Flutter Entertainment plc

Previous wording

Despite increased borrowing from recent acquisitions, we anticipate reducing our leverage ratio over time due to the scalability of our technology platforms and positive working capital from our growing business.

Current wording

We anticipate strong conversion of operation income into cash due to the scalability of our technology platforms and positive working capital from our growing business.

Previous wording

We aim to create long-term value through disciplined capital allocation, including investing in player growth and retention and acquiringtop-performing local brands in high-growth markets. Although we do not currently have specific plans to pay dividends or engage in significant share repurchases, once we have optimized our leverage, we intend to return to shareholders capital that cannot be effectively deployed through our disciplined capital allocation strategy.

Current wording

We aim to create long-term value through disciplined capital allocation, including investing in player growth and retention and acquiring top-performing local brands in high-growth markets. We intend to return to shareholders capital that cannot be effectively deployed through our disciplined capital allocation strategy. We have recently announced a share repurchase program. See “— Liquidity and Capital Resources” below for additional information regarding the share repurchase program.

Previous wording

Segment results for the three and six months ended June 30, 2023, have been revised to reflect the change in operating segment measurement and change in operating segment composition.

Current wording

Segment results for the three and nine months ended September 30, 2024, have been revised to reflect the change in operating segment measurement and change in operating segment composition.

Previous wording

We report our financial results in this quarterly report in accordance with U.S. GAAP; however, management believes that certainnon-GAAP financial measures provide investors with useful information to supplement our financial operating performance in accordance with U.S. GAAP. We believe Adjusted EBITDA and Adjusted EBITDA Margin, both on a Group-wide basis, provide visibility to the performance of our business by excluding the impact of certain income or gains and expenses or losses. Additionally, we believe these metrics are widely used by investors, securities analysts, ratings agencies and others in our industry in evaluating performance.

Current wording

We report our financial results in this quarterly report in accordance with U.S. GAAP; however, management believes that certain non-GAAP financial measures provide investors with useful information to supplement our financial operating performance in accordance with U.S. GAAP. We believe Adjusted EBITDA and Adjusted EBITDA Margin, both on a Group-wide basis, provide visibility to the performance of our business by excluding the impact of certain income or gains and expenses or losses. Additionally, we believe these metrics are widely used by investors, securities analysts, ratings agencies and others in our industry in evaluating performance.

Previous wording

Ournon-GAAP financial measures may not be comparable to similarly-titled measures used by other companies, have limitations as analytical tools and should not be considered in isolation. Additionally, we do not consider ournon-GAAP financial measures as superior to, or a substitute for, the equivalent measures calculated and presented in accordance with U.S. GAAP.

Current wording

Our non-GAAP financial measures may not be comparable to similarly-titled measures used by other companies, have limitations as analytical tools and should not be considered in isolation. Additionally, we do not consider our non-GAAP financial measures as superior to, or a substitute for, the equivalent measures calculated and presented in accordance with U.S. GAAP.

Previous wording

To evaluate our business properly and prudently, we encourage you to review the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report, and not rely on a single financial measure to evaluate our business. We also strongly urge you to review the reconciliations between our most directly comparable financial measures calculated in accordance with U.S. GAAP measures and ournon-GAAP measures set forth in “—Supplemental Disclosure of Non-GAAP Measures.”

Current wording

To evaluate our business properly and prudently, we encourage you to review the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report, and not rely on a single financial measure to evaluate our business. We also strongly urge you to review the reconciliations between our most directly comparable financial measures calculated in accordance with U.S. GAAP measures and our non-GAAP measures set forth in “—Supplemental Disclosure of Non-GAAP Measures.”

Previous wording

In January 2024, we acquired an initial 51% controlling stake in MaxBet, a leading omni-channel sports betting and gaming operator in Serbia. The purchase comprised of a cash consideration of $144 million (€132 million). The share purchase agreement also includes call and put options to acquire the remaining 49% stake in 2029.

Current wording

In January 2024, we acquired an initial 51% controlling stake in MaxBet, a leading omni-channel sports betting and gaming operator in Serbia. The purchase comprised of a cash consideration of $143 million (€131 million). The share purchase agreement also includes call and put options to acquire the remaining 49% stake in 2029.

