Morgan Stanley conducted its own research following the March 4 announcement of Flutter Entertainment’s Q4 and full-year 2024 financial results, expressing worries regarding possible risks in 2025. Notwithstanding strong revenue growth, the research group identified potential obstacles such as market competition and regulatory concerns.
With a midpoint forecast of $7.7 billion for 2025, Flutter’s US branch reported $5.8 billion in revenue for 2024. US revenue reached $1.6 billion in Q4 alone, a 14% year-over-year rise. Adjusted EBITDA, on the other hand, fell 3% to $163 million.
Despite “unfavorable sports results” throughout the quarter, according to Flutter CFO Rob Coldrake, the company’s revenue increased. FanDuel, the company’s main US brand, saw what Flutter described as the “most customer-friendly” NFL results in 20 years.
Regulatory and Competitive Risks Loom
Morgan Stanley acknowledged that Flutter maintained its FY2025 projections from its Investor Day in September 2024, accounting for the impact of negative sporting results. While the firm sees potential upside in international expansion and increasing US profits, it also warns of “downside risks.”
Key concerns include potential regulatory challenges in the US and other major markets, rising competition, and a possible slowdown in iGaming growth. Morgan Stanley noted that Flutter’s implied Q2 2025 guidance suggests flat year-over-year EBITDA growth, calling this outlook “potentially conservative.”
Despite challenges, Morgan Stanley remains optimistic about Flutter’s overall growth. The firm highlighted Flutter’s Q4 GAAP net income of $156 million, despite non-cash charges related to the Fox Option liability and purchase price allocation (PPA) adjustments.
“Flutter achieved $156m in Q4 GAAP net income (despite adverse sports results, and non-cash charges for $134m PPA and $212m fair value loss for the Fox Option liability), largely thanks to a tax credit on historic US tax losses, with FY24 GAAP net income of $162m. We see this as constructive regarding potential index inclusion, which is a key stock catalyst,” Morgan Stanley stated.
For 2025, the firm expects Flutter to generate $16.29 billion in revenue and $2.36 billion in adjusted EBITDA, with $1.28 billion coming from the US market. These figures would represent year-over-year increases of 16% and 26%, respectively. Morgan Stanley anticipates “minimal changes” to its forecasts following Flutter’s earnings report.
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