Shares of Flutter Entertainment (FLUT) — the owner of the popular sports betting app FanDuel — are soaring after the company reported a revenue jump of over 40%. Flutter CEO Peter Jackson joins Yahoo Finance Live to discuss the company's future plans.
Jackson attributes the company's growth to the "outstanding performance" it witnessed at FanDuel. He notes that sports betting has allowed the company to expand its consumer base, which has, in turn, boosted profitability both internationally and domestically.
While acknowledging the competitive environment, Jackson believes that if Flutter "keeps delivering the best product," with initiatives such as special offerings for major sports events, it will continue to attract customers.
Jackson describes Flutter's listing as "a big change" for the business but is content to involve shareholders in the company's success. He also reveals plans to move the stock to the New York Stock Exchange in May, aiming to grow US business further.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Angel Smith
Video Transcript
JULIE HYMAN: Shares of FanDuel parent company flutter ticking higher this morning after the company saw its US business scaling rapidly with revenue up over 40%. For 2024, flutter expects us adjusted EBITDA to surge over 200%. That news briefly bringing the stock to record highs this morning. Joining us now to discuss is Peter Jackson, Flutter's CEO. Jackson, thank you for being here. Obviously, I'd imagine you're in a good mood this morning.
So it's great to chat with you. I know that you see the company's profit tripling moving forward. What would you say is the biggest catalyst behind that growth?
PETER JACKSON: The biggest catalyst for growth for Flutter as a whole, is clearly the outstanding performance we're seeing in FanDuel. We're the number one business in online sports betting. And we're delighted in January, we became the number one brand in iGaming as well. And we added significant customers onto the platform last year. 3.7 million new customers onto the FanDuel platform. And we'll consider the business will continue to grow this year.
We're acquiring as much business as we can. And that's falling through and helping us boost the profitability of FanDuel. And coupled with our global business, our international business, which is growing as well. Positions us very well to keep seeing those profits grow.
JULIE HYMAN: Peter, you mentioned acquiring as much business as you can here in the US. How do you do that? Because it is a landscape it is an industry here that's getting it, seems like more competitive almost by the week.
PETER JACKSON: We've always operated in a very competitive environment. If I think about the years in which we've had FanDuel live in the market. There's always been competitors coming hard into the market and trying to steal customers' attention. We think that the best way to keep winning in the market is delivering the best product we can. So this March Madness we've got our live same game parlay products available for customers to bet on, on the first time. In March Madness and that's proving to be very popular. We hit record all time highs in the Super Bowl.
Over $300 million of handle bets on the Super Bowl off the back of some of the fantastic product innovations we've had there as well. And so if we can keep delivering great innovative products for our customers. We we'll keep bringing them onto our platform.
JULIE HYMAN: Well, regarding that growth in the US. I know that the company is hoping to make the primary stock market listing here in the United States. And shareholders are voting on that move in May. What do you anticipate happening with that vote?
PETER JACKSON: We seem very strong support from shareholders for this secondary listing. We picked up on the New York Stock Exchange. And I was absolutely delighted to ring the bell on the 29th of January and usher in this big change for our business. So we'll now go to shareholders. We have our AGM on the 1st of May. And we're convinced that they will wholeheartedly back a shift to move our primary listing to the New York Stock Exchange. That will become effective on the 31 of May. And at that point will become a primary listed US business. And will become eligible for inclusion in the US indices.
JULIE HYMAN: And Peter, also another key metric to watch within your industry and obviously with your competitors as well. Is just the promotional spend. When you're out there trying to acquire, trying to get more business, trying to grow your footprint. A lot of times you're relying on more heavily, heavy promotional spending. What does your plan look like for that? And ultimately, how do you walk that balance or how do you balance that? In terms of promotional spending, what makes sense. But also keeping in mind the pressure that is then eventually going to put on your bottom line.
PETER JACKSON: One of the advantages we have of being such a global business, we have so much expertise. In terms of understanding the lifetime value of customers that we acquire. And we are very conservative. When we look at the calculations we make to determine the valuations of the customer and look at the marketing money that we spend to acquire them. And if I look at the customers we acquired last year, in the United States, they were paying back within 20 months.
We made money last year. And so as you shared at the top of the show, we expect our profitability to grow significantly in the US market this year. So we're acquiring as much business as we can. Whilst ever we meet those 20 month or less return criteria. It's great business for us to be doing.
JULIE HYMAN: And Peter, I'd be remiss to not get your take on some of the sports betting challenges that we're hearing about in the news here. Obviously, the NBA investigating a player for potentially betting on himself. And also all of the news surrounding the MLB with Shohei Ohtani and his translator in alleged sports betting there. What is your take on the news that we're getting about all of these scandals regarding betting?
PETER JACKSON: Integrity is absolutely paramount to sport. And it's something that we take incredibly seriously. We have a lot of people focused on that. And identifying any suspicious activities or patterns that we see in our business. And we'll share that with the appropriate leagues and codes. And I think the extent to which the authorities can make sure that we can block out these black market operators. Who are not interested in those types of activities. and frankly don't really care about customer safety either, the better.
We spent over $100 billion-- $100 million last year on safer gambling. 45% of our customers are using tools to make sure that they're protected on our platform. And it's really important that we stop customers accessing these black markets, where the operators frankly, are incredibly irresponsible.
JULIE HYMAN: Peter, how do you screen? Do you screen for professional athlete activity, collegiate athlete activity, on your platform? And if you don't, what are the plans are there any plans to enforce something like that in the future?
PETER JACKSON: Well, clearly this is something that we need to make sure we get right. In terms of providing education to the teams and the athletes. And we spend a lot of time helping support those activities. And also to make sure that we screen to the extent we can on our platforms as well. So both of them are important. But ultimately the education piece, I think is the best way of tackling this.
JULIE HYMAN: So education then, Peter, versus any action items on the platform?
PETER JACKSON: We can take actions on our platform. And we do. But ultimately the way to eliminate this is up front to make sure that the athletes understand the situation and know that this is not something they can do.
JULIE HYMAN: Peter Jackson, Flutter CEO. Really appreciate you coming on. Thank you so much for joining us.