Previous wording

The global online betting and gaming market is currently expected to grow at a compound annual growth rate (“CAGR”) of 10.9% between 2024 and 2028, primarily driven by further migration to online channels and the increase in the number of regulated markets across the world. The expected regulation in the next two years of markets such as Canada, as well as additional states in the United States, have the potential to increase the international addressable market. The performance of our four reportable segments can be materially affected by these industrial trends and regulatory changes in the global online sports betting and iGaming market.

Current wording

The global online betting and gaming market is currently expected to grow at a compound annual growth rate (“CAGR”) of 8.0% between 2024 and 2030, primarily driven by further migration to online channels and the increase in the number of regulated markets across the world. The expected regulation in the next two years of markets such as Canada, as well as additional states in the United States, have the potential to increase the international addressable market. The performance of our four reportable segments can be materially affected by these industrial trends and regulatory changes in the global online sports betting and iGaming market.

Previous wording

Our US segment is considered to be the largest growth opportunity for the Group. Since 2018 when the key gambling legislation was overturned by the U.S. Supreme Court, a number of states have moved to legalize and regulate gambling at the state level. As of June 30, 2024, FanDuel is active in 23 states that have legalized and regulated for a competitive online sports betting market and 5 states that have legalized and regulated iGaming. Effective from July 1, 2024, the state of Illinois increased its tax rates on online sports betting which we estimate equates to a $50 million U.S. Adjusted EBITDA impact for the six months ending December 31, 2024 before any mitigating actions which involves optimization of player incentives and media spend, which are expected to have an approximate $10 million impact, resulting in a net U.S. Adjusted EBITDA of $40 million for the 6 months ending December 31, 2024. We would anticipate that ongoing mitigation efforts can reduce the U.S. Adjusted EBITDA impact of the tax increase by approximately 50% in 2025. No other states have advanced similar legislation.

Current wording

Our U.S. segment is considered to be the largest growth opportunity for the Group. Since 2018 when the key gambling legislation was overturned by the U.S. Supreme Court, a number of states have moved to legalize and regulate gambling at the state level. As of September 30, 2024, FanDuel is active in 23 states that have legalized and regulated for a competitive online sports betting market and 5 states that have legalized and regulated iGaming. Effective from July 1, 2024, the state of Illinois increased its tax rates on online sports betting. On August 13, 2024, we announced we expect a $50 million impact in U.S. Adjusted EBITDA for the six months ending December 31, 2024 before any mitigating actions due to this increase. However, certain mitigation actions including optimization of player incentives and media spend are expected to have an approximate $10 million impact resulting in an expected net U.S. Adjusted EBITDA impact of $40 million for the six months ending December 31, 2024. No other states have advanced similar legislation.

Previous wording

In recent years, the regulatory framework in Italy has tightened with an online advertising ban issued in 2019 as well as a temporary (2 years) increase in taxes on gross winnings for sports betting to finance Italian sport during the Covid pandemic. In August 2023, the Italian government approved the terms of a new decree to reorganize the entire gambling sector with the primary objective of improving player protection, combating illegal gambling and increasing tax revenue through a new licensing framework. The first operational step was the approval of a decree in March 2024 to initiate the reorganization of the online sector through the issuing of a new tender, for fifty expected new online gaming licenses to be awarded by the first quarter of 2025. Theses licenses will have a nine year validity and cover all the games that are not subject to exclusive licenses, such as online scratch cards. Groups, such as Flutter can hold a maximum of five licenses. The Group does not currently expect a significant impact from these regulatory changes due to its reduced dependence on online advertising, its scale advantage, and its retail presence in Italy.

