Flutter Q2 2026 earnings: Revenue rose 3% as margins contracted

Flutter Entertainment (NYSE: FLUT) reported fiscal Q2 2026 revenue of $4.326 billion, up 3% year over year, while diluted EPS swung to a loss of $1.57 from earnings of $0.59. Adjusted EBITDA fell 45% to $508 million as weaker US sportsbook economics, higher UK gaming taxes, FIFA World Cup marketing and historical tax charges outweighed acquisition benefits and iGaming growth.

Core financial results

Revenue growth came from a 9% increase in iGaming revenue to $1.935 billion and a 7% increase in other revenue to $162 million, while sportsbook revenue declined 1% to $2.229 billion. Cost of sales rose by $385 million to $2.613 billion, contributing to an approximately 13% decline in gross profit and a swing from operating profit to an operating loss.

The $333 million deterioration in GAAP net income also reflected $95 million of historical tax provisions and accruals, a $52 million increase in net interest expense and a $30 million increase in depreciation and amortization. These pressures were partly offset by a favorable year-over-year change in the fair value of the Fox Option and lower income tax expense.

Adjusted EBITDA, adjusted EPS and the specified free cash flow measure are non-GAAP metrics.

Business and segment performance

Flutter’s two segments moved in opposite directions on revenue, but both recorded lower adjusted EBITDA. US revenue declined as sportsbook weakness offset iGaming growth, while International revenue benefited from acquisitions and organic expansion.

US

US sportsbook handle increased 2%, but net revenue margin fell 170 basis points to 8.7%. An adverse year-over-year swing in sports results created a six-percentage-point drag on US revenue growth, while promotional spending increased by 140 basis points to 5.4% of handle. Sales and marketing expense rose 61%, driven by the FIFA World Cup and investment in FanDuel Predicts.

iGaming provided the main offset, with revenue and average monthly players both increasing 14%. FanDuel retained reported gross gaming revenue market shares of 39% in sportsbook and 27% in iGaming. Management also said underlying sportsbook measures improved sequentially, although its second-half assumptions use market growth broadly consistent with the mid-single-digit rate seen in the first half.

International

International revenue increased 10%, including the Snai and Betnacional acquisitions, while organic revenue grew 4%. Southern Europe and Africa revenue rose 36%, or 18% organically, supported by Italy and Türkiye. UK and Ireland revenue increased 4%, Central and Eastern Europe grew 23%, and APAC declined 1%.

Brazil revenue rose 64% because of the Betnacional acquisition, but organic revenue fell 14% amid softer market conditions and regulatory changes. International average monthly players declined 16%, including a 21-percentage-point impact from the closure of real-money gaming operations in India.

International adjusted EBITDA margin fell 670 basis points to 18.0%. The main pressures were the increase in UK remote gaming duty, higher FIFA World Cup marketing and the higher cost structure of the acquired Snai business.

Profitability, cash flow and balance sheet

Gross margin was approximately 39.6%, compared with about 46.8% a year earlier. In addition to higher gaming taxes and marketing, Flutter recorded increased technology spending, acquisition-related depreciation and amortization, and higher financing costs.

Operating cash flow remained nearly flat at $363 million despite the GAAP loss, helped by higher accruals and a positive movement in player deposit liabilities. Standard free cash flow increased 21% to $189 million, but free cash flow including financing capex and excluding player funds fell 56% to $125 million, providing a more cautious view of underlying cash generation.

Cash and cash equivalents stood at $1.563 billion on June 30, down from $1.828 billion at the end of 2025. Total debt declined to $11.978 billion from $12.266 billion, and net debt decreased to $10.480 billion from $10.591 billion. Nevertheless, leverage rose to 4.3 times from 3.7 times because the last-12-month adjusted EBITDA base weakened. Flutter completed its planned $250 million first-half share repurchase, buying back 2.4 million shares.

Higher customer investment is replacing margin expansion as the US priority

The US business illustrates the central trade-off in Flutter’s quarter: average monthly players rose 9% and handle increased 2%, but revenue declined 6% and adjusted EBITDA fell 70% because lower revenue margin and higher investment more than offset customer growth.

