Flutter shares tumble as Paddy Power owner misses forecasts
Shares in Flutter Entertainment fell sharply after the Paddy Power parent missed expectations across key measures and issued softer-than-expected guidance, adding to concerns about the outlook for the US sports betting market.
The New York-listed group saw its stock drop almost seven per cent in extended trading after reporting fourth-quarter revenue of $4.74bn (£3.52bn), below consensus forecasts of $4.97bn.
The disappointing print came despite headline growth of 25 per cent in revenue in the final quarter of 2025.
For the full year, Flutter reported revenue of $16.4bn, up 17 per cent, but below its latest guidance of $16.7bn, which had already been cut from $17.3bn in November.
The group now expects 2026 revenue of $18.4bn, under the $19.3bn consensus forecast.
Investor nerves have only been heightened by fears that the rapid rise of prediction markets like Kalshi and Polymarket is eating into the estimated $14bn US sports gambling market.
Both Flutter and rival Draftkings have lost more than half their market value over the past year.
Chief executive Peter Jackson sought to push back on those concerns, saying a review found only a “low single digit” percentage impact on sportsbook handle growth from prediction markets.
Instead, he pointed to customer-friendly sports results: “Our standard generosity playbook proved less effective in Q4. Our investment phasing did not sufficiently align with the pattern of sports results during this period… As a result we saw higher churn within our customer base and a resultant loss of market share.”
US sportsbook handle growth of just three per cent was a particular concern, though US revenue still rose 33 per cent to $2.14bn, reflecting strength in Canada and iGaming.
Intensifying competition
Flutter’s 2026 midpoint earnings guidance also came in below expectations, with US and international projections 28 per cent and 14 per cent under consensus respectively.
Regulus Partners said the group’s EDGE technology platform was not currently delivering a betting product that could outcompete rivals, warning that overall market share could continue to slip.
Citizens analyst Jordan Bender described the quarter as”one of its worst in recent memory”, but he argued the reset could set up a stronger 2027 following restructuring and tech integration.
Truist analysts added they were surprised by “the overall scale of the miss”, noting there is now a scenario in which DraftKings could generate more earnings than rival FanDuel.
Elsewhere, the €1.91bn acquisition of Sisal boosted revenue in Southern Europe and Africa, while growth in Brazil and Central and Eastern Europe helped offset a 10 per cent revenue hit in Asia Pacific following India’s online gambling ban.
Jackson said Flutter would launch a new FanDuel loyalty programme and increase personalisation to “distinguish our product from prediction markets, where it’s very difficult to offer promotions”.