Current wording

In recent years, the regulatory framework in Italy has tightened with a ban on online advertising issued in 2019 and a temporary (2 year) increase in taxes on gross winnings from sports betting to finance Italian sport during the Covid pandemic. In August 2023, the Italian government approved the terms of a new decree to reorganize the entire gambling sector with the primary objective of improving player protection, combating illegal gambling and increasing tax revenues through a new licensing framework. The first operational step was the approval of a decree in March 2024 to initiate the reorganization of the online sector through the issuing of a new call for tenders, for new online gaming licenses expected by the first quarter of 2025. A significant amount of interest in the Italian market is anticipated, with at least 50 requests from operators expected to seek these new licenses. These licenses will be valid for nine years and will cover all games that are not subject to exclusive licenses, such as online scratch cards. The new licenses are scheduled to start in third quarter of 2025. Groups, such as Flutter, can hold a maximum of five licenses. At present, the Group does not expect a significant impact from these regulatory changes, given its reduced dependence on online advertising, its scale advantage and its retail presence in Italy. Additionally, bids for the tender of Italian Lotto are expected to be submitted by the end of 2024. Italian Lotto is current managed by Lottoitalia s.r.l. (“Lottoitalia”), a joint venture company among IGT Lottery S.p.A., Italian Gaming Holding a.s., Arianna 2001 (an entity associated with the Federation of Italian Tobacconists), and Novomatic Italia.

Previous wording

The regulatory environment in Australia has also evolved significantly in recent years, especially after the introduction of point of consumption tax in 2019. Queensland, New South Wales and the Australian Capital Territory have since increased point of consumption tax, and finally, Victoria announced an increase in the point of consumption tax rate from 10% to 15%, effective from July 1, 2024. The higher tax environment underlines the importance of scale in the Australian market and favors large operators, as increasing regulatory and tax hurdles can drive out smaller operators and support market share expansion for scale operators.

Current wording

The regulatory environment in Australia has also evolved significantly in recent years, especially after the introduction of point of consumption tax in 2019. Queensland, New South Wales and the Australian Capital Territory have since increased point of consumption tax rates. Victoria is the most recent state to announce an increase in the point of consumption tax rate (from 10% to 15%), effective from July 1, 2024. The higher tax environment underlines the importance of scale in the Australian market and favors large operators, as increasing regulatory and tax hurdles can drive out smaller operators and support market share expansion for scale operators.

Previous wording

Net profit (loss) margin is net profit (loss) divided by revenue.

Current wording

Net loss margin is net loss divided by revenue.

Previous wording

Adjusted EBITDA and Adjusted EBITDA Margin arenon-GAAP financial measures. See “—Supplemental Disclosure of Non-GAAP Measures” for additional information about these measures and reconciliations to the most directly comparable financial measures calculated in accordance with U.S. GAAP.

Current wording

Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. See “—Supplemental Disclosure of Non-GAAP Measures” for additional information about these measures and reconciliations to the most directly comparable financial measures calculated in accordance with U.S. GAAP.

Previous wording

Our revenue increased by 20%, to $3,611 million for the three months ended June 30, 2024, from $3,001 million for the three months ended June 30, 2023 and our AMPs grew 17% period on period to 14.3 million. The key drivers of Group revenue growth were (i) continued expansion of our US segment, with revenue 39% higher period on period, (ii) strong UKI iGaming and sportsbook growth following a positive European Football Championships (‘Euros’) and the benefit of positive sports results and finally (iii) a strong International performance particularly in Italy. The addition of MaxBet in the International segment in the three months ended June 30, 2024 also added 1% to total Group revenue. The impact of sports results which is calculated as the difference between our expected net revenue margin for the period and our actual net revenue margin had an approximately 7% positive impact on total revenue growth for the three months ended June 30, 2024.

Current wording

Our revenue increased by 27%, to $3,248 million for the three months ended September 30, 2024, from $2,558 million for the three months ended September 30, 2023 and our AMPs increased 16% period on period to 12.9 million. The key drivers of Group revenue growth were (i) continued strong online revenue growth of our U.S. segment, with revenue increasing by 51% period on period and a positive start to the new National Football League (‘NFL’) season in the U.S. including new product launches and the benefit of favorable sports results, (ii) UKI revenue growth of 18% following a strong conclusion to the European Football Championships (‘Euros’), positive sports results and excellent momentum in iGaming, and (iii) a strong International performance particularly in Sisal. The addition of MaxBet also added 2% to total Group revenue in the three months ended September 30, 2024. The impact of sports results which is calculated as the difference between our expected net revenue margin for the period and our actual net revenue margin had approximately a 4% positive impact on total revenue growth for the three months ended September 30, 2024.

