Flutter Entertainment is increasing its investment in prediction markets and focusing on expanding its presence in Brazil, even as it reported a significant decline in first-quarter profits. The betting group has also revised its full-year earnings forecast downward due to rising costs in the United States.
The parent company of FanDuel, Paddy Power, and Betfair announced a net income of $209 million for the first quarter, marking a 38% decrease compared to the same period last year. This decline was attributed to increased expenditures on marketing, technology, and new initiatives, which outweighed the strong revenue growth.
Group revenue saw a 17% increase, reaching $4.30 billion for the three months ending March 31, bolstered by acquisitions in Italy and Brazil, alongside ongoing growth in the iGaming sector.
Adjusted EBITDA rose by 2% to $631 million; however, operating profit plummeted by 66% to $76 million. Flutter has lowered its revenue guidance for 2026, now projecting $18.305 billion and adjusted EBITDA of $2.865 billion, down from earlier expectations of $18.4 billion and $2.97 billion, respectively.
The company pointed to unfavorable sports outcomes in the first quarter, launch expenses in Arkansas, and reporting adjustments related to PokerStars North America as factors influencing its performance.
CEO Peter Jackson remarked, “Flutter’s Q1 performance was encouraging, with group revenue increasing 17% year-on-year. While we made good progress during the quarter, there remains more to do to ensure the improving US sportsbook trends continue.”
In the U.S., Flutter's business generated $1.763 billion in revenue, a 6% increase from the previous year, although growth in the sportsbook segment slowed as the market matured. FanDuel continues to face challenges with customer retention and a decrease in betting activity that began in late 2025.
Sportsbook revenue rose by 1%, while iGaming revenue surged by 19%. The company reported an improvement in sportsbook customer trends during the quarter, with average monthly player declines of 5% in January turning into a 1% growth by March.
Flutter is also amplifying its investment in prediction markets, which it sees as a long-term growth avenue in U.S. states where sports betting is not yet regulated. The company anticipates that losses associated with prediction markets will remain at the upper end of its previously estimated range of $250 million to $300 million in adjusted EBITDA for 2026.
During the quarter, FanDuel Predicts expanded its offerings nationwide, covering financial, economic, and commodities contracts, while sports-related prediction contracts became available in 18 states that do not have sportsbooks, including California, Texas, and Florida.
In April, Flutter launched its “One App” FanDuel platform, which allows customers in regulated sportsbook states and prediction market users in non-sportsbook states to access products through a single application.
Jackson emphasized the company's view of prediction markets as “a very attractive, incremental opportunity,” stating, “Our in-house expertise and capabilities place us in a strong position to capitalize on this opportunity in the long-term.”
International operations remain a significant growth driver for Flutter, with revenue increasing by 27% to $2.541 billion. Revenue from Southern Europe and Africa soared by 110% to $940 million, aided by the acquisition of Italian operator Snai, while revenue from Brazil skyrocketed by 722% following the integration of Betnacional.
Looking ahead, Jackson indicated that Flutter plans to enhance its offerings in Brazil in anticipation of the FIFA World Cup. “We are investing with conviction in Brazil,” he stated. “We believe this is a market where we can create a local champion over time. We will soon integrate our proprietary pricing capabilities, unlocking a best-in-class parlay product and promotional improvements ahead of the World Cup.”
Additionally, Flutter announced changes in its management structure to sharpen its focus on the U.S. market. Dan Taylor, currently the CEO of Flutter International, has been appointed President of Flutter Entertainment and will oversee FanDuel, while Christian Genetski will lead the U.S. operations following Amy Howe’s departure.
Analysts at Citizens noted that the results indicate emerging pressures within Flutter’s U.S. operations, despite robust international growth.