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  • Flutter stands firm on 2023 US profitability deadline as FanDuel smashes Q1 records
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FanDuel delivered a record quarter for Flutter Entertainment in Q1 2022 as US revenue climbed by 45% year-on-year to $574m.

The all-time high was achieved despite significant customer friendly results across February and into March Madness, which cost the operator a further $130m in revenue according to Flutter CEO Peter Jackson.

FanDuel acquired more than 1.3 million customers in Q1, which represents over 70% of its entire customer acquisition volume during the entirety of full-year 2021.

“The strength of the customer economics we’re seeing continues to give us conviction of our path to 2023 profitability,” said Jackson, who pointed out a cumulative cost-per-acquisition of $290, resulting in “very strong” average paybacks within 12 to 18 months.

The 45% revenue uptick was driven by 43% growth in average monthly players (AMPs) as handle more than doubled year-on-year to $7.7bn.

During Q1, FanDuel claimed 37% market share for online sports betting as sportsbook revenue jumped by 89%, despite reportedly losing out on $132m due to customer-friendly results.

FanDuel’s Q1 market share percentage for iGaming stood at 20%, with growth in the vertical driven by sports cross-sell during March Madness and the iGaming launch in Connecticut.

Flutter Entertainment CEO Peter Jackson: “In the US, we had another exciting quarter as FanDuel continued to deliver unparalleled scale, with the US accounting for over half of all stakes for Flutter in Q1.”

“In the US, we had another exciting quarter as FanDuel continued to deliver unparalleled scale, with the US accounting for over half of all stakes for Flutter in Q1,” said Jackson.

“We launched our FanDuel sportsbook in New York and Louisiana in January and also expanded into Ontario in April,” he added.

In other news, FanDuel yesterday appointed David Jennings as its new CFO. Jennings is an internal promotion having previously served as Flutter’s group director of investor relations for the last two years while based in Dublin.

Flutter’s overall group revenue rose by 6% on a constant currency basis in Q1 to £1.57bn, although it was far from plain sailing outside of the US.

The operator’s UK & Ireland division declined by 8% overall to £519m, buoyed by the return of retail, which contributed £65m compared to zero in the prior corresponding period due to Covid-19 closures.

UK & Ireland online reported a steeper 20% downturn despite 15% growth in AMPs however.

This was due to a combination of factors, including the £30m impact of safer gambling measures, operator-friendly sports results in the same period of last year and a peak in player engagement on digital during Q1 of 2021 due to Covid-related restrictions.

Flutter’s International division, which includes the Betfair and PokerStars brands, reported a 5% revenue decline in Q1 due to headwinds including the loss of the Netherlands and regulatory impacts in Germany.

Canada, Brazil, India, Georgia and Armenia all provided strong growth in this segment, however.

Revenue in our International division was 5% lower, reflecting the impact of guided headwinds in the quarter. Excluding these headwinds revenue grew 6% with strong growth in focus markets of Canada, Brazil, India, Italy, Georgia and Armenia.

Those six markets accounted for just under half of overall International division revenue in Q1, according to Flutter CFO Jonathan Hill.

Australia proved the other Q1 growth story in the Flutter portfolio alongside the US, where revenue rose 8% year-on-year to £291m, driven by 10% AMP growth on the Sportsbet brand.

Peel Hunt analyst Ivor Jones said: “Flutter’s US business continues to add states, customers and revenue at a remarkable rate while retaining a leading market share.

“The rest of the group is struggling to deliver growth against tough comps and responsible gaming measures aimed at improving the sustainability of the business.

“Within 18 months the US should start to become materially profitable and cash generative while still driving the growth of the group overall.

“We believe this prospect is not reflected in the share price and we reiterate our Buy recommendation and 14,500p target price.”

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