Previous wording

Cost of sales increased by 23%, to $1,835 million for the three months ended June 30, 2024, from $1,491 million for the three months ended June 30, 2023, in line with the increase in revenue. Cost of sales as a percentage of revenue remained consistent period on period at 51% for the three months ended June 30, 2024 compared with 50% for the three months ended June 30, 2023.

Current wording

Cost of sales increased by 26%, to $1,752 million for the three months ended September 30, 2024, from $1,386 million for the three months ended September 30, 2023, in line with the increase in revenue. Cost of sales as a percentage of revenue remained consistent period on period at 54% for the three months ended September 30, 2024 compared with 54% for the three months ended September 30, 2023.

Previous wording

Sales and marketing expenses increased by 12%, to $746 million for the three months ended June 30, 2024, from $667 million for the three months ended June 30, 2023, primarily due to increased sales and marketing costs driven by investment in US customer acquisition and the Euros. Sales and marketing expenses as a percentage of revenue was 21% for the three months ended June 30, 2024, a decrease of 150 basis points from 22% for the three months ended June 30, 2023. This decrease was driven by (i) significant economies of scales achieved in existing states with continued disciplined player acquisition investment in the United States partly offset by new state launches, and (ii) increasingly targeted investment in the “Consolidate and Invest” markets which include Italy, Spain, Georgia, Armenia, Brazil, India, Turkey, Morocco, Bosnia & Herzegovina, Serbia and the United States, to support the growth in these markets, as well as the closure of FOX Bet in August 2023.

Current wording

Sales and marketing expenses increased by 7% to $748 million for the three months ended September 30, 2024, from $701 million for the three months ended September 30, 2023, primarily due to investment in player acquisition in the U.S. at the start of the NFL season. Sales and marketing expenses as a percentage of revenue was 23% for the three months ended September 30, 2024, a decrease of 400 basis points from 27% for the three months ended September 30, 2023. This decrease was driven by significant economies of scale achieved in existing states with continued disciplined player acquisition investment in the United States partly offset by new state launches.

Previous wording

Other income increased by $79 million, to $89 million for the three months ended June 30, 2024, from $10 million for the three months ended June 30, 2023. This increase was primarily driven by the fair value gain of $91 million on the Fox Option liability for the three months ended June 30, 2024, as compared to a fair value loss of $53 million for the three months ended June 30, 2023. This increase in other income was partially offset by (i) a foreign exchange loss of $8 million for the three months ended June 30, 2024 as compared to a foreign exchange gain of $35 million for the three months ended June 30, 2023 and (ii) a fair value gain on derivative instruments of $7 million for the three months ended June 30, 2024 as compared to $29 million for the three months ended June 30, 2023.

Current wording

Other expense, net increased by $78 million, to a $122 million expense for the three months ended September 30, 2024, from a $44 million expense for the three months ended September 30, 2023. This increase was primarily driven by (i) the impact of a fair value loss of $121 million on the Fox Option liability for the three months ended September 30, 2024, as compared to a fair value gain of $18 million for the three months ended September 30, 2023 and (ii) a fair value loss on derivative instruments of $25 million for the three months ended September 30, 2024 as compared to $19 million gain for the three months ended September 30, 2023. This was partially offset by a foreign exchange gain of $31 million for the three months ended September 30, 2024 as compared to a foreign exchange loss of $80 million for the three months ended September 30, 2023.

Previous wording

Income tax expense decreased by $33 million, to $53 million for the three months ended June 30, 2024, from $86 million for the three months ended June 30, 2023. The movement is primarily due to the change in amount and jurisdictional mix of profits in which the Group has a taxable presence, as well as the tax impact of discrete adjustments.

Current wording

Income tax benefit increased by $5 million, to a $16 million income tax benefit for the three months ended September 30, 2024, from a $11 million income tax benefit for the three months ended September 30, 2023. The movement is primarily due to the change in amount and jurisdictional mix of profits in which the Group has a taxable presence, as well as the tax impact of discrete adjustments.

Previous wording

Adjusted EBITDA increased by 17%, to $738 million for the three months ended June 30, 2024, from $633 million for the three months ended June 30, 2023. Adjusted EBITDA Margin decreased by 70 basis points from 21.1% to 20.4% reflecting the revenue performance and expenses trend outlined above.

