01—Abstract
Summary
Summary of the 10-K filed March 26, 2024. Cited figures are marked; the original filing is the authoritative source.
Flutter Entertainment plc, filing under its name at the time of this 10-K, reported fiscal 2023 revenue of $11,790 milliona, up from $9,463 million in fiscal 2022 and $8,308 million in fiscal 2021.
The company posted a net loss of $1,211 millionb for 2023 (versus $370 million in 2022 and $757 million in 2021), with net loss attributable to Flutter shareholders of $1,222 million and a net loss per share of $(6.89). The loss was driven largely by a $725 million impairment of the PokerStars trademark recorded in sales and marketing expenses, a $165 million fair value loss on the Fox Option liability, and higher interest expense of $385 million. Adjusted EBITDA rose to $1,679 million (Adjusted EBITDA Margin of 14.2%) from $1,141 million, and Further Adjusted EBITDA reached $1,875 million (15.9% margin).
Segment results show the U.S. division as the largest and fastest-growing business, with revenue of $4,484 millionc (38.0% of group revenue) and Adjusted EBITDA improving to $65 million from a $(347) million loss in 2022. UKI generated $3,047 million of revenue with Adjusted EBITDA of $889 million, while International revenue was $2,812 million, largely reflecting the full-year consolidation of Sisal. Australia revenue declined to $1,447 million.
Cash and cash equivalents were $1,497 milliond at December 31, 2023, against long-term debt of $7,056 million. Operating cash flow was $937 million, and the company disclosed material weaknesses in internal control over financial reporting that remain under remediation. The company also began trading on the NYSE on January 29, 2024 under the symbol FLUT and acquired a 51% stake in MaxBet in January 2024.
The filing states that the company has not paid dividends since May 2020 and does not currently plan to pay dividends or conduct significant share repurchases, though it intends to return capital to shareholders once leverage is optimized. Key risks disclosed include ongoing UK Gambling Act review, the possibility that Fox exercises its option on an 18.6% FanDuel interest (with a stated option price of $4.3 billion), a tax investigation in Italy concerning PokerStars, and a pending Indian GST matter.
02—Key points
Key Highlights
- Revenue rose 24.6% to $11,790 million in fiscal 2023, with AMPs up 20.3% to 12.3 million.
- Net loss widened to $1,211 million, reflecting a $725 million PokerStars trademark impairment and a $165 million Fox Option fair value loss.
- U.S. division revenue reached $4,484 million (38.0% of group revenue), and its Adjusted EBITDA swung to $65 million from $(347) million in 2022.
- Adjusted EBITDA increased 47.2% to $1,679 million, with Adjusted EBITDA Margin expanding to 14.2% from 12.1%.
- Long-term debt totaled $7,056 million at December 31, 2023, versus cash and cash equivalents of $1,497 million.
- Management disclosed material weaknesses in internal control over financial reporting, with remediation ongoing.
- Shares began trading on the NYSE under FLUT on January 29, 2024, and no dividends have been paid since May 2020.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2023, Flutter Entertainment lost $0.10.
- Revenue$11.79B100.0%
- Cost of revenue−$6.20B52.6%
- Gross profit$5.59B47.4%
- Operating costs−$6.14B52.1%
- Operating income−$549.0M4.7%
- Interest, other & tax−$662.0M5.6%
- Net income−$1.21B10.3%
04—Financials
Financial Highlights
Figures from 10-KFY2023filed March 26, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $11.79B$9.46B | +24.6% |
| Cost of Revenue | $6.20B$4.81B | +28.9% |
| Gross Profit | $5.59B$4.65B | +20.2% |
| R&D Expenses | $765.00M$552.00M | +38.6% |
| Operating Income | -$549.00M-$88.00M | −523.9% |
| Interest Expense | $424.00M$216.00M | +96.3% |
| Net Income | -$1.21B-$432.00M | −180.3% |
| EPS (Basic) | $-6.89$-2.44 | −182.4% |
| EPS (Diluted) | $-6.89$-2.44 | −182.4% |
| Shares Outstanding (Basic) | 177.00M177.00M | 0.0% |
| Shares Outstanding (Diluted) | 177.00M177.00M | 0.0% |
05—Questions
Frequently Asked Questions
Why did the net loss increase in fiscal 2023 despite strong revenue growth?
The filing attributes the increase mainly to a $725 million impairment of the PokerStars trademark recorded in sales and marketing expenses, which more than offset revenue growth. Other expense also rose, driven by a $165 million fair value loss on the Fox Option liability and higher interest expense of $385 million, up from $212 million.
How is the Fox Option affecting the company?
Fox holds an option, exercisable until December 2030, to acquire an 18.6% equity interest in FanDuel Group Parent LLC. The option price was $4.3 billion as of December 31, 2023, and the option is measured at fair value through earnings, with a $400 million fair value recorded at year end. Exercise would require the company to sell a significant minority stake in FanDuel, and Fox has previously initiated arbitration over related rights.
What is the company's dividend and capital return policy?
The company has not paid dividends on its ordinary shares since May 2020 and does not currently have specific plans to pay dividends or conduct significant share repurchases. It intends to return capital to shareholders once leverage is optimized. As of February 29, 2024, it had not repurchased shares under its existing authority.
What are the main risks to the U.S. business?
The U.S. business depends on state-level legalization of online sports betting and iGaming, and the filing notes that sports betting has not been legalized in California. It relies partly on market access partnerships, including with Boyd, for skins in certain states. The company also faces potential changes in the interpretation of the federal Wire Act and an IRS memorandum that could subject DFS entry fees to an excise tax.
What material weaknesses did the company disclose?
The company identified material weaknesses in internal control over financial reporting relating to areas including control environment, risk assessment, complex accounting and valuation controls, general IT controls over user access and change management, and monitoring. Management has a remediation plan underway that includes adding GAAP and SEC reporting resources, though the filing states that remediation is not yet complete and that the disclosure controls were not effective as of December 31, 2023.
06—Continue