01—Abstract
Summary
Summary of the 10-Q filed August 13, 2024. Cited figures are marked; the original filing is the authoritative source.
Flutter Entertainment plc's Form 10-Q for the quarter ended June 30, 2024 reports revenue of $3,611 milliona for the three months ended June 30, 2024, up from $3,001 million a year earlier, and $7,008 million for the six months, up from $5,919 million.
Operating profit for the quarter was $369 millionb versus $222 million, and net income was $297 million versus $64 million. The quarter benefited from a $91 million fair value gain on the Fox Option liability. Adjusted EBITDA was $738 million for the quarter ($633 million prior year) and $1,252 million for the six months ($985 million prior year), with Adjusted EBITDA Margin of 20.4% for the quarter and 17.9% for the six months.
Group AMPs were 14,344 thousand for the quarter, up from 12,222 thousand. The balance sheet shows cash and cash equivalents of $1,526 millionc and long-term debt of $6,737 million non-current (total debt $6,790 million) at June 30, 2024. During the six months, operating cash flow was $660 million, compared with $(8) million a year earlier.
The company issued $525 milliond of 6.375% USD senior secured notes and €500 million of 5.000% EUR senior secured notes due 2029, using proceeds to repay the EUR First Lien Term Loan B and borrowings under the GBP revolving credit facility. Management concluded that disclosure controls were not effective as of June 30, 2024 because a material weakness in internal control over financial reporting identified in the 2023 Annual Report had not been remediated. The filing also discloses contingencies, including Austrian and German player claims, an Indian GST notice of ₹179.1 billion ($2.1 billion) which the company disputes, and a Fox Option liability carried at $490 million.
The company acquired a 51% stake in MaxBet for $144 million in January 2024 and BeyondPlay for $26 million in May 2024. Illinois raised online sports betting tax rates effective July 1, 2024, which the company estimates equates to a $50 million U.S. Adjusted EBITDA impact for the six months ending December 31, 2024 before mitigation.
02—Key points
Key Highlights
- Revenue rose to $3,611 million for Q2 2024 from $3,001 million, and to $7,008 million for the six months from $5,919 million.
- Net income was $297 million for Q2 2024 versus $64 million, helped by a $91 million fair value gain on the Fox Option liability.
- Adjusted EBITDA was $738 million for Q2 2024 versus $633 million, with the Adjusted EBITDA Margin at 20.4% versus 21.1%.
- Six-month operating cash flow was $660 million, compared with $(8) million in the prior-year period.
- The company issued $525 million of 6.375% USD and €500 million of 5.000% EUR senior secured notes due 2029 and repaid the EUR First Lien Term Loan B due 2026.
- Management concluded that disclosure controls were not effective as of June 30, 2024 due to an unremediated material weakness in internal control over financial reporting.
- Junglee faces a DGGI GST notice of ₹179.1 billion ($2.1 billion) that the company disputes, with no liability accrued.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Flutter Entertainment kept $0.08.
- Revenue$3.61B100.0%
- Cost of revenue−$1.83B50.8%
- Gross profit$1.78B49.2%
- Operating costs−$1.41B39.0%
- Operating income$369.0M10.2%
- Interest, other & tax−$72.0M2.0%
- Net income$297.0M8.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 13, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $3.61B$3.00B | +20.3% |
| Cost of Revenue | $1.83B$1.49B | +23.1% |
| Gross Profit | $1.78B$1.51B | +17.6% |
| R&D Expenses | $216.00M$176.00M | +22.7% |
| Operating Income | $369.00M$222.00M | +66.2% |
| Interest Expense | $122.00M$98.00M | +24.5% |
| Net Income | $297.00M$64.00M | +364.1% |
| EPS (Basic) | $1.47$0.38 | +286.8% |
| EPS (Diluted) | $1.45$0.37 | +291.9% |
| Shares Outstanding (Basic) | 178.00M— | — |
| Shares Outstanding (Diluted) | 180.00M— | — |
05—Questions
Frequently Asked Questions
How did Flutter's revenue and profitability change in the second quarter of 2024?
Revenue increased to $3,611 million from $3,001 million, and operating profit rose to $369 million from $222 million. Net income was $297 million, compared with $64 million in the second quarter of 2023. The filing attributes the quarter's other income mainly to a $91 million fair value gain on the Fox Option liability.
What drove growth in the U.S. segment?
U.S. segment revenue was $1,527 million for the quarter, up from $1,097 million, and Adjusted EBITDA was $260 million, up from $172 million. The filing cites growth in both new and existing states and iGaming revenue growth of 47%.
How much debt does Flutter carry and what changed?
Total debt was $6,790 million at June 30, 2024, compared with $7,056 million at December 31, 2023. During 2024 the company issued $525 million and €500 million of senior secured notes due 2029, and it drew down an incremental $514 million under the Term B loans. As of June 30, 2024 it was in compliance with all debt covenants.
Are there material weaknesses or control issues investors should know about?
Yes. Management concluded that disclosure controls and procedures were not effective as of June 30, 2024, because a material weakness identified in the 2023 Annual Report had not been remediated. Management states that the financial statements nonetheless fairly present the company's financial position in all material respects, and remediation work is ongoing.
What regulatory or tax risks are disclosed in the filing?
The filing discloses an Indian GST notice to Junglee of ₹179.1 billion ($2.1 billion), which Junglee disputes, and a June 22, 2024 GST Council recommendation that could waive certain historical taxes, expected to be enacted in the third quarter of 2024. It also discloses Austrian and German player claims, and the company has accrued €13 million ($14 million) for expected settlements. Illinois' higher online sports betting tax, effective July 1, 2024, is estimated at a $50 million U.S. Adjusted EBITDA impact for the six months ending December 31, 2024, before mitigation.
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