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Flutter Entertainment is raising its investment in prediction markets and doubling down on expansion in Brazil, even as first-quarter profit fell sharply and the betting group lowered its full-year earnings forecast amid mounting costs in the United States.
The owner of FanDuel, Paddy Power, and Betfair on Wednesday reported first-quarter net income of $209 million, down 38% from a year earlier, as higher spending on marketing, technology, and new initiatives offset strong revenue growth.
Group revenue rose 17% to $4.30 billion in the three months ended March 31, helped by acquisitions in Italy and Brazil and continued growth in iGaming.
Adjusted EBITDA increased 2% to $631 million, while operating profit dropped 66% to $76 million.
Flutter cut its full-year 2026 guidance, forecasting revenue of $18.305 billion and adjusted EBITDA of $2.865 billion, down from previous expectations of $18.4 billion and $2.97 billion, respectively.
The company cited unfavorable sports results in the first quarter, launch costs in Arkansas, and reporting changes related to PokerStars North America.
“Flutter’s Q1 performance was encouraging, with group revenue increasing 17% year-on-year,” Chief Executive Officer Peter Jackson said. “While we made good progress during the quarter, there remains more to do to ensure the improving US sportsbook trends continue.”
Flutter’s U.S. business generated revenue of $1.763 billion, up 6% from a year earlier, though sportsbook growth slowed as the market matured and FanDuel continued to face customer churn and weaker betting activity carried over from late 2025.
Sportsbook revenue rose 1%, while iGaming revenue climbed 19%. The company said sportsbook customer trends improved during the quarter, with average monthly player declines of 5% in January improving to 1% growth by March.
Flutter is also increasing investment in prediction markets, which it views as a long-term growth opportunity in U.S. states where sports betting remains unregulated.
The company said losses tied to prediction markets are expected to remain near the top end of its previously guided $250 million to $300 million adjusted EBITDA investment range for 2026.
FanDuel Predicts expanded nationwide during the quarter for financial, economic, and commodities contracts, while sports-related prediction contracts became available in 18 non-sportsbook states, including California, Texas, and Florida.
Flutter also launched its “One App” FanDuel platform in April, allowing customers in regulated sportsbook states and prediction-market users in non-sportsbook states to access products through the same app.
Jackson said the company viewed prediction markets as “a very attractive, incremental opportunity”. “Our in-house expertise and capabilities place us in a strong position to capitalize on this opportunity in the long-term,” he added.
International operations remained a key growth driver for the group, with revenue rising 27% to $2.541 billion.
Southern Europe and Africa revenue surged 110% to $940 million, helped by the acquisition of Italian operator Snai, while Brazil revenue jumped 722% following the integration of Betnacional.
Jackson said Flutter planned to strengthen its Brazil offering ahead of the FIFA World Cup.
“We are investing with conviction in Brazil,” Jackson said. “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.”
Flutter also announced management changes aimed at sharpening its U.S. focus.
Dan Taylor, currently CEO of Flutter International, was appointed President of Flutter Entertainment and will oversee FanDuel, while Christian Genetski will lead the U.S. business following Amy Howe’s departure.
Analysts at Citizens said the results pointed to emerging pressure within Flutter’s U.S. operations despite strong international growth.
“The business is showing signs of cracks, which we believe are not necessarily structural,” the analysts said. “The World Cup and prediction market spend now present an uphill battle for the US business.”
Citizens estimated that around 72% of Flutter’s U.S. EBITDA for 2026 would now need to be generated in the fourth quarter, although the brokerage maintained its “Market Outperform” rating on the stock, calling Flutter “drastically undervalued”.