNationale alongside our existing Betfair Brazil business and Flutter Edge capabilities will position us for success in this very exciting market. Overall, I'm pleased with our first quarter performance and remain extremely confident in the long-term fundamentals of our business. The global regulated market opportunity is significant and growing and Flutter is uniquely positioned to win. I remain excited by the opportunity for Flutter, and I look forward to continuing to execute on our key growth drivers over the remainder of 2025 and beyond. I will now hand you over to Rob to take you through the financials and our guidance.