Management is shifting its near-term emphasis from margin expansion toward customer acquisition, retention and value. The additional investment planned for 2026 is expected to reduce revenue by approximately $385 million and adjusted EBITDA by $270 million, mainly through a more competitive sportsbook proposition.

Prediction markets are another part of this strategy. FanDuel Predicts revenue was not material in Q2, and expected second-half gross revenue is expected to be offset by customer acquisition costs. Separately, Flutter expects its prediction-market market-making capability to contribute approximately $50 million of revenue and adjusted EBITDA benefit in 2026.

2026 guidance

Flutter lowered its 2026 group revenue and adjusted EBITDA guidance, with the reductions concentrated entirely in the US segment. International midpoint guidance was maintained after Q2 trading benefits were offset by unfavorable foreign exchange movements.

Besides customer investment, the US revision includes a $75 million revenue and $50 million adjusted EBITDA headwind from a one-week delay to the NFL season start. Offsets include the expected $50 million market-making contribution, $45 million of operating efficiencies and better-than-guided Q2 trading. Flutter expects US adjusted EBITDA to be approximately break-even in Q3.

Transaction, restructuring and integration costs are now expected to be approximately $500 million, an increase of $200 million from Q4 2025 expectations. The increase principally reflects costs to implement efficiency programs and the $95 million of historical tax provisions.

Management perspective and leadership transition

Flutter launched the second phase of its cost transformation program, targeting an additional $500 million of gross operating-cost and capital-expenditure savings by 2029. Management intends to use these efficiencies to absorb inflation and known tax increases while preserving capacity for customer and revenue investments; the target should therefore not be interpreted as an equivalent increase in net profit.

Phase one remains on track to deliver more than $300 million of savings by 2027, alongside approximately $200 million of additional savings associated with UK gaming tax mitigation plans. More information on the second phase is expected with the Q3 results.

Peter Jackson will step down as CEO, with Flutter President and International CEO Dan Taylor succeeding him on October 1, 2026. Jackson will assist with the transition through the third quarter, which includes preparations for the NFL season.

Recent insider transactions

According to the supplied third-party insider dataset, insiders reported net purchases of 168,087 shares across the latest six-month period. The latest 10 individual entries were director stock-award grants dated June 2, 2026; each had a recorded transaction value of $0, but the supplied data did not include the number of shares granted.

The dataset reported total insider holdings of 32.99 million shares and net purchases equal to 0.50% of those holdings. Because the latest grants were awards rather than market purchases and their share quantities were not provided, their economic size cannot be assessed from the supplied information.

Risks investors should monitor

• US sportsbook economics: Sports results, promotional spending and state taxes reduced sportsbook revenue margin in Q2. Flutter’s planned increase in acquisition and retention spending will also lower near-term revenue and adjusted EBITDA.
• UK gaming taxes: The increase in remote gaming duty from 21% to 40% is expected to have a $320 million adjusted EBITDA impact in 2026 before $85 million of first-order mitigation. Delivery of further cost savings is therefore important to International margins.
• Leverage and financing costs: Leverage increased to 4.3 times, while quarterly net interest expense rose to $162 million from $110 million following acquisition and FanDuel-related financing.
• Regulatory and tax exposure: The India closure materially reduced player counts, Brazil organic revenue fell amid market and regulatory changes, and historical India and US tax matters resulted in $95 million of Q2 charges.
• Prediction-market execution: FanDuel Predicts progressed more slowly than planned in the first half, while second-half gross revenue is expected to be offset by customer acquisition spending.

Summary

Flutter’s Q2 revenue growth was supported by acquisitions and iGaming, but it did not translate into higher earnings as US sportsbook margins, UK taxes, marketing and historical tax charges weighed on profitability. The central issue for coming quarters is whether increased US customer investment can produce durable player and market-share growth while cost savings and cash generation support a reduction in leverage.