Current wording

Adjusted EBITDA increased by 74%, to $450 million for the three months ended September 30, 2024, from $258 million for the three months ended September 30, 2023. Adjusted EBITDA Margin increased by 380 basis points from 10.1% to 13.9% reflecting the revenue performance and expenses trend outlined above.

Previous wording

Total revenue for our U.S. segment increased by 39% to $1,527 million for the three months ended June 30, 2024, from $1,097 million for the three months ended June 30, 2023, reflecting AMPs growth of 27%. Sportsbook revenue increased by 41%, with amounts staked up 35% to $10,976 million and AMPs 30% higher at 2.8 million due to our strong growth across both new and existing states. Sportsbook net revenue margin increased to 10.0% for the three months ended June 30, 2024 compared to 9.6% for the three months ended June 30, 2023. This reflected continued expansion of our expected sportsbook net revenue margin, driven by our market leading product offering and pricing capabilities, partly offset by a 50 basis points adverse impact from less favorable sports results compared with the prior period (sports results for the three months ended June 30, 2024: 110 basis points favorable; for the three months ended June 30, 2023:160 basis points favorable).

Current wording

Total revenue for our U.S. segment increased by 51% to $1,250 million for the three months ended September 30, 2024, from $828 million for the three months ended September 30, 2023, reflecting AMPs growth of 28%. Sportsbook revenue increased by 62%, with amounts staked up 36% to $10,037 million and AMPs 31% higher at 2.6 million due to our strong growth across both new and existing states. Sportsbook net revenue margin increased to 8.2% for the three months ended September 30, 2024 compared to 6.9% for the three months ended September 30, 2023. This reflected continued expansion of our expected sportsbook net revenue margin, driven by our market leading product offering and pricing capabilities. We also benefited from a 120 basis points of favorable impact from favorable sports results compared with the prior period (sports results for the three months ended September 30, 2024: 80 basis points favorable; for the three months ended September 30, 2023: 40 basis points unfavorable).

Previous wording

Other revenue for the three months ended June 30, 2024 decreased by 3% period on period driven by a decline in DFS where a portion of our DFS player base has migrated some or all of their play to our sportsbook product.

Current wording

Other revenue for the three months ended September 30, 2024 decreased by 14% period on period driven by a decline in DFS where a portion of our DFS player base has migrated some or all of their play to our sportsbook product.

Previous wording

Adjusted EBITDA for the U.S. was $260 million for the three months ended June 30, 2024, a $88 million increase compared to $172 million for the three months ended June 30, 2023. Adjusted EBITDA Margin increased to 17.0% for the three months ended June 30, 2024 from 15.7% for the three months ended June 30, 2023. These improvements were driven by (i) an increase in revenue as a result of the factors above; and (ii) significant economies of scales achieved in sales and marketing expenses through continued disciplined player acquisition investment in existing states. These improvements were partially offset by an increase in technology, research and development costs, primarily reflecting increased headcount costs as we continue to invest in scaling our business in the US.

Current wording

Adjusted EBITDA for the U.S. was $58 million for the three months ended September 30, 2024, a $113 million increase compared to $55 million loss for the three months ended September 30, 2023. Adjusted EBITDA Margin increased to 4.6% for the three months ended September 30, 2024 from 6.6% loss for the three months ended September 30, 2023. These improvements were driven by (i) an increase in revenue as a result of the factors above, (ii) lower cost of sales as a percentage of revenue primarily driven by the positive sports results benefit, which waspartly offset by the impact of the Illinois tax increase from July 1, 2024 and (iii) significant economies of scale achieved in sales and marketing expenses through ongoing operating leverage in our earlier-to-regulate states. These improvements were partially offset by increases in technology, research and development expenses and general and administrative expenses reflecting the investment to scale our product and technology capabilities.

Previous wording

Total revenue for our UKI segment increased by 18% to $928 million for the three months ended June 30, 2024 from $789 million for the three months ended June 30, 2023. AMPs increased by 7% to 4.4 million for the three months ended June 30, 2024 from 4.1 million for the three months ended June 30, 2023, largely benefitted from the Euros.

Current wording

Total revenue for our UKI segment increased by 18% to $846 million for the three months ended September 30, 2024 from $719 million for the three months ended September 30, 2023. AMPs increased by 13% to 4.1 million for the three months ended September 30, 2024 from 3.6 million for the three months ended September 30, 2023, largely benefitting from a strong conclusion of the Euros and continued player momentum in iGaming.

