Flutter expects to move its primary listing to the U.S. effectively by May 31 after shareholders approved the transition earlier this month, the company announced Tuesday.

The transition is reflective of the importance of the company’s sports betting and iGaming business in the U.S., Flutter CEO Peter Jackson said Tuesday during its first-quarter earnings’ conference call. Flutter, the parent company of FanDuel Sportsbook, disclosed that FanDuel maintained the top spot in the nation’s online sports betting market over the first three months of 2024.

“We have had an excellent start to the year,” said Jackson in a statement. “In the U.S., FanDuel’s top line momentum is translating into strong growth in US Adjusted EBITDA and market share gains. We are focused on continuing to expand our player base, market share, and embedding future profits within our business through disciplined investment.”

In January, Flutter moved its secondary listing to the New York Stock Exchange and punctuated the transition in a bell-ringing ceremony at the famous exchange. Jackson traveled across the Atlantic for the ceremony, where he was joined by FanDuel CEO Amy Howe and Rob Gronkowski, a brand ambassador for the company.

In conjunction with the announcement, Flutter canceled its secondary listing on Euronext Dublin while retaining its primary listing on the London Stock Exchange.

— CNBC (@CNBC) May 10, 2024

At the time, the Flutter Board of Directors noted that the U.S. listing could enable the company to gain deeper access to North American capital markets resulting in enhanced liquidity for Flutter shares. During the ceremony, Jackson announced plans to place a measure before shareholders for moving the primary listing to New York. Flutter expects a “greater proposition,” of the company’s future profits to be generated in the U.S., the company noted in a statement released Tuesday.

“We believe a U.S. primary listing is the natural home for the group,” said Jackson, in the statement. “We have
moved our operational headquarters to New York reflecting the importance of the U.S. sports betting and iGaming market to our business.”

The transition to New York represents a considerable shift with London’s FTSE 100 expected to lose more than £22 billion ($27.7 billion) in value on Flutter’s departure. Nevertheless, approximately 98% of Flutter shareholders approved the move, underscoring investor sentiment in FanDuel’s growth potential.

Over the quarter, Flutter averaged 3.89 million U.S. customers per month, a 15% year-over-year increase. Flutter generated U.S. revenue of $1.4 billion, an increase of 32% over the year-ago quarter. For legacy states launched before 2022, customer acquisition rose 12% year-over-year, Flutter noted in a presentation. Flutter is also pleased with “attractive payback rates,” that the company deemed in line with historic trends.

The company reported Adjusted EBITDA of $26 million in the U.S., up from -$53 million during the same quarter in 2023. As with its main rivals, FanDuel felt the negative impact of “unfavorable sports outcomes,” over the final two weeks of March. UConn, a popular choice among bettors, won the national championship in men’s basketball for a second straight year. Purdue, another No. 1 seed in the tournament, advanced to the national final.

On the women’s side, two No. 1 seeds, South Carolina and Iowa, met in the national championship. Bolstered by the “Caitlin Clark effect,” wagering on the women’s tournament soared 540%, according to an Optimove study.  The impact from the unfavorable sports outcomes led to a -$76 million contribution over the two-week period, Flutter indicated.

— Blackmrprophet74, CPA (@Blackmrphophet) May 14, 2024

In addition, the company’s U.S. sportsbook net revenue margin increased 0.4% to 7.3%, driven by FanDuel’s product offerings, Flutter said. Promotional spending levels appear to be in line with the prior year’s quarter, according to the statement.

For the quarter, Flutter said the company delivered a U.S. online sports betting market share of 52% in terms of net gaming revenue. The market share declined slightly to 46% for gross gaming revenue. The revenue metrics are based on the U.S. states FanDuel operated in as of March 31, 2024, excluding Tennessee. The state, according to a Flutter presentation, no longer reports the data.

For the three-month period ended March 31, Flutter reported a net loss of $177 million, a loss that widened from -$111 million during the year-ago quarter. Flutter reported a net loss per share of $1.10, compared with a per share loss of $0.58 in the first-quarter of 2023.

The results fell below Wall Street expectations of earnings per share of $1.08. Flutter noted that the losses were attributable to $356 million in non-cash charges, with $184 million from changes in the fair value of its Fox option liability.

Flutter and Fox Corporation agreed to shut down operations of FOX BET during a phased closure last summer. An arbitrator ruled in 2022 that if Fox Corp. exercised an 18.6% option in FanDuel it would cost at least $3.72 billion. Under a 10-year option that expires in 2030, the option will increase 5% in annual value, Bloomberg reported.

— Reuters (@Reuters) July 28, 2023

Overall, Flutter generated revenues of $3.39 billion, missing analysts’ expectations of $3.57 billion. Flutter reported Adjusted EBITDA of $514 million, up 46% from Adjusted EBITDA of $352 million during the same quarter in 2023. But Flutter’s Adjusted earnings per share of $0.10 fell 85% year-over-year from last year’s opening quarter. In the U.S., Flutter indicated that Adjusted EBITDA margin rose 6.8% due to what it described as “disciplined player acquisition investment.”

Flutter defines metrics such as Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Earnings Per Share as non-GAAP financial measures that the company uses to supplement its financial results in accordance with U.S. generally accepted accounting principles (GAAP).

Flutter introduced 2024 financial-year guidance in March with implied group revenue and Adjusted EBITDA growth of 17.5% and 30.2% at the respective midpoints. At the time, Flutter projected U.S revenue in the range of $5.8 billion to $6.2 billion, along with U.S. Adjusted EBITDA between $635 million and $785 million. Flutter said Tuesday that the company remains confident in its full-year guidance despite the unfavorable sports outcomes.

Earlier this month, DraftKings raised its full-year revenue guidance to a range of $4.8 billion to $5.0 billion. DraftKings, the archrival of FanDuel, projects Adjusted EBITDA in the range of $500 million at its midpoint. Both DraftKings and FanDuel blamed the negative sports outcomes for denting revenue in the first quarter.

Flutter shares ticked up Tuesday to $204 per share in see-saw trading. At session lows, Flutter fell to $196.45, down approximately 1%.

In January, Flutter debuted on the New York Stock Exchange at around $200 a share. Flutter’s intraday highs on Tuesday translated to a market capitalization of about $36.4 billion.