Previous wording

Other revenue increased by 10%, to $54 million for the three months ended June 30, 2024 from $49 million for the three months ended June 30, 2023 driven by the Betfair Exchange.

Current wording

Other revenue decreased by 14%, to $36 million for the three months ended September 30, 2024 from $42 million for the three months ended September 30, 2023 driven by the Betfair Exchange.

Previous wording

Total revenue for our International segment increased by 8% to $1,604 million for the six months ended June 30, 2024 from $1,486 million for the six months ended June 30, 2023, reflecting a 22% increase in AMPs. Revenue in our “Consolidate and Invest” markets grew 12% reflecting (i) the acquisition of MaxBet in January 2024 which contributed $99 million in revenue during the six months ended June 30, 2024 and, (ii) the revenue growth in Italy (+4%), Georgia (+14%), Spain (+11%) and Brazil (+7%). This growth helped to mitigate the revenue decline in India (-17%) due to the impact of tax changes introduced in the three months ended December 31, 2023.

Current wording

Total revenue for our International segment increased by 15% to $781 million for the three months ended September 30, 2024 from $679 million for the three months ended September 30, 2023, reflecting a 14% increase in AMPs. Revenue in our “Consolidate and Invest” markets grew 20% reflecting (i) the acquisition of MaxBet in January 2024, which contributed $50 million in revenue during the three months ended September 30, 2024 and (ii)strong revenue growth in Italy (+13%), Turkey (+34%), Georgia (+17%), Armenia (+14%) and Spain (+4%). This growth helped to mitigate the revenue decline in India (-17%) due to the impact of tax changes introduced in the three months ended December 31, 2023.

Previous wording

Sportsbook revenue increased by 28% to $197 million for the three months ended June 30, 2024 from $154 million for the three months ended June 30, 2023. This was mainly due to the stakes increase of 23% to $1,475 million driven by the Euros and the increase in sportsbook net revenue margin of 50 basis points to 13.4%. The increase in net revenue margin was driven by the 20 basis point impact from favorable sports results period on period (three months ended June 30, 2024: 110 basis points favorable impact; three months ended June 30, 2023: 90 basis points favorable impact).

Current wording

Sportsbook revenue increased by 31% to $160 million for the three months ended September 30, 2024 from $122 million for the three months ended September 30, 2023. This was mainly due to the stakes increase of 36% to $1,421 million driven by strong revenue growth in Italy including the benefit of the Euros. There was a decrease in sportsbook net revenue margin of 40 basis points to 11.3% due to a lower proportion of wagers coming from Sisal's higher revenue margin retail business. Sport results were less unfavorable by 10 basis points period on period (three months ended September 30, 2024: 60 basis points unfavorable impact; three months ended September 30, 2023: 70 basis points unfavorable impact).

Previous wording

Other revenue for the three months ended June 30, 2024 increased by 13% driven by the new concession in Morocco.

Current wording

Other revenue for the three months ended September 30, 2024 increased by 23% drivenby the new concession in Morocco.

Previous wording

Adjusted EBITDA for International was $156 million for the three months ended June 30, 2024, a 8% increase from $145 million for the three months ended June 30, 2023, and Adjusted EBITDA Margin decreased by 70 basis points to 19.3% for the three months ended June 30, 2024. This reflects operating cost savings from the closure of Fox Bet and the optimization of the PokerStars business model being offset by the phasing of general and administration costs in the prior year.

Current wording

Adjusted EBITDA for International was $152 million for the three months ended September 30, 2024, a 28% increase from $119 million for the three months ended September 30, 2023, and Adjusted EBITDA Margin increased by 200 basis points to 19.5% for the three months ended September 30, 2024. The increase was driven by (i) an increase in revenue as a result of the factors above; (ii) a one-off credit of $18 million from a historic legal case; and (iii) operating cost savings from the closure of Fox Bet and lower marketing spend in Junglee.

Previous wording

Net profit margin is net profit divided by revenue.

Current wording

Net income (loss) margin is net income (loss) divided by revenue.

Previous wording

Adjusted EBITDA and Adjusted EBITDA Margin arenon-GAAP financial measures. See “—Supplemental Disclosure of Non-GAAP Measures” for additional information about these measures and reconciliations to the most directly comparable financial measures calculated in accordance with U.S. GAAP.

Current wording

Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. See “—Supplemental Disclosure of Non-GAAP Measures” for additional information about these measures and reconciliations to the most directly comparable financial measures calculated in accordance with U.S. GAAP.

Previous wording

Our revenue increased by 18%, to $7,008 million for the six months ended June 30, 2024, from $5,919 million for the six months ended June 30, 2023 and our AMPs grew 14% period on period to 14.0 million. The key drivers of Group revenue growth were (i) continued expansion of our US segment, with revenue 35% higher period on period (ii) strong UKI iGaming and sportsbook growth following a positive Euros and the benefit of positive sports results during the three months ended June 30, 2024 and (iii) a strong International performance particularly in Italy. The addition of MaxBet in International segment in the six months ended June 30, 2024 also added 1% to total Group revenue. The impact of sports results which is calculated as the difference between our expected net revenue margin for the period and our actual net revenue margin had an approximately 1% positive impact on total revenue growth for the six months ended June 30, 2024.

Current wording

Our revenue increased by 21%, to $10,256 million for the nine months ended September 30, 2024, from $8,477 million for the nine months ended September 30, 2023 and our AMPs grew 15% period on period to 13.7 million. The key drivers of Group revenue growth were (i) continued strong online revenue growth of our U.S. segment, with revenue 40% higher period on period, despite sports results which were less favorable in thenine months ended September 30, 2024 compared with the prior period, (ii) strong UKI iGaming and sportsbook growth driving increase in UKI revenue by 17% including the benefit of favorable sports results period on period and (iii) a strong International performance particularly in Italy and the addition of Maxbet which added 1% to total Group revenue in the nine months ended September 30, 2024. The impact of sports results which is calculated as the difference between our expected net revenue margin for the period and our actual net revenue margin had an approximately 2% positive impact on total revenue growth for the nine months ended September 30, 2024. This was partially offset by revenue decline of 2% in Australia due to the softer racing market in the period.

Previous wording

Cost of sales increased by 20%, to $3,628 million for the six months ended June 30, 2024, from $3,032 million for the six months ended June 30, 2023, in line with the increase in revenue. Cost of sales as a percentage of revenue remained consistent period on period at 52% for the six months ended June 30, 2024 compared with 51% for the six months ended June 30, 2023.

Current wording

Cost of sales increased by 22%, to $5,380 million for the nine months ended September 30, 2024, from $4,418 million for the nine months ended September 30, 2023, in line with the increase in revenue. Cost of sales as a percentage of revenue increased period on period at 52.5% for the nine months ended September 30, 2024 compared with 52.1% for the nine months ended September 30, 2023.

Previous wording

Technology, research and development expenses increased by 18%, to $406 million for the six months ended June 30, 2024, from $344 million for the six months ended June 30, 2023, primarily driven by continued investment in product development to enhance the customer proposition of our brands across the Group and increased labor costs as we are scaling our business in the US.

Current wording

Technology, research and development expenses increased by 11%, to $619 million for the nine months ended September 30, 2024, from $558 million for the nine months ended September 30, 2023, primarily driven by continued investment in product development to enhance the customer proposition of our brands across the Group and increased labor costs as we are scaling our business in the U.S..

Previous wording

Sales and marketing expenses increased by 5%, to $1,627 million for the six months ended June 30, 2024, from $1,549 million for the six months ended June 30, 2023. Sales and marketing expenses as a percentage of revenue was 23.2% for the six months ended June 30, 2024, a decrease of 300 basis points from 26.2% for the six months ended June 30, 2023. This decrease was driven by (i) significant economies of scales achieved in existing states with continued disciplined player acquisition investment in the United States partly offset by new state launches, (ii) increasingly targeted investment in the “Consolidate and Invest” markets, as well as the closure of FOX Bet in August 2023 and (iii) partly offset by increased investments in the Euros during the three months ended June 30, 2024.

Current wording

Sales and marketing expenses increased by 6%, to $2,375 million for the nine months ended September 30, 2024, from $2,250 million for the nine months ended September 30, 2023. Sales and marketing expenses as a percentage of revenue was 23.2% for the nine months ended September 30, 2024, a decrease of 330 basis points from 26.5% for the nine months ended September 30, 2023. This decrease was driven by (i) significant economies of scales achieved in existing states with continued disciplined player acquisition investment in the United States partly offset by new state launches and (ii) increasingly targeted investment in the “Consolidate and Invest” markets, as well as the closure of FOX Bet in August 2023.

Previous wording

General and administrative expenses increased by 9%, to $854 million for the six months ended June 30, 2024, from $787 million for the six months ended June 30, 2023. The increase was primarily as a result of (i) the continued expansion of our U.S. business and (ii) an increase in corporate overhead due to greater investment in Group resource. The increase also reflects the advisory fees related to activities associated with the change in the primary listing of the Group.

Current wording

General and administrative expenses increased by 9%, to $1,292 million for the nine months ended September 30, 2024, from $1,181 million for the nine months ended September 30, 2023. The increase was primarily as a result of (i) the continued expansion of our U.S. business; (ii) advisory fees related to activities associated with the change in the primary listing of the Group; and (iii) an increase in labor cost due to greater investment in the Group’s workforce.

Previous wording

Operating profit increased by $286 million from a profit of $207 million for the six months ended June 30, 2023, to a profit of $493 million for the six months ended June 30, 2024, as a result of the factors above.

Current wording

Operating profit increased by $520 million from a profit of $70 million for the nine months ended September 30, 2023, to a profit of $590 million for nine months ended September 30, 2024, as a result of the factors above.

Previous wording

Other expense increased by $50 million, to $85 million for the six months ended June 30, 2024, from $35 million for the six months ended June 30, 2023. This increase was primarily driven by a foreign exchange loss of $11 million for the six months ended June 30, 2024 as compared to a foreign exchange gain of $71 million for the six months ended June 30, 2023. This increase in other expense was partially offset by (i) the decrease in the fair value loss of $24 million on the Fox Option liability period on period and, (ii) an increase in the fair value gain on derivative instruments of $10 million period on period.

Current wording

Other expense, net increased by $128 million, to $207 million for the nine months ended September 30, 2024, from $79 million for the nine months ended September 30, 2023. This increase was primarily driven by (i) an increase in the fair value loss of $115 million on the Fox Option liability period on period; and (ii) a decrease in the fair value gain on derivative instruments of $35 million period on period partially offset by a foreign exchange gain of $30 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Previous wording

Income tax expense increased by $23 million, to $68 million for the six months ended June 30, 2024, from $45 million for the six months ended June 30, 2023. The movement is primarily due to the change in amount and jurisdictional mix of profits in which the Group has a taxable presence, as well as the tax impact of discrete adjustments.

Current wording

Income tax expense increased by $18 million, to $52 million for the nine months ended September 30, 2024, from $34 million for the nine months ended September 30, 2023. The movement is primarily due to the change in amount and jurisdictional mix of profits in which the Group has a taxable presence, as well as the tax impact of discrete adjustments.

Previous wording

Net income (loss) increased by $167 million, or 355%, to $120 million net profit for the six months ended June 30, 2024, from $47 million net loss for the six months ended June 30, 2023 and net profit margin increased to 1.7% from 0.8% net loss margin, as a result of the factors above.

Current wording

Net income (loss) increased by $315 million, or 102%, to $6 million net income for the nine months ended September 30, 2024, from $309 million net loss for the nine months ended September 30, 2023 and net income (loss) margin increased to 0.1% from 3.6% net loss margin for the nine months ended September 30, 2023, as a result of the factors above.

Previous wording

Adjusted EBITDA increased by 27%, to $1,252 million for the six months ended June 30, 2024, from $985 million for the six months ended June 30, 2023. Adjusted EBITDA Margin increasing by 130 basis points from 16.6% to 17.9% reflecting the revenue performance and expenses trend outlined above.

Current wording

Adjusted EBITDA increased by 37%, to $1,702 million for the nine months ended September 30, 2024, from $1,243 million for the nine months ended September 30, 2023. Adjusted EBITDA Margin increased by 190 basis points from 14.7% to 16.6% reflecting the revenue performance and expenses trend